Should I change my pension contributions ahead of the Autumn Budget?

JoeCrystal

vacheron said:

dllive said:

Hi all,

I know noone has a crystal ball, but curious to hear what others are doing ahead of the Autumn Budget regards pension contributions.

All my SIPP contributions are in passive world index trackers (Vanguard), and Im a HR tax payer. Used up my ISA allowance.

I presume the goverment will do a little fiddling with pensions, but Im not sure obviously.

Ive decided to hedge my bets, and quickly shuffle a load of contributions in before October 30th; and retain the rest of my conrtibutions for after the Autumn budget.

Im just kinda curious to hear what others are doing. 

Thanks

I would imagine any fiddling would be related to contributions on the way in, or taxation on the way out. I'm not doing anything different with my contributions or the funds within my SIPPs. There are far larger elephants in the room which I need to focus on instead. 

Dazed_and_C0nfused said:

It's not technically a pension change but, for some people, the NI benefit of sacrificing salary into a pension was definitely reduced mid year under the last government.

Whch ironically (in pension terms at least) hit the "hard working people" the most as those better off (who were sacrificing exclusively from their higher rate income) were not affected by this "pension reduction" and actually profited from a higher basic rate take home pay. They also and saw no reduction to their 2% NI saving into their pensions as this limit was not reduced.

If the latest mutterings about Labor abolishing Employer Salsac NI savings were true, this would also adversely affect millions of people earning the lowest wages who are trying to provide for their future.

Which millions are these? I mean just how common the salary sacrifice is actually done? Every employers I worked for never bothered to do it for example (too much hassles apparently!). Especially when 3/5 of the employees work for SMEs. Mind you, I always thought it is odd that there is 2% NI contribution for higher earners!

vacheron

JoeCrystal said:

vacheron said:

dllive said:

Hi all,

I know noone has a crystal ball, but curious to hear what others are doing ahead of the Autumn Budget regards pension contributions.

All my SIPP contributions are in passive world index trackers (Vanguard), and Im a HR tax payer. Used up my ISA allowance.

I presume the goverment will do a little fiddling with pensions, but Im not sure obviously.

Ive decided to hedge my bets, and quickly shuffle a load of contributions in before October 30th; and retain the rest of my conrtibutions for after the Autumn budget.

Im just kinda curious to hear what others are doing. 

Thanks

I would imagine any fiddling would be related to contributions on the way in, or taxation on the way out. I'm not doing anything different with my contributions or the funds within my SIPPs. There are far larger elephants in the room which I need to focus on instead. 

Dazed_and_C0nfused said:

It's not technically a pension change but, for some people, the NI benefit of sacrificing salary into a pension was definitely reduced mid year under the last government.

Whch ironically (in pension terms at least) hit the "hard working people" the most as those better off (who were sacrificing exclusively from their higher rate income) were not affected by this "pension reduction" and actually profited from a higher basic rate take home pay. They also and saw no reduction to their 2% NI saving into their pensions as this limit was not reduced.

If the latest mutterings about Labor abolishing Employer Salsac NI savings were true, this would also adversely affect millions of people earning the lowest wages who are trying to provide for their future.

Which millions are these? I mean just how common the salary sacrifice is actually done? Every employers I worked for never bothered to do it for example (too much hassles apparently!). Especially when 3/5 of the employees work for SMEs. Mind you, I always thought it is odd that there is 2% NI contribution for higher earners!

I have heard many commentators mention that "the majority" of private company pensions are now salsac, so made the assumption that a couple of million could easily be feasible. It is also being reported that salsac is costing the treasury £50 billion anually in lost NI revenue, so it can hardly be insignificant.

One source quoting 70%, but i have seen everything from 70% to 5% (of SME's):
 https://www.nfp.co.uk/media/insights/is-your-organisation-making-the-most-of-salary-sacrifice/

Salary sacrifice has grown in popularity to become mainstream, with 70% of UK pension schemes using it as the default method of making contributions (Aon Benefits & Trends Survey) . So what is preventing the remaining 30% of organisations from implementing this efficiency? Is it a lack of understanding, the workforce demographic, or do some organisations simply not have sufficient resource to manage the switch?

JoeCrystal

vacheron said:

JoeCrystal said:

vacheron said:

dllive said:

Hi all,

I know noone has a crystal ball, but curious to hear what others are doing ahead of the Autumn Budget regards pension contributions.

