Autumn statement reactions with reference to pension & retirement planning, views & comments?

Hoenir

zagfles said:

Dazed_and_C0nfused said:

whattochoose said:

I'm disappointed they haven't increased the amount of interest you can earn before becoming liable to tax.

With the current annual ISA limit and two 0% tax bands on top of the Personal Allowance I don't think we are particularly hard done by in that respect!

While interest rates are below inflation, any sort of tax on interest is effectively a wealth tax. Your assets aren't increasing in value but you're getting taxed on them. In previous years most people weren't taxed because of the allowances but now a lot of people are because the nominal interest they earn is a lot higher, but still doesn't even cover the loss of capital value due to inflation.

Personal inflation rate is very different to the published inflation rate though. In cash terms returns are far better than they have been for a very long time. 

RogerPensionGuy

artyboy said:

Given there was a recent resurgence of the rumour that IHT was to be cut/abolished, the fact that Hunt didn't say a dicky bird about it yesterday means that I don't feel any need to rebalance contributions from pensions to other investments...

In other words, this budget changes nothing for me pension-wise. 

My view is because nothing was said about IHT yesterday, even that very strange difference between 325 and 500K PA hasn't been fixed or mitigated, indeed it remains an issue causing a great reluctance for older people to sell, downsize or rent or various other planning available, lots of wasted accommodation possibilities and big spend on energy on oversized accommodations.

In my view, the current fact that IHT issues we're addressed, I will be more temped to keeping my DC pension as reserve of last choice because of it's potential IHT possibilities. 

coastline

RogerPensionGuy said:

artyboy said:

Given there was a recent resurgence of the rumour that IHT was to be cut/abolished, the fact that Hunt didn't say a dicky bird about it yesterday means that I don't feel any need to rebalance contributions from pensions to other investments...

In other words, this budget changes nothing for me pension-wise. 

My view is because nothing was said about IHT yesterday, even that very strange difference between 325 and 500K PA hasn't been fixed or mitigated, indeed it remains an issue causing a great reluctance for older people to sell, downsize or rent or various other planning available, lots of wasted accommodation possibilities and big spend on energy on oversized accommodations.

In my view, the current fact that IHT issues we're addressed, I will be more temped to keeping my DC pension as reserve of last choice because of it's potential IHT possibilities. 

Yeah it's unfair the 325K and 500K part as single people still have other family members involved in their will. Property even outside of the SE of UK has soared since last allowance . The basic allowance was updated in 2007 so 16 years ago. The adjustment to 500K per person would have cost less than £2bn a year.

The History of Inheritance Tax - Final Duties

Still time for some change in the spring budget so we'll see. My guess the debate got too far ahead and media were asking why increase the allowance in a cost of living crisis.? Maybe plans or suggestions were leaked and a last minute change took place. ? NI down by 2% points may have been it's replacement.? Votes are important at this stage.

Hoenir

coastline said:

 NI down by 2% points may have been it's replacement.? Votes are important at this stage.

Changes to IHT are going to make zero impact to the broader economy though. Much of the NI reduction will ultimately be recirculated back as tax revenue to the Treasury. 

zagfles

LHW99 said:

zagfles said:

Dazed_and_C0nfused said:

whattochoose said:

I'm disappointed they haven't increased the amount of interest you can earn before becoming liable to tax.

With the current annual ISA limit and two 0% tax bands on top of the Personal Allowance I don't think we are particularly hard done by in that respect!

While interest rates are below inflation, any sort of tax on interest is effectively a wealth tax. Your assets aren't increasing in value but you're getting taxed on them. In previous years most people weren't taxed because of the allowances but now a lot of people are because the nominal interest they earn is a lot higher, but still doesn't even cover the loss of capital value due to inflation.

Although it is also the fact that in recent years interest rates have been so low that you would have needed to be reasonably well off in savings to earn enough in interest to reach the tax limits.

