When is 268k not 268k?

RogerPensionGuy

I'm still 99% feeling that the 268K limit will just remain and fiscal drag will just erode it over time.

This whole 25% tax free from pensions is just a mess, if I remember correctly since it was introduced 2005/06ish it has been 25% of between 1.8M to 1M and cycled both up & down making planning very difficult.

Think it started at 1.5M in 2006, so removing the poking it up and down football governments playing, that 2006 1.5M is like 2.6M in 2025 due inflation.

But now it's just 1.073 making sensible planning more like luck.

****

Altho previously negative pension changes always had protections put in place & helpful for some people and not helpful for others.

Currently just like every pre budget, press and commenters never rule out government making an immediate change and thus no protections being applied.

I had a chat with a friend this morning about this TFLS game of football and he is swaying my feelings about leaving my TFLS alone this time around. 

His view was simple enough, if I empty out my maximum TFLS now, I know it will be tax free, however if they indeed chop 268K to say 100K and I took out say 268K(example) I would pay 40% Tax on 168K being a 67K Tax bill.

I'm now feeling very sober and just trying to understand workout my personal risk & reward views. 

Pull it all out now & avoid this speculation every budget and just deal with having more liquid cash than I ideally wanted now.

My friend this morning said governments need cash now and fiscal drag is just too slow and being very bold in this 2025 budget maybe just what they will do. 

*******

I just spent an hour re-researching pensions stuff since A Day in 2005/06 and it's just so messy, I do wonder if they again introduce more pension protections it will make it just more hard to understand and switch off jist more people. 

Maybe I'll ask my SIPP platform if there's a happy ask/request time zone to start the process giving me a foot in each camp over the budget zone. 

dean73

When is 268k not 268k?

When my wife gets her hands on it.

ali_bear

I'm not a project manager but I used to know a very good one. I think she would have something fairly pithy to say about getting your planning and your luck mixed up. 

What we are referring to as "this budget" is still two months away. 

MetaPhysical

It's so hard to plan.  The challenge we face is that we speculate there'll be protections here and there and she won't do it, etc, etc. Consultants, doctors, senior public sector figures etc will be up in arms etc.   The problem is if she DOES then there'll be a massive tax hit on people who have built a reasonable pension and these are the very people with the "broadest shoulders" and are not by and large Labour voters anyway.  It's an easier sell to the general public.

If we take all the 268K now, we can feed it into ISAs over a few years.  Stuff the rest on Premium bonds or gilts.

Ideally I'd rather not take the TFC and use UFPLS.  But I am increasingly thinking it might be best if I took it. A bird in the hand and all that.

I have just retired and about to start taking my pensions in two months when my final couple of months of salary runs out.  On balance, I may take the TFC I am entitled to which would be about 250k.  Between me and Mrs MP we can hide 80k (40k this and 40k next FY year) in exactly the same investments in the ISA as they are in the pension.  I then may invest 100k in a gilt ladder in a GIA at 5.6% and I need some money for other other commitments.

No wonder the public are turned off and not engaged in pensions.   People I speak to about them dont trust them and just say the government change the rules.

Cobbler_tone

Love a thread based on rumour, speculation, guesswork and over thinking...along with the usual terror of having to pay some additional tax. 
Sounds like someone needs an IFA. 

GenX0212

RogerPensionGuy said:

I'm still 99% feeling that the 268K limit will just remain and fiscal drag will just erode it over time.

This whole 25% tax free from pensions is just a mess, if I remember correctly since it was introduced 2005/06ish it has been 25% of between 1.8M to 1M and cycled both up & down making planning very difficult.

Think it started at 1.5M in 2006, so removing the poking it up and down football governments playing, that 2006 1.5M is like 2.6M in 2025 due inflation.

But now it's just 1.073 making sensible planning more like luck.

****

Altho previously negative pension changes always had protections put in place & helpful for some people and not helpful for others.

Currently just like every pre budget, press and commenters never rule out government making an immediate change and thus no protections being applied.

I had a chat with a friend this morning about this TFLS game of football and he is swaying my feelings about leaving my TFLS alone this time around. 

His view was simple enough, if I empty out my maximum TFLS now, I know it will be tax free, however if they indeed chop 268K to say 100K and I took out say 268K(example) I would pay 40% Tax on 168K being a 67K Tax bill.

