Totally wrong info just given on the Money show

SVaz

Just seen Martin say that someone earning £20,000 can pay in £60,000 to their pension using previous years allowances and worse still, the ‘expert’ agreed with him 🙄

artyboy

Yep, made a total hash of that one. It was pretty painful to listen to...

dunstonh

SVaz said:

Just seen Martin say that someone earning £20,000 can pay in £60,000 to their pension using previous years allowances and worse still, the ‘expert’ agreed with him 🙄

Technically, there are a small number of  scenarios where that is possible but yes, that is wrong for the majority.

hugheskevi

I don't think the current year's earnings that qualify for tax relief were actually stated. The £20,000 reference was for the past 3 years and Martin said that if you had the money you could put in an extra £60,000 using carry-forward. That is true, although it infers the Annual Allowance is £40,000.

So I don't think anything was definitively incorrect, but it was grossly misleading as essential details were not given, and the explanation assumed discussion of Annual Allowance and earnings of at least £120,000 but under about £200,00 in current year without ever stating that. Even a moderately informed viewer would be misled by the poor explanation, as those are very large assumptions to go unstated.

hoc

It is one of the most repetitive programmes on TV, most of the themes (utility bills, credit cards, mortgages, pension savings card switches) are rehashed in every series and yet there are always numerous inaccurate and incomplete information presented.

The truth is, the alternative guy is better. Broader topics and more educational.

penners324

Don't find his presentation style particularly good. Talks far too fast and only provides limited information.

zagfles

hugheskevi said:

I don't think the current year's earnings that qualify for tax relief were actually stated. The £20,000 reference was for the past 3 years and Martin said that if you had the money you could put in an extra £60,000 using carry-forward. That is true, although it infers the Annual Allowance is £40,000.

So I don't think anything was definitively incorrect, but it was grossly misleading as essential details were not given, and the explanation assumed discussion of Annual Allowance and earnings of at least £120,000 but under about £200,00 in current year without ever stating that. Even a moderately informed viewer would be misled by the poor explanation, as those are very large assumptions to go unstated.

It seemed to be based on someone earning £20k and the myth they'd mentioned earlier that the max annual contribution is the lower of £60k and earnings, and therefore someone earning £20k could only carry £20k pa forwards. Which is the classic confusion between the tax relief limit and the AA which we see here regularly and have done for years. It's not helped by things like this. 

shortseller09

hoc said:

The truth is, the alternative guy is better. Broader topics and more educational.

Who's that?

hugheskevi

zagfles said:

hugheskevi said:

I don't think the current year's earnings that qualify for tax relief were actually stated. The £20,000 reference was for the past 3 years and Martin said that if you had the money you could put in an extra £60,000 using carry-forward. That is true, although it infers the Annual Allowance is £40,000.

So I don't think anything was definitively incorrect, but it was grossly misleading as essential details were not given, and the explanation assumed discussion of Annual Allowance and earnings of at least £120,000 but under about £200,00 in current year without ever stating that. Even a moderately informed viewer would be misled by the poor explanation, as those are very large assumptions to go unstated.

It seemed to be based on someone earning £20k and the myth they'd mentioned earlier that the max annual contribution is the lower of £60k and earnings, and therefore someone earning £20k could only carry £20k pa forwards. Which is the classic confusion between the tax relief limit and the AA which we see here regularly and have done for years. It's not helped by things like this. 

The assumption stated was someone earning £20,000 in the last 3 years, but nothing was stated about the current year. It was said such a person could put £60,000 into a pension this year, if they had the money.

Absolutely misleading and unhelpful, but I don't think anything was definitively incorrect under some very specific assumptions. 

If the assumed individual earned over £120,000 in the current year (rather improbable after 3 years of earning £20,000 but possible), they could put in £120,000 into a pension and benefit from tax relief on the full contribution using £60,000 of carry-forward from the past three years. If subject to tapered Annual Allowance, they would have at least £10,000 of Annual Allowance from current year, and so again could put in an extra £60,000 using carry-forward if they wished. They actually have at least £80,000 of carry-forward available (assuming no unstated large other source of income), and almost certainly more as only their earnings of £20,000 were stated and not their pension input amount.

I am certain that was not the intended message, and nor would any listener interpret that as the situation being discussed, but as stated I do not think any single point was definitively incorrect.

NoMore

In reality you can spin it anyway you want to say the example was right, because it is. 

There is no limit on the amount you can contribute to a pension, there is limits on the amount you can contribute and not get penalised. AA does not prevent you putting more in just that you will get charged if you do. Tax relief limit is similar, above it you are not entitled to the tax relief so it would be returned. This is unlike say ISA limits, which is a hard limit and exceeding them would result in the excess being removed from the ISA wrapper.

There are good reasons for not breaking these limits and why its advised not to, but there's nothing legally preventing you from doing so.

I agree that it doesn't help people to understand these limits and the consequences when you present it as described in the programme.

Pollycat

penners324 said:

Don't find his presentation style particularly good. Talks far too fast and only provides limited information.

I find it quite 'shouty' and not great to listen to.