25% Pension Tax fee cash

gadger999

Apologies if this has been asked recently...what's the view on the October budget reducing this .I'm currently 60, retired..sitting on a 320k pot that I'd hoped not to touch until I'm 62....don't need the money ATM but would not want them to reduce the tax free amount...
Thanks in advance 

JoeCrystal

Please read other threads regarding this rather than posting another thread with the same topic.

Albermarle

gadger999 said:

Apologies if this has been asked recently...what's the view on the October budget reducing this .I'm currently 60, retired..sitting on a 320k pot that I'd hoped not to touch until I'm 62....don't need the money ATM but would not want them to reduce the tax free amount...
Thanks in advance 

The view is that we will know more after the budget.
Personally I think the chance of reducing the 25% figure  is about zero.
The current max you can take of ( over a quarter of Million) may get reduced, but not very likely.

Dazed_and_C0nfused

Albermarle said:

gadger999 said:

Apologies if this has been asked recently...what's the view on the October budget reducing this .I'm currently 60, retired..sitting on a 320k pot that I'd hoped not to touch until I'm 62....don't need the money ATM but would not want them to reduce the tax free amount...
Thanks in advance 

The view is that we will know more after the budget.
Personally I think the chance of reducing the 25% figure  is about zero.
The current max you can take of ( over a quarter of Million) may get reduced, but not very likely.

Agree with this, an easy political choice is to do nothing and inflation will then effectively reduce the maximum TFLS over time anyway.

Marcon

gadger999 said:

Apologies if this has been asked recently...what's the view on the October budget reducing this .I'm currently 60, retired..sitting on a 320k pot that I'd hoped not to touch until I'm 62....don't need the money ATM but would not want them to reduce the tax free amount...
Thanks in advance 

What does it matter what anyone here thinks? Nobody has inside information. 

MetaPhysical

They will leave the 268k threshold figure and let inflation work at it for decades like they have with inheritance tax threshold.  In ten years it'll be the equivalent of 150k and it will wither away and become increasingly irrelevant.  Politically that is much more palatable than killing a universally popular reason to save into a pension.  Even "working people" (what's Labour's definition of that by the way??) love the TFLS to pay off mortgage etc.

The other, nightmarish alternative is something completely left-field such as only allowing the full 25% TFLS if you are a basic rate tax payer or some other oddball policy like that with a taper of every 10k above it your TFC reduces by 1%.  They could do something along those lines.  Understood about the perverse effects on the workforce but when has that ever stopped them?

If the government truly cared about pensions and people they could have steadied the horses with a statement.  The fact that they haven't tells me something nasty is coming with pensions.

JoeCrystal

MetaPhysical said:

The fact that they haven't tells me something nasty is coming with pensions.

Not necessary. There will be mixtures of positive and negative changes. One potential positive change is to increase the employer contributions to 6% or even 12% to improve the retirement provisions of their employees. Or just 6% from the employee and 6% from the employer. Something will certainly change with tweaks to auto enrollment rules.

Will read Pension Schemes bill once they introduce it in the first reading.

Marcon

MetaPhysical said:

They will leave the 268k threshold figure and let inflation work at it for decades like they have with inheritance tax threshold.  In ten years it'll be the equivalent of 150k and it will wither away and become increasingly irrelevant.  Politically that is much more palatable than killing a universally popular reason to save into a pension.  Even "working people" (what's Labour's definition of that by the way??) love the TFLS to pay off mortgage etc.

The other, nightmarish alternative is something completely left-field such as only allowing the full 25% TFLS if you are a basic rate tax payer or some other oddball policy like that with a taper of every 10k above it your TFC reduces by 1%.  They could do something along those lines.  Understood about the perverse effects on the workforce but when has that ever stopped them?

If the government truly cared about pensions and people they could have steadied the horses with a statement.  The fact that they haven't tells me something nasty is coming with pensions.

They did. https://www.idealfinancialmanagement.co.uk/will-i-lose-my-tax-free-cash-if-labour-win-the-election/

ali_bear

In the budget I think you can expect some increase in capital gains tax and a change in some of the rules around inheritance tax, and various loopholes to be closed. They've already hit pensioners with the fuel allowance. 
But especially with pensions they can't just change things overnight - there has to be a period of consultation, time to allow the industry to update their systems and documentations. At least a year and a half before new pension rules come into effect. 

Grumpy_chap

MetaPhysical said:

The other, nightmarish alternative is something completely left-field such as only allowing the full 25% TFLS if you are a basic rate tax payer or some other oddball policy like that with a taper of every 10k above it your TFC reduces by 1%.  

I think there would be many ways that higher rate tax payers would massage themselves to be lower rate tax payers for the year before drawing pension if this was a thing.

ader42

I suspect a great number of options are open, not least being the announcement that Salary Sacrifice will end - but that would have to be timed for a year-end.

In terms of 25% I can quite easily see them reducing the maximum amount but again I suspect that would be from a year-start but is imho unlikely. 

As for Starmers “slip” - I can’t imagine what it was he was thinking would run out when he said: “Well, it runs out in a number of years and we are not going to renew it.”