£2000 NI relief cap on pension salary sacrifice from April 2029 (confirmed)

BlackKnightMonty

MK62 said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

Not sure what this has to do with the potential capping of salary sacrifice for pension contributions, but as an aside, what then is your vision of the way forward here?

Personally I would like to see a contribution/pot style scheme. Where your personal contributions go into it. Something you can top-up; but also change the investment profile. That seems fair. I do like the US style 401k for example.

MeteredOut

BlackKnightMonty said:

MK62 said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

Not sure what this has to do with the potential capping of salary sacrifice for pension contributions, but as an aside, what then is your vision of the way forward here?

Personally I would like to see a contribution/pot style scheme. Where your personal contributions go into it. Something you can top-up; but also change the investment profile. That seems fair.

They could call it a Defined Contribution pension. And to encourage people to invest, provide some tax relief. To make it easy, it could be done by employers via payroll, allowing employees to sacrifice some salary in exchange for pension payments. Not sure that'd catch on though, or what that might be called.

BlackKnightMonty

MeteredOut said:

BlackKnightMonty said:

MK62 said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

Not sure what this has to do with the potential capping of salary sacrifice for pension contributions, but as an aside, what then is your vision of the way forward here?

Personally I would like to see a contribution/pot style scheme. Where your personal contributions go into it. Something you can top-up; but also change the investment profile. That seems fair.

They could call it a Defined Contribution pension. And to encourage people to invest, provide some tax relief. To make it easy, it could be done by employers via payroll, allowing employees to sacrifice some salary in exchange for pension payments. Not sure that'd catch on though, or what that might be called.

The challenge is; transition.

Perhaps a CETV from the state pension ‘pot’ into the mew scheme.

It would be quite nice to have £250k from HMT to invest in my own personal ‘state pension’z

MeteredOut

BlackKnightMonty said:

MeteredOut said:

BlackKnightMonty said:

MK62 said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

Not sure what this has to do with the potential capping of salary sacrifice for pension contributions, but as an aside, what then is your vision of the way forward here?

Personally I would like to see a contribution/pot style scheme. Where your personal contributions go into it. Something you can top-up; but also change the investment profile. That seems fair.

They could call it a Defined Contribution pension. And to encourage people to invest, provide some tax relief. To make it easy, it could be done by employers via payroll, allowing employees to sacrifice some salary in exchange for pension payments. Not sure that'd catch on though, or what that might be called.

The challenge is; transition.

Perhaps a CETV from the state pension ‘pot’ into the mew scheme.

It would be quite nice to have £250k from HMT to invest in my own personal ‘state pension’z

I agree - when considering such things, I always like to ask "if the thing was not in place today, what would the solution be for what that thing is trying to solve". 

And having a mandatory, deducted-from-PAYE, pension contributions going into your own pot would have a very good chance of being the result. There would have to be investment guardrails, otherwise you'd still end up with a percentage of people losing their pot in meme coins and then expecting the state to fund their retirement.

But, as you say, transitioning from the current model where those pots are paying existing pensioners makes that almost impossible to do.

BlackKnightMonty

MeteredOut said:

BlackKnightMonty said:

MeteredOut said:

BlackKnightMonty said:

MK62 said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

Not sure what this has to do with the potential capping of salary sacrifice for pension contributions, but as an aside, what then is your vision of the way forward here?

Personally I would like to see a contribution/pot style scheme. Where your personal contributions go into it. Something you can top-up; but also change the investment profile. That seems fair.

They could call it a Defined Contribution pension. And to encourage people to invest, provide some tax relief. To make it easy, it could be done by employers via payroll, allowing employees to sacrifice some salary in exchange for pension payments. Not sure that'd catch on though, or what that might be called.

The challenge is; transition.

Perhaps a CETV from the state pension ‘pot’ into the mew scheme.

It would be quite nice to have £250k from HMT to invest in my own personal ‘state pension’z

I agree - when considering such things, I always like to ask "if the thing was not in place today, what would the solution be for what that thing is trying to solve". 

And having a mandatory, deducted-from-PAYE, pension contributions going into your own pot would have a very good chance of being the result. There would have to be investment guardrails, otherwise you'd still end up with a percentage of people losing their pot in meme coins and then expecting the state to fund their retirement.

But, as you say, transitioning from the current model where those pots are paying existing pensioners makes that almost impossible to do.

I think there is a lot of opportunity to do this with NEST.

Cobbler_tone

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

In which case (as I’m nowhere near SPA) you’ve never had it so good.

BlackKnightMonty

Cobbler_tone said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

In which case (as I’m nowhere near SPA) you’ve never had it so good.

I don’t believe in fairy stories. There is no ‘happy ending’ with the current state pension.

ClashCityRocker1

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

In which case (as I’m nowhere near SPA) you’ve never had it so good.

I don’t believe in fairy stories. There is no ‘happy ending’ with the current state pension.

Really? That's not an opinion I've noticed you offer before.

Or not more than 500 times anyway.

So far.

BlackKnightMonty

ClashCityRocker1 said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

Cobbler_tone said:

BlackKnightMonty said:

michaels said:

I guess it depends if you treat the state pension as contributory or not.

Not many contribute enough NI to justify the State Pension though do they ;-).

After in total NI (Employer/Employee) from a £35k salary is £5,367.48. How much annuity does that buy over 35 years of contributions?

Hence why state pension is funded by NI and general taxation. 

The impossible question is does everyone get true value for the amount of total tax and NI they pay?
Not forgetting the vast amounts everyone pays directly or indirectly in every aspect of life.

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

In which case (as I’m nowhere near SPA) you’ve never had it so good.

I don’t believe in fairy stories. There is no ‘happy ending’ with the current state pension.

Really? That's not an opinion I've noticed you offer before.

Or not more than 500 times anyway.

So far.

Just think how blessed you are to have my wisdom.

GunJack

hugheskevi said:

BlackKnightMonty said:

I would say current State Pensioners get an absolute steal of a deal. Triple locked SP paid at out at a relatively young age. You’ve never had it so good.

Don't forget the self-employed and long-serving public sector workers, who were the big winners of the change to the new State Pension in 2016. 

Whereas previously they would probably have only received Basic State Pension, they now benefit from full State Pension. Combined with Triple Lock from 2011, that has been a big increase in the amount of State Pension they expected to receive.

Err....not just public sector, but anyone who had a company pension that was contracted-out of serps/s2p surely??