Labour's LTA plans?

Pat38493

hyubh said:

leosayer said:

Somebody said:

Cus said:

I never understood why they couldn't adjust the doctors dB pension so that they didn't accidentally put too much into it and have to pay an annual allowance tax charge

It's to do with their annual Pension Input Amounts.  See https://www.telegraph.co.uk/money/pensions/news/doctors-forced-retirement-receiving-9000-pension-tax-bills/

In other words, as I understand it, nothing to with LTA.

Tell that to the BMA! They celebrated increased AA allowance and the abolition of the LTA as one great victory (https://www.bma.org.uk/bma-media-centre/chancellor-listens-to-bma-with-pension-taxation-reform-to-help-keep-senior-doctors-in-the-nhs).

I asked a few questions about this ages ago as I was also confused - after looking into it a bit I came to the same conclusion as Leo sayer - the bigger issue for doctors was the annual allowance check on the input amounts and the thing to celebrate there is the increase from 40K to 60K.  The LTA part is an issue in that it could be seen as a discouragement to carry on working, but it’s not one that could result in them facing a large unexpected tax bill that is payable immediately whilst they are still working.

Ganga

Silvertabby said:

Just read that Kier Starmer still intends to spend (borrow?) 28 Billion per year on green agendas.  That money will have to come from somewhere.....

Well the country is going to be completely bankrupt if he pays the WASPI woman as well.

michaels

Silvertabby said:

Just read that Kier Starmer still intends to spend (borrow?) 28 Billion per year on green agendas.  That money will have to come from somewhere.....

I guess as this is a pensions thread we don't need to be concerned whether future generations will have a planet that supports human life - although with a bleak future they may decide it is not worth working to produce all the things we are hoping our retirement funds will pay for?

Silvertabby

Ganga said:

Silvertabby said:

Just read that Kier Starmer still intends to spend (borrow?) 28 Billion per year on green agendas.  That money will have to come from somewhere.....

Well the country is going to be completely bankrupt if he pays the WASPI woman as well.

Remember when Corbyn promised to pay the WASPI women shedloads of compo 'when' he became PM, and the WASPI hierarchy reckoned that if every 1950s woman plus their families voted Labour then they would be a shoe-in?  

Clearly, the majority of voters had other priorities.  Suspect that the pensions LTA question incurs a similar amount of interest in the overall picture.

DoublePolaroid

Pat38493 said:

hyubh said:

leosayer said:

Somebody said:

Cus said:

I never understood why they couldn't adjust the doctors dB pension so that they didn't accidentally put too much into it and have to pay an annual allowance tax charge

It's to do with their annual Pension Input Amounts.  See https://www.telegraph.co.uk/money/pensions/news/doctors-forced-retirement-receiving-9000-pension-tax-bills/

In other words, as I understand it, nothing to with LTA.

Tell that to the BMA! They celebrated increased AA allowance and the abolition of the LTA as one great victory (https://www.bma.org.uk/bma-media-centre/chancellor-listens-to-bma-with-pension-taxation-reform-to-help-keep-senior-doctors-in-the-nhs).

I asked a few questions about this ages ago as I was also confused - after looking into it a bit I came to the same conclusion as Leo sayer - the bigger issue for doctors was the annual allowance check on the input amounts and the thing to celebrate there is the increase from 40K to 60K.  The LTA part is an issue in that it could be seen as a discouragement to carry on working, but it’s not one that could result in them facing a large unexpected tax bill that is payable immediately whilst they are still working.

One of my colleagues gave crossing the LTA threshold (when it was frozen at £1.5m!) as one of the primary reasons for him retiring from general practice. 

His reasoning didn’t really make much sense to me and it was a pretty sweet problem to have, as problems go. He might have been exaggerating its impact on his decision, for unknown reasons. But people frequently don’t act rationally and I would certainly say that anecdotally, for whatever that is worth, the LTA did have an impact on retention of some older doctors. How big of an issue this was, I can’t quantify. 

AA was definitely the bigger issue for me personally (also a good problem to have) and it did almost lead to me reducing my hours despite my being a relative whippersnapper nowhere near retirement. 

hugheskevi

DoublePolaroid said:

Pat38493 said:

hyubh said:

leosayer said:

Somebody said:

Cus said:

I never understood why they couldn't adjust the doctors dB pension so that they didn't accidentally put too much into it and have to pay an annual allowance tax charge

It's to do with their annual Pension Input Amounts.  See https://www.telegraph.co.uk/money/pensions/news/doctors-forced-retirement-receiving-9000-pension-tax-bills/

In other words, as I understand it, nothing to with LTA.

Tell that to the BMA! They celebrated increased AA allowance and the abolition of the LTA as one great victory (https://www.bma.org.uk/bma-media-centre/chancellor-listens-to-bma-with-pension-taxation-reform-to-help-keep-senior-doctors-in-the-nhs).

