If RR is putting up income tax later this month, would it be wise to extract taxable pension?

zagfles

Cobbler_tone said:

Treasury ‘insiders’ suggest the raid on the TFLS has been shelved. The 2p up/2p down seems a consistent theme, unless you pay 40% tax and NI will still apply.
Lead article from the Telegraph. Doctors and Teachers not happy. 
If that transpires I could consider a bigger TFLS but would wait for the brains to crunch the numbers. Probably hold fire to see what the subsequent chancellor reverses.

I imagine that would be combined with a reintroduction of a pensioners' tax allowance so they can avoid accusations of hitting low income pensioners. It would of course still hit higher income pensioners and those drawing pensions under state pension age.  

westv

The "raid on the TFLS" has been shelved because it was never considered in the first place.

Cobbler_tone

zagfles said:

Cobbler_tone said:

Treasury ‘insiders’ suggest the raid on the TFLS has been shelved. The 2p up/2p down seems a consistent theme, unless you pay 40% tax and NI will still apply.
Lead article from the Telegraph. Doctors and Teachers not happy. 
If that transpires I could consider a bigger TFLS but would wait for the brains to crunch the numbers. Probably hold fire to see what the subsequent chancellor reverses.

I imagine that would be combined with a reintroduction of a pensioners' tax allowance so they can avoid accusations of hitting low income pensioners. It would of course still hit higher income pensioners and those drawing pensions under state pension age.  

I guess I am fortunate to have not pressed the button on early retirement yet. Planning to go at 57 next Autumn but enough time to review the changes and maybe do a few more months. My plan is currently robust from 57-67.

I hope it doesn’t scupper too many who have already ‘pushed the button’, or those of course who are already genuinely struggling.
It’s the press (who not just with the budget) revel in attempting to whip everyone into a frenzy. Hard to believe that there was a time when news coverage was based on reporting facts.

Aretnap

Cobbler_tone said:

zagfles said:

Cobbler_tone said:

Treasury ‘insiders’ suggest the raid on the TFLS has been shelved. The 2p up/2p down seems a consistent theme, unless you pay 40% tax and NI will still apply.
Lead article from the Telegraph. Doctors and Teachers not happy. 
If that transpires I could consider a bigger TFLS but would wait for the brains to crunch the numbers. Probably hold fire to see what the subsequent chancellor reverses.

I imagine that would be combined with a reintroduction of a pensioners' tax allowance so they can avoid accusations of hitting low income pensioners. It would of course still hit higher income pensioners and those drawing pensions under state pension age.  

I guess I am fortunate to have not pressed the button on early retirement yet. Planning to go at 57 next Autumn but enough time to review the changes and maybe do a few more months. My plan is currently robust from 57-67.

I hope it doesn’t scupper too many who have already ‘pushed the button’, or those of course who are already genuinely struggling.
It’s the press (who not just with the budget) revel in attempting to whip everyone into a frenzy. Hard to believe that there was a time when news coverage was based on reporting facts.

On a back of an envelope calculation, a 1-2% rise in income tax would force me to take drastic action to protect my boringly middle-class retirement plans, such as working for an extra 3 months, taking a low stress part time job for a year or so after I quit my high stress full time one, or taking maybe one less holiday every couple of years. Or most likely, a bit of all three.

Which goes back to my earlier point - anyone who is drastically rethinking their retirement plan because of this either didn't stress test their plan anything like enough, or (more likely) is panicking completely unnecessarily.

Qyburn

I'm reading all this forgetting that it won't directly affect Scottish income tax.

finbaar

If........

Cobbler_tone

westv said:

The "raid on the TFLS" has been shelved because it was never considered in the first place.

Good to have someone on the inside. The same as not increasing income tax….
You can never say never on anything.

Grumpy_chap

Qyburn said:

I'm reading all this forgetting that it won't directly affect Scottish income tax.

AIUI, if IT goes up and NI goes down the value of the block grant from Westminster to Holyrood will reduce.
Holyrood will then be able to increase their IT to compensate for the difference, or may choose an alternative mitigation to ensure balanced books.
https://www.bbc.co.uk/news/articles/cwyp1dj8vqzo

Secret2ndAccount

NorthYorkie said:

The income tax rate is fixed for a complete tax year so any increase will only apply from 6 April next year.

The income tax rate is fixed forever, by the Finance Act... Until they enact a fresh Finance Act... Which they do every year, after the Budget. And it frequently applies the various tax changes retrospectively, backdated to April 6th or to the date of the budget.

Zagfles said:

It would also be ridiculously complicated to have 2 income tax rates in one tax year. 

For PAYE employees it would only be slightly ridiculously complicated to implement. It would mean a software update, but the math isn't hard. No worse than implementing different rates for Scotland, or stopping charging someone NI after they hit SPA.
Self employed people already had to file two sets of accounts for one year, last year. Google 'Basis Period Reform' for those who aren't in the know. Which I suppose was ridiculously complicated, but they still did it. Most of those people will be switching to monthly reporting soon anyway, or already have.

For the record, I too think the change will occur from next April 6th. I'm sure some people who can will bring forward bonuses, or delay expenses to gain the extra 2%.  I haven't started drawing from my SIPP yet, but I'm thinking about cashing in a small pot or two before April 5th - perhaps the motivation I need to start buying equities in my GIA again.

westv

Secret2ndAccount said:

,And it frequent It would mean a software update, but the math isn't hard. 

.

The what?