Just for interest...(none political)....ifMeans testing SP, what minimum income level would you set?

michaels

Stubod said:

RogerPensionGuy said:

This thread if a fair thread indeed......

..yep, and 3 pages in and nobody has actually answered the question  I actually asked...  ..... but that's fine, it was only for a bit of fun / debate...... 

I have already said that it should not happen as it is (has been sold as) effectively a saving scheme where NI payments go towards producing an entitlement.  Perhaps going forward 'pension' NI could be removed and no further entitlement earned but surely already paid for pension should not be confiscated?

If you insist on a level, how about at the level that you lose the personal allowance - ie North of 100k as that seems to already be an income level where a 60% effective tax rate is deemed acceptable.

Grumpy_chap

Stubod said:

..yep, and 3 pages in and nobody has actually answered the question  I actually asked...  ..... 

I did, right back on page 1:

Grumpy_chap said:

If I were to set a means test for the SP, I'd set it really high, like annual income from other sources of £100 Bn or over.  Even then there will be tabloid uproar, the party in power will lose the next election and the new lot will reinstate the universal SP.  

RogerPensionGuy said:

Roughly pensioners on say a full state pension of lets say 12K PA are getting that cold weather payment of say £300 removed. 

So down the road it will become a blended removal or loss. 

Examples. 

Zero personal pension people get full state pension payment. 

3K PA of personal pension, 3K will get chopped off their state pension payments. 

7K PA of personal pension and 7K off state pension. 

Personal pension at state pension or over state pension will get zero state pension. 

***

If there was means-testing in that way, so £1 personal / private / employment pension resulted in £1 less state pension, the result would be an instant cessation of all pension contributions where it can be ceased.

theoretica

michaels said:

theoretica said:

Currently, income from employment is subject to NI, but other types of income are not.  Making all income, including pensions, subject to the 'employee' NI (which could go, for instance, to the NHS) would claw back some money from pensioners with higher incomes, without needing to means test the state pension. 

I paid NI on the money on my pension when I earned it. Make me pay it a second time and with basic rate tax relief only applied I would be worse off saving in a pension that simply taking the income and saving it.  NI twice on the same income? How can that make sense?

Isn't making pension savings through salary sacrifice (so no NI) fairly common?  It would presumably need an expansion of that scheme to cover people who currently do not have it available.

MK62

theoretica said:

michaels said:

theoretica said:

Currently, income from employment is subject to NI, but other types of income are not.  Making all income, including pensions, subject to the 'employee' NI (which could go, for instance, to the NHS) would claw back some money from pensioners with higher incomes, without needing to means test the state pension. 

I paid NI on the money on my pension when I earned it. Make me pay it a second time and with basic rate tax relief only applied I would be worse off saving in a pension that simply taking the income and saving it.  NI twice on the same income? How can that make sense?

Isn't making pension savings through salary sacrifice (so no NI) fairly common?  It would presumably need an expansion of that scheme to cover people who currently do not have it available.

The topic being discussed there though was putting NI on pension income........

michaels

theoretica said:

michaels said:

theoretica said:

Currently, income from employment is subject to NI, but other types of income are not.  Making all income, including pensions, subject to the 'employee' NI (which could go, for instance, to the NHS) would claw back some money from pensioners with higher incomes, without needing to means test the state pension. 

I paid NI on the money on my pension when I earned it. Make me pay it a second time and with basic rate tax relief only applied I would be worse off saving in a pension that simply taking the income and saving it.  NI twice on the same income? How can that make sense?

Isn't making pension savings through salary sacrifice (so no NI) fairly common?  It would presumably need an expansion of that scheme to cover people who currently do not have it available.

But no doubt a large proportion of pension savings already saved have come from NI paid income with only basic rate tax relief - so the double NI would impact those probably poorest savers the most and they would be the ones who had lost out by saving in a pension rather than just taking the income in the first place.

Grumpy_chap

MK62 said:

The topic being discussed there though was putting NI on pension income........

NI is a somewhat odd tax in that the individual element is only paid on earned income, so pension income, savings, investment, dividend, BTL, holiday let etc all avoids the burden.  
Then the employer part is the real "jobs tax"

The previous Government were just starting on a path to reduce the employee element of NI.  The implication of that is Income Tax is higher than it would be if the NI were maintained (all other things being equal).  That path results in the value of NI being charged on unearned income as well as earned income but never needs an actual announcement that is being done.
It might not be surprising if a future Government sees the attraction of a similar path.

westv

RogerPensionGuy said:

Stubod said:

RogerPensionGuy said:

This thread if a fair thread indeed......

..yep, and 3 pages in and nobody has actually answered the question  I actually asked...  ..... but that's fine, it was only for a bit of fun / debate...... 

Roughly pensioners on say a full state pension of lets say 12K PA are getting that cold weather payment of say £300 removed. 

So down the road it will become a blended removal or loss. 

Examples. 

Zero personal pension people get full state pension payment. 

3K PA of personal pension, 3K will get chopped off their state pension payments. 

7K PA of personal pension and 7K off state pension. 

Personal pension at state pension or over state pension will get zero state pension. 

***

. 

How will those figures be calculated on a DC pot? Compared to an annuity? Single or joint life? Or perhaps the SWR between 2% and 3%? Another figure? 

Flugelhorn

Stubod said:

RogerPensionGuy said:

This thread if a fair thread indeed......

..yep, and 3 pages in and nobody has actually answered the question  I actually asked...  ..... but that's fine, it was only for a bit of fun / debate...... 

the answer is the the threshold should be.......:

"just a few pounds more than I get in my private pension, so I still get the SP"

SouthCoastBoy

westv said:

RogerPensionGuy said:

Stubod said:

RogerPensionGuy said:

This thread if a fair thread indeed......

..yep, and 3 pages in and nobody has actually answered the question  I actually asked...  ..... but that's fine, it was only for a bit of fun / debate...... 

Roughly pensioners on say a full state pension of lets say 12K PA are getting that cold weather payment of say £300 removed. 

So down the road it will become a blended removal or loss. 

Examples. 

Zero personal pension people get full state pension payment. 

3K PA of personal pension, 3K will get chopped off their state pension payments. 

7K PA of personal pension and 7K off state pension. 

Personal pension at state pension or over state pension will get zero state pension. 

***

. 

How will those figures be calculated on a DC pot? Compared to an annuity? Single or joint life? Or perhaps the SWR between 2% and 3%? Another figure? 

Yes, a minefield, and annuity rates are always changing. I assume they do have an algorithm that is used when assessing care home fees liability 

westv

SouthCoastBoy said:

westv said:

RogerPensionGuy said:

Stubod said:

RogerPensionGuy said:

This thread if a fair thread indeed......

..yep, and 3 pages in and nobody has actually answered the question  I actually asked...  ..... but that's fine, it was only for a bit of fun / debate...... 

Roughly pensioners on say a full state pension of lets say 12K PA are getting that cold weather payment of say £300 removed. 

So down the road it will become a blended removal or loss. 

Examples. 

Zero personal pension people get full state pension payment. 

3K PA of personal pension, 3K will get chopped off their state pension payments. 

7K PA of personal pension and 7K off state pension. 

Personal pension at state pension or over state pension will get zero state pension. 

***

. 

How will those figures be calculated on a DC pot? Compared to an annuity? Single or joint life? Or perhaps the SWR between 2% and 3%? Another figure? 

Yes, a minefield, and annuity rates are always changing. I assume they do have an algorithm that is used when assessing care home fees liability 

Aren't fees based on savings not income?