I'm now feeling very sober and just trying to understand workout my personal risk & reward views. 

Pull it all out now & avoid this speculation every budget and just deal with having more liquid cash than I ideally wanted now.

My friend this morning said governments need cash now and fiscal drag is just too slow and being very bold in this 2025 budget maybe just what they will do. 

*******

I just spent an hour re-researching pensions stuff since A Day in 2005/06 and it's just so messy, I do wonder if they again introduce more pension protections it will make it just more hard to understand and switch off jist more people. 

Maybe I'll ask my SIPP platform if there's a happy ask/request time zone to start the process giving me a foot in each camp over the budget zone. 

Surely if you took the money out now then you have done under the current tax rules. Not sure they can/will change rules retrospectively ?

FIREDreamer

Albermarle said:

The £268k may actually get increased one day . Who knows?

This sums up my thoughts on this comment.

PS Can anybody tell me who this is and which film it’s from?

Notepad_Phil

FIREDreamer said:

Albermarle said:

The £268k may actually get increased one day . Who knows?

This sums up my thoughts on this comment.

PS Can anybody tell me who this is and which film it’s from?

He's https://en.wikipedia.org/wiki/J._K._Simmons and I believe it's from one of the earlier spider-man films.

QrizB

Notepad_Phil said:

FIREDreamer said:

Albermarle said:

The £268k may actually get increased one day . Who knows?

This sums up my thoughts on this comment.

PS Can anybody tell me who this is and which film it’s from?

He's https://en.wikipedia.org/wiki/J._K._Simmons and I believe it's from one of the earlier spider-man films.

Spider-Man 2, 2004.

The longer clip is worth watching

https://www.youtube.com/watch?v=Bmx-YCQZElk

https://en.wikipedia.org/wiki/Spider-Man_2

RogerPensionGuy

GenX0212 said:

RogerPensionGuy said:

I'm still 99% feeling that the 268K limit will just remain and fiscal drag will just erode it over time.

This whole 25% tax free from pensions is just a mess, if I remember correctly since it was introduced 2005/06ish it has been 25% of between 1.8M to 1M and cycled both up & down making planning very difficult.

Think it started at 1.5M in 2006, so removing the poking it up and down football governments playing, that 2006 1.5M is like 2.6M in 2025 due inflation.

But now it's just 1.073 making sensible planning more like luck.

****

Altho previously negative pension changes always had protections put in place & helpful for some people and not helpful for others.

Currently just like every pre budget, press and commenters never rule out government making an immediate change and thus no protections being applied.

I had a chat with a friend this morning about this TFLS game of football and he is swaying my feelings about leaving my TFLS alone this time around. 

His view was simple enough, if I empty out my maximum TFLS now, I know it will be tax free, however if they indeed chop 268K to say 100K and I took out say 268K(example) I would pay 40% Tax on 168K being a 67K Tax bill.

I'm now feeling very sober and just trying to understand workout my personal risk & reward views. 

Pull it all out now & avoid this speculation every budget and just deal with having more liquid cash than I ideally wanted now.

My friend this morning said governments need cash now and fiscal drag is just too slow and being very bold in this 2025 budget maybe just what they will do. 

*******

I just spent an hour re-researching pensions stuff since A Day in 2005/06 and it's just so messy, I do wonder if they again introduce more pension protections it will make it just more hard to understand and switch off jist more people. 

Maybe I'll ask my SIPP platform if there's a happy ask/request time zone to start the process giving me a foot in each camp over the budget zone. 

Surely if you took the money out now then you have done under the current tax rules. Not sure they can/will change rules retrospectively ?

The retrospective bit is if they do an overnight change and don't put in place more various protections, then all transactions from this point will be on a new deal, possibly maximum TFLS of 100K in lieu of 268K.

It would be a very very strange thing to do, it would cause chaos, but it would be picking on the so called well off in society and potentially any backlash would be absorbed.

I look back at some relatively sensible stuff they have tried this last period and had to give up, in fact they have put up the costs for Government, I think nothing is out of bounds and pensions are a low hanging fruit with potential quick cash from pension pots and also it would reduce people putting so much income in pensions, a short term cash bump, but a medium and long-term disaster.

A bird in the hand point of view is feeling pretty sensible to me at this point in time, crazy times!