Tax Free Lump Sum and 2025 Budget

Qyburn

LHW99 said:

Not that many in the media picked up on Gordon Brown's cutting of dividend credits to pension funds.

I remember a bunch of publicity, terming it a "raid" on pensions. Plenty still ongoing if you search for "gordon brown pension raid"

LHW99

Qyburn said:

LHW99 said:

Not that many in the media picked up on Gordon Brown's cutting of dividend credits to pension funds.

I remember a bunch of publicity, terming it a "raid" on pensions. Plenty still ongoing if you search for "gordon brown pension raid"

Now yes, but at the time plenty in the media about how it was a good move and wouldn't cause many problems. Very few took a longer term view, particularly in the popular press, hence little public reaction at the time.

Cobbler_tone

It continues. 

https://www.financialreporter.co.uk/budget-rumours-drive-45-spike-in-pension-lump-sum-enquiries.html

After PMQ's today I think it is more likely that the rates of income tax, and/or, NI are about to be increased. It is the bluntest and most straight forward way to generate big numbers and they still have over 3 years in power. 

https://www.bbc.co.uk/news/articles/cz7p15z1y45o

I'm sure a lot of people will be glad when it has been and gone in order to revisit their personal position and adjust accordingly if needed. A good chance there will be no places to hide on some of the changes.

kinger101

Cobbler_tone said:

It continues. 

https://www.financialreporter.co.uk/budget-rumours-drive-45-spike-in-pension-lump-sum-enquiries.html

After PMQ's today I think it is more likely that the rates of income tax, and/or, NI are about to be increased. It is the bluntest and most straight forward way to generate big numbers and they still have over 3 years in power. 

https://www.bbc.co.uk/news/articles/cz7p15z1y45o

I'm sure a lot of people will be glad when it has been and gone in order to revisit their personal position and adjust accordingly if needed. A good chance there will be no places to hide on some of the changes.

I think abandoning the manifesto commitment is the sensible thing.

Hope they do something with the 60 percent cliff edge too.  

Grumpy_chap

kinger101 said:

Cobbler_tone said:

It continues. 

https://www.financialreporter.co.uk/budget-rumours-drive-45-spike-in-pension-lump-sum-enquiries.html

After PMQ's today I think it is more likely that the rates of income tax, and/or, NI are about to be increased. It is the bluntest and most straight forward way to generate big numbers and they still have over 3 years in power. 

https://www.bbc.co.uk/news/articles/cz7p15z1y45o

I'm sure a lot of people will be glad when it has been and gone in order to revisit their personal position and adjust accordingly if needed. A good chance there will be no places to hide on some of the changes.

I think abandoning them is the sensible thing.

Hope they do something with the 60 percent cliff edge too.  

Abandoning Income Tax and NI is highly unlikely.

kinger101

Grumpy_chap said:

kinger101 said:

Cobbler_tone said:

It continues. 

https://www.financialreporter.co.uk/budget-rumours-drive-45-spike-in-pension-lump-sum-enquiries.html

After PMQ's today I think it is more likely that the rates of income tax, and/or, NI are about to be increased. It is the bluntest and most straight forward way to generate big numbers and they still have over 3 years in power. 

https://www.bbc.co.uk/news/articles/cz7p15z1y45o

I'm sure a lot of people will be glad when it has been and gone in order to revisit their personal position and adjust accordingly if needed. A good chance there will be no places to hide on some of the changes.

I think abandoning them is the sensible thing.

Hope they do something with the 60 percent cliff edge too.  

Abandoning Income Tax and NI is highly unlikely.