All my SIPP contributions are in passive world index trackers (Vanguard), and Im a HR tax payer. Used up my ISA allowance.

I presume the goverment will do a little fiddling with pensions, but Im not sure obviously.

Ive decided to hedge my bets, and quickly shuffle a load of contributions in before October 30th; and retain the rest of my conrtibutions for after the Autumn budget.

Im just kinda curious to hear what others are doing. 

Thanks

I would imagine any fiddling would be related to contributions on the way in, or taxation on the way out. I'm not doing anything different with my contributions or the funds within my SIPPs. There are far larger elephants in the room which I need to focus on instead. 

Dazed_and_C0nfused said:

It's not technically a pension change but, for some people, the NI benefit of sacrificing salary into a pension was definitely reduced mid year under the last government.

Whch ironically (in pension terms at least) hit the "hard working people" the most as those better off (who were sacrificing exclusively from their higher rate income) were not affected by this "pension reduction" and actually profited from a higher basic rate take home pay. They also and saw no reduction to their 2% NI saving into their pensions as this limit was not reduced.

If the latest mutterings about Labor abolishing Employer Salsac NI savings were true, this would also adversely affect millions of people earning the lowest wages who are trying to provide for their future.

Which millions are these? I mean just how common the salary sacrifice is actually done? Every employers I worked for never bothered to do it for example (too much hassles apparently!). Especially when 3/5 of the employees work for SMEs. Mind you, I always thought it is odd that there is 2% NI contribution for higher earners!

I have heard many commentators mention that "the majority" of private company pensions are now salsac, so made the assumption that a couple of million could easily be feasible. 

One source:
 https://www.nfp.co.uk/media/insights/is-your-organisation-making-the-most-of-salary-sacrifice/

Salary sacrifice has grown in popularity to become mainstream, with 70% of UK pension schemes using it as the default method of making contributions (Aon Benefits & Trends Survey) . So what is preventing the remaining 30% of organisations from implementing this efficiency? Is it a lack of understanding, the workforce demographic, or do some organisations simply not have sufficient resource to manage the switch?

Ah that is interesting! 😀 Or in case of.my current employer, the board think the pension schemes are like the 90s. Totally untrustworthy and pointless! Indeed, they only did auto enrollment as legally required, even so contributions are almost 90 days or just missed (about seven months behind!). 😠 I actually remember getting an email that using qualifying earnings are a GOOD thing since the low paid employees won't need to contribute much. *Roll eyes*

In other words, some companies like my employer despised pension schemes and still would not consider salary sacrifice even though it will save them tons of money!

vacheron

JoeCrystal said:

vacheron said:

JoeCrystal said:

vacheron said:

dllive said:

Hi all,

I know noone has a crystal ball, but curious to hear what others are doing ahead of the Autumn Budget regards pension contributions.

All my SIPP contributions are in passive world index trackers (Vanguard), and Im a HR tax payer. Used up my ISA allowance.

I presume the goverment will do a little fiddling with pensions, but Im not sure obviously.

Ive decided to hedge my bets, and quickly shuffle a load of contributions in before October 30th; and retain the rest of my conrtibutions for after the Autumn budget.

Im just kinda curious to hear what others are doing. 

Thanks

I would imagine any fiddling would be related to contributions on the way in, or taxation on the way out. I'm not doing anything different with my contributions or the funds within my SIPPs. There are far larger elephants in the room which I need to focus on instead. 

Dazed_and_C0nfused said:

It's not technically a pension change but, for some people, the NI benefit of sacrificing salary into a pension was definitely reduced mid year under the last government.

Whch ironically (in pension terms at least) hit the "hard working people" the most as those better off (who were sacrificing exclusively from their higher rate income) were not affected by this "pension reduction" and actually profited from a higher basic rate take home pay. They also and saw no reduction to their 2% NI saving into their pensions as this limit was not reduced.

If the latest mutterings about Labor abolishing Employer Salsac NI savings were true, this would also adversely affect millions of people earning the lowest wages who are trying to provide for their future.

Which millions are these? I mean just how common the salary sacrifice is actually done? Every employers I worked for never bothered to do it for example (too much hassles apparently!). Especially when 3/5 of the employees work for SMEs. Mind you, I always thought it is odd that there is 2% NI contribution for higher earners!

