seagullsovergrimsby
#cpfctinpotclub
A good idea if brought in , any amount over £100k will just be added to the pension annuity. Why should only the wealthy benefit from a massive tax free lump sum of £268k at 55 ?
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[Politics] The Labour Government
- Thread starter Super Steve Earle
- Start date
- Oct 17, 2008
- 14,170
She knows. Nobody in Labour likes this policy
Is it PotG?
Thrifty non-licker
A lump sum north of £100k is not rare, and it is not just the 'wealthy' who benefit from it.
Sirnormangall
Well-known member
- Sep 21, 2017
- 3,151
Hopefully not true as it would upset the retirement plans of many (not necessarily wealthy) people - plans based on getting a tax free lump sum, as promoted by the pension providers. If as rumoured they also remove or reduce tax relief on contributions it won’t leave much of an incentive to save for retirement - other than ISAs which could also be subject to government change.
Super Steve Earle
Well-known member
- Thread starter
- #3,245
Super Steve Earle
Well-known member
- Thread starter
- #3,246
Because they've planned their income, expenditure and retirements around it for years?
- Jul 10, 2003
- 27,619
Indeed a lump sum north of £