That's basically what I said. But now interest rates and inflation are both high so people with relatively modest savings are being "wealth taxed"

zagfles

Hoenir said:

zagfles said:

Dazed_and_C0nfused said:

whattochoose said:

I'm disappointed they haven't increased the amount of interest you can earn before becoming liable to tax.

With the current annual ISA limit and two 0% tax bands on top of the Personal Allowance I don't think we are particularly hard done by in that respect!

While interest rates are below inflation, any sort of tax on interest is effectively a wealth tax. Your assets aren't increasing in value but you're getting taxed on them. In previous years most people weren't taxed because of the allowances but now a lot of people are because the nominal interest they earn is a lot higher, but still doesn't even cover the loss of capital value due to inflation.

Personal inflation rate is very different to the published inflation rate though. In cash terms returns are far better than they have been for a very long time. 

Things that have gone up in price affect virtually everyone, food, fuel, council tax etc. There will be differences but everyone will have been hit by high inflation.

Cash terms is pointless. Better off with zero inflation and spending capital if necessary than 6% interest and 8% inflation. 

Though the tide may be turning now as real interest rates look to be going positive for the first time in about 15 years.

Hoenir

zagfles said:

Hoenir said:

zagfles said:

Dazed_and_C0nfused said:

whattochoose said:

I'm disappointed they haven't increased the amount of interest you can earn before becoming liable to tax.

With the current annual ISA limit and two 0% tax bands on top of the Personal Allowance I don't think we are particularly hard done by in that respect!

While interest rates are below inflation, any sort of tax on interest is effectively a wealth tax. Your assets aren't increasing in value but you're getting taxed on them. In previous years most people weren't taxed because of the allowances but now a lot of people are because the nominal interest they earn is a lot higher, but still doesn't even cover the loss of capital value due to inflation.

Personal inflation rate is very different to the published inflation rate though. In cash terms returns are far better than they have been for a very long time. 

Things that have gone up in price affect virtually everyone, food, fuel, council tax etc. There will be differences but everyone will have been hit by high inflation.

Inflation covers a wide basket of items.  Many of which are discretionary spending. People generally have a choice as to how to spend their money. Even with tax to pay it's better to save for something than borrow and fund the item on finance. 

zagfles

Hoenir said:

zagfles said:

Hoenir said:

zagfles said:

Dazed_and_C0nfused said:

whattochoose said:

I'm disappointed they haven't increased the amount of interest you can earn before becoming liable to tax.

With the current annual ISA limit and two 0% tax bands on top of the Personal Allowance I don't think we are particularly hard done by in that respect!

While interest rates are below inflation, any sort of tax on interest is effectively a wealth tax. Your assets aren't increasing in value but you're getting taxed on them. In previous years most people weren't taxed because of the allowances but now a lot of people are because the nominal interest they earn is a lot higher, but still doesn't even cover the loss of capital value due to inflation.

Personal inflation rate is very different to the published inflation rate though. In cash terms returns are far better than they have been for a very long time. 

Things that have gone up in price affect virtually everyone, food, fuel, council tax etc. There will be differences but everyone will have been hit by high inflation.

Inflation covers a wide basket of items.  Many of which are discretionary spending. People generally have a choice as to how to spend their money. Even with tax to pay it's better to save for something than borrow and fund the item on finance. 

Non sequitur. Obviously all that is correct. But if you choose to spend less on "discretionary spending" because prices have gone up then that's the same as choosing to spend less because you have less interest coming in.

Qyburn

coastline said:

The basic allowance was updated in in 2007 so 16 years ago. .

The main residence allowance was added in 2016 at £100k, then increased a few years later to £175k. Since house prices seem to be the main reason people are calling for higher allowances, it's not correct to say it hasn't increased since 2007.

Yorkie1

Qyburn said:

coastline said:

The basic allowance was updated in in 2007 so 16 years ago. .

The main residence allowance was added in 2016 at £100k, then increased a few years later to £175k. Since house prices seem to be the main reason people are calling for higher allowances, it's not correct to say it hasn't increased since 2007.

Nothing has changed for single people without children. It's all about "hard working families".