I have heard many commentators mention that "the majority" of private company pensions are now salsac, so made the assumption that a couple of million could easily be feasible. 

One source:
 https://www.nfp.co.uk/media/insights/is-your-organisation-making-the-most-of-salary-sacrifice/

Salary sacrifice has grown in popularity to become mainstream, with 70% of UK pension schemes using it as the default method of making contributions (Aon Benefits & Trends Survey) . So what is preventing the remaining 30% of organisations from implementing this efficiency? Is it a lack of understanding, the workforce demographic, or do some organisations simply not have sufficient resource to manage the switch?

Ah that is interesting! 😀 Or in case of.my current employer, the board think the pension schemes are like the 90s. Totally untrustworthy and pointless! Indeed, they only did auto enrollment as legally required, even so contributions are almost 90 days or just missed (about seven months behind!). 😠 I actually remember getting an email that using qualifying earnings are a GOOD thing since the low paid employees won't need to contribute much. *Roll eyes*

In other words, some companies like my employer despised pension schemes and still would not consider salary sacrifice even though it will save them tons of money!

I can totally see why it appears that salsac schemes are in the minority. When our previous company closed and our team were scattered far and wide to different employers, the vast majority of the new employers didn't operate salsac and the first thing many of my ex employees did (the pension savvy ones at least) was to start lobbying for them to introduce it. 

Much like your experiences many of them thought it was a tax dodge or an illegal scam (even after being shown the .GOV website on how to offer it!), or else, as in your experience it seems, they simply weren't interested in the slightest.

In my case I was TUPE'd to a new employer who were obliged to offer it as part of my contract and working conditions, but they only did so for the employees who transferred, not for the company as a whole which is bizarre because it actually saves both the employee AND employer money! 🤷‍♂️  

Sarahspangles

vacheron said:

One source quoting 70%, but i have seen everything from 70% to 5% (of SME's):
 https://www.nfp.co.uk/media/insights/is-your-organisation-making-the-most-of-salary-sacrifice/

Salary sacrifice has grown in popularity to become mainstream, with 70% of UK pension schemes using it as the default method of making contributions (Aon Benefits & Trends Survey) . So what is preventing the remaining 30% of organisations from implementing this efficiency? Is it a lack of understanding, the workforce demographic, or do some organisations simply not have sufficient resource to manage the switch?

AON operate a lot of employer DB schemes so they may have been surveying their own clients rather than all employers.

FIREDreamer

MallyGirl said:

The saving was less in pay packet terms though

What went into the pension was unchanged. Take home pay went up. Nothing to complain about there, surely.

MiserlyMartin

If Reeves really does bring in a flat rate of tax relief, as reported, 30% relief -  then that is good for lower rate payers and bad for higher rate payers. But rumours now have it that they have shelved much of the pension changes. It could be better for lower rate tax payers to wait to see if she really does do this and when it applies if making contributions to your pension

pterri

This comment will possibly be deleted but if a certain conker hued candidate wins in the US then everyone’s savings and the economy in general will take a lurch. Not sure which way for those invested in ‘the markets’ via their pensions but I can do without the excitement to be honest. May make the buget look like a sideshow. 

vacheron

pterri said:

This comment will possibly be deleted but if a certain conker hued candidate wins in the US then everyone’s savings and the economy in general will take a lurch. Not sure which way for those invested in ‘the markets’ via their pensions but I can do without the excitement to be honest. May make the buget look like a sideshow. 

My personal opinions of the "conker hued candidate aside; during its last reign, the S&P steadily increased by about 55% over those 4 years. 

I would happily take a repeat of that performance from now until January 2029!... it would allow me to pull my planned retirement date forwards by about 3 years! 😁  

FIREDreamer

vacheron said:

pterri said:

This comment will possibly be deleted but if a certain conker hued candidate wins in the US then everyone’s savings and the economy in general will take a lurch. Not sure which way for those invested in ‘the markets’ via their pensions but I can do without the excitement to be honest. May make the buget look like a sideshow. 

My personal opinions of the "conker hued candidate aside; during its last reign, the S&P steadily increased by about 55% over those 4 years. 

I would happily take a repeat of that performance from now until January 2029!... it would allow me to pull my planned retirement date forwards by about 3 years! 😁  

Throwing Ukraine under a bus won’t be good for global peace nor global returns. 🇺🇦🇺🇦🇺🇦