I meant the pledge not to increase them

Grumpy_chap

kinger101 said:

Grumpy_chap said:

kinger101 said:

Cobbler_tone said:

It continues. 

https://www.financialreporter.co.uk/budget-rumours-drive-45-spike-in-pension-lump-sum-enquiries.html

After PMQ's today I think it is more likely that the rates of income tax, and/or, NI are about to be increased. It is the bluntest and most straight forward way to generate big numbers and they still have over 3 years in power. 

https://www.bbc.co.uk/news/articles/cz7p15z1y45o

I'm sure a lot of people will be glad when it has been and gone in order to revisit their personal position and adjust accordingly if needed. A good chance there will be no places to hide on some of the changes.

I think abandoning them is the sensible thing.

Hope they do something with the 60 percent cliff edge too.  

Abandoning Income Tax and NI is highly unlikely.

I meant the pledge not to increase them

Oh, thanks for clarifying.😉

It would be possible to do something with the 60% cliff edge (higher if NI is considered or in Scotland) by simply allowing those above £100k to retain their Personal Allowance but setting the Additional Rate to start at £100k at the rate of 60%.  It will be fairer (more progressive) than the current arrangements and means that "those with the broadest shoulders" pay their fair contribution.  There would need to be a hike in tax on airfares and ferries to prevent those affected all fleeing the country.  Maybe "those with the broadest shoulders" could escape on a nearly new small boat?  I am sure that France will welcome a large number of high earning wealth creators under the "one in one out" policy.

Is that what you had in mind? 🤔

Cobbler_tone

1p on the basic rate will leave someone around £30 a month down if they earn £50k. £10-20 on lower earners. Think I heard it would raise £8b. Certainly the simplest way to change things.

Bookle

From the Telegraph today. Any merit or weight on recommendations from Fabian society?

"A pressure group of which Rachel Reeves is a member has urged her to cut the tax-free pension lump sum to £100,000.

At present, most savers can take 25pc of their pension pot tax-free once they reach the age of 55, up to a maximum of £268,275.

However, the Fabian Society, a prominent Labour-associated think tank, has suggested cutting the allowance by two-thirds at the Budget on Nov 26 in an attempt to raise £2bn"

kinger101

Grumpy_chap said:

kinger101 said:

Grumpy_chap said:

kinger101 said:

Cobbler_tone said:

It continues. 

https://www.financialreporter.co.uk/budget-rumours-drive-45-spike-in-pension-lump-sum-enquiries.html

After PMQ's today I think it is more likely that the rates of income tax, and/or, NI are about to be increased. It is the bluntest and most straight forward way to generate big numbers and they still have over 3 years in power. 

https://www.bbc.co.uk/news/articles/cz7p15z1y45o

I'm sure a lot of people will be glad when it has been and gone in order to revisit their personal position and adjust accordingly if needed. A good chance there will be no places to hide on some of the changes.

I think abandoning them is the sensible thing.

Hope they do something with the 60 percent cliff edge too.  

Abandoning Income Tax and NI is highly unlikely.

I meant the pledge not to increase them

Oh, thanks for clarifying.😉

It would be possible to do something with the 60% cliff edge (higher if NI is considered or in Scotland) by simply allowing those above £100k to retain their Personal Allowance but setting the Additional Rate to start at £100k at the rate of 60%.  It will be fairer (more progressive) than the current arrangements and means that "those with the broadest shoulders" pay their fair contribution.  There would need to be a hike in tax on airfares and ferries to prevent those affected all fleeing the country.  Maybe "those with the broadest shoulders" could escape on a nearly new small boat?  I am sure that France will welcome a large number of high earning wealth creators under the "one in one out" policy.

Is that what you had in mind? 🤔

Not sure the flippant response is helpful.

The 60 p trap barely raises any money as it drives too much behavioural change.  It is possible to implement something  more effective that doesn't.  Probably similar to just making the 45 p band start at 100K.  


Worth bearing in mind that each penny on the 45 p band raises about 0.25 billion whereas a penny on basic rate about 8 billion.  And in higher rate, 2 billion.


Our system isn't all that progressive if you compare it to other Western European countries.  Where those in moderate income pay more tax rather then thinking it will all be solved by someone who earned more than them.