Pension contributions up from 6% to 8.5%!!

jem16

I'mcomingbackasaman wrote: »

According to the contribution rates table I should be paying 5.9% from April 2008 so I'll look into that on Tuesday with my pensions dept.

That 5.9% will actually be 4.72% after tax relief.

As for lower Council Tax bills if we all opt out of the LGPS I doubt that. I've never known a tax to be lowered yet. Council Tax pays towards a lot of things needed to maintain where you live including policing the area.

Although Ian W posted tongue-in-cheek to get you to reconsider your idea to opt out of the LGPS scheme, I think it probably would make a difference to council tax if there was no local government pensions.

Hopefully you will stay in the scheme.

Rabiddog_2

Yes leave the council pension plan, for all the rteasons Ian w says... approx 45% of the money councils get is used to service their Pension Pots. Income tax is being lowered from 22% to 20%. Capital Gains tax is being lowered from 40% to 18%, Inheritance tax is payable only over assets £600,000 (from £300,000).. Yet again Gordon wins the day

bigturnip

Rabiddog wrote: »

Income tax is being lowered from 22% to 20%. Capital Gains tax is being lowered from 40% to 18%, Inheritance tax is payable only over assets £600,000 (from £300,000).. Yet again Gordon wins the day

Or to look at it from another point of view: Income tax is being raised from 10% to 20%, Capital gains tax is being raised from 10% to 18% (Once you take into account the abolition of taper relief) and the change in inheritance tax (which only applies to married couples) is just a simplification of the rules to help the uneducated make use of tax relief that others have been enjoying for years (the threshold has always been £600,000 for married couples if they set it up right). Yet again Gordon introduces more stealth taxes.

Ian_W

I'mcomingbackasaman wrote: »

As for lower Council Tax bills if we all opt out of the LGPS I doubt that. I've never known a tax to be lowered yet. Council Tax pays towards a lot of things needed to maintain where you live including policing the area.

I know what council tax covers and that it is NEVER lowered. However according to my local authority website in round figures 50% of it's budget goes on staff with about a third of that on pensions. If 1/6th of council tax pays for your pension then if there wasn't any - a modest £1200 bill could be cut by £200.
According to the Local Govt Assn the council tax payer pays TWICE what you do for your pension!

However, as jem points out my post was tongue-in-cheek.
I think you'd be a complete twot to leave such a good scheme particularly as you don't seem to know how little you're really paying.
But, hey, that's why life's so great. We're all free to make our own mistakes! Go for it I say.

I'mcomingbackasaman

I'll double check with my pensions department the correct deduction for my salary in case they've got it wrong. Thanks for all the advice.
I'm no mathematician (as you may have guessed ..)
but it seems a large chunk per month out of my salary IF it is only 4.72% after tax relief in my case.

Ian_W

When you look at the figure on your payslip, that sum of money comes out of your wage before tax is applied. So for every £100 you appear to pay into the pension, you'd only receive £78 [£80 next tax year due to decrease in basic rate] because you'd be taxed on it if it wasn't going into your pension.

Dick_here

Stevenic wrote: »

I'm never quite sure why this figure gets banded about so much, with Pension Credit the minimum figure would be £119.05 a week.

http://www.thepensionservice.gov.uk/pensioncredit/home.asp

Not great I know but higher than the basic State Pension figure.

This area has me somewhat perplexed.

We've heard for years the "basic pension won't be around by the time we retire" brigade, yet in recent years state pension provision has been increased in real terms. I certainly don't see any government will have the bottle to start to significantly reduce it again. Have we been lied to all along, or have things changed more recently ?

jem16

I think state pension won't disappear. However what can be changed is pension credit, S2P (or SERPS) etc - probably best not to rely on them.

dunstonh

The basic state pension is almost certainly not going to go away. The areas of risk are the second state pension (what used to be SERPs) which has been reduced a number of times retrospectively and pension credit which is still a disincentive to save for retirement and could end up costing too much to be funded.

I'mcomingbackasaman

Government seem to 'help' families and oaps with claims to benefits, child tax credit, (& childcare costs) council tax benefit for pensioners, but being childless and under 65 means you get nothing except what you go out and earn. It's a struggle earnng enough to live on plus paying into a pension you might receive if your one of the lucky ones. What incentive is it when people who don't pay towards a pension get benefits instead when they retire.