I asked a few questions about this ages ago as I was also confused - after looking into it a bit I came to the same conclusion as Leo sayer - the bigger issue for doctors was the annual allowance check on the input amounts and the thing to celebrate there is the increase from 40K to 60K.  The LTA part is an issue in that it could be seen as a discouragement to carry on working, but it’s not one that could result in them facing a large unexpected tax bill that is payable immediately whilst they are still working.

One of my colleagues gave crossing the LTA threshold (when it was frozen at £1.5m!) as one of the primary reasons for him retiring from general practice. 

His reasoning didn’t really make much sense to me and it was a pretty sweet problem to have, as problems go. He might have been exaggerating its impact on his decision, for unknown reasons. But people frequently don’t act rationally and I would certainly say that anecdotally, for whatever that is worth, the LTA did have an impact on retention of some older doctors. How big of an issue this was, I can’t quantify. 

AA was definitely the bigger issue for me personally (also a good problem to have) and it did almost lead to me reducing my hours despite my being a relative whippersnapper nowhere near retirement. 

In the people I have dealt with around LTA issues, I find there are two paths leading to earlier retirement than would otherwise have been the case.

The first is that breaching the LTA and having a tax charge triggers people to consider retirement when they would otherwise have just carried on without any thought. It isn't the financial implications as such, rather, it has the effect of a call to action.

Second, people may be alerted by their pension scheme they have breached or are approaching the LTA. This prompts them to either review their finances and/or get paid-for financial advice. This then shows them the impact of things like the withdrawal of Personal Allowance, maybe Annual Allowance risks (especially tapered Annual Allowance), additional rate income tax, maybe even things like not having accessed a public service pension at normal pension age which they are now forfeiting through not having claimed and so on. This leads them to conclude it just isn't worth working and paying all this tax. 

Even those relatively young, eg, early 50s may reach LTA and in considering their wider financial affairs become aware of things like abatement in the public sector. They realise they have a huge incentive to move to part-time working when they reach Normal Pension age, but in many of the high-earning jobs this isn't often viable. Hence they have a big incentive to move sectors before they reach Normal Pension age. So even if they don't retire, they start looking at alternative options elsewhere in the years leading up to Normal Pension age.

RogerPensionGuy

I read that Labour were planning to essentially have their next election manifesto basic plans know(in-house) by today the the 8th Feb.

Apparently Labour are about to announce a U Turn on their green plans today.

So I'm expecting Labour to leak out various manifesto bits & bobs these next 4 weeks before the budget on the 6th of March and then probably leak out more and more whilst awaiting for the election to be called. 

Below is a link of some I interest possibly. 
☆☆☆

https://rtsfinancialplanning.co.uk/what-a-labour-government-might-mean-for-your-retirement-savings/

MetaPhysical

I think many professionals and high earners - myself amongst them -  especially those hovering around the £100-150k mark conclude that it isn't worth working so many hours, if at all, and paying so much tax what with withdrawal of PA, 45% tax, childcare withdrawal, etc.  I have dropped from full time to 4 days per week because the "value" of that fifth day is not 20%, with the tax it is more like 5% and it is not worth my time, I'd rather do something else with that day like ride my bike or do some charity work.  At least the LTA has been abolished (hopefully permanently).
Without getting into politics unduly, the Conservative party, the supposed "party of low taxation", has presided over this mess.

Silvertabby

MetaPhysical said:

I think many professionals and high earners - myself amongst them -  especially those hovering around the £100-150k mark conclude that it isn't worth working so many hours, if at all, and paying so much tax what with withdrawal of PA, 45% tax, childcare withdrawal, etc.  I have dropped from full time to 4 days per week because the "value" of that fifth day is not 20%, with the tax it is more like 5% and it is not worth my time, I'd rather do something else with that day like ride my bike or do some charity work.  At least the LTA has been abolished (hopefully permanently).
Without getting into politics unduly, the Conservative party, the supposed "party of low taxation", has presided over this mess.

To be fair, remember when the Tories took over? - they found a note from the outgoing treasury minister saying "sorry - there's no money left".

And we (the tax payers) will be paying the financial cost of Covid for many years to come.

RogerPensionGuy

MetaPhysical said:

I think many professionals and high earners - myself amongst them -  especially those hovering around the £100-150k mark conclude that it isn't worth working so many hours, if at all, and paying so much tax what with withdrawal of PA, 45% tax, childcare withdrawal, etc.  I have dropped from full time to 4 days per week because the "value" of that fifth day is not 20%, with the tax it is more like 5% and it is not worth my time, I'd rather do something else with that day like ride my bike or do some charity work.  At least the LTA has been abolished (hopefully permanently).
Without getting into politics unduly, the Conservative party, the supposed "party of low taxation", has presided over this mess.

As mentioned here, Labour dream up pension changes, then at least tweaked up the LTA is a sensible fashion, then the Conservatives decided to pull it down and making up various LTA problematic protections that stopped people putting in to pensions, reduce hours worked or leave employment, then decided to abolish LTA. 

Labour are saying they will bring it back.

They call it unintended consequences, but it's actually poor consultations, planning and decisions.
☆☆☆

https://adviser.royallondon.com/technical-central/rates-and-factors/standard-lifetime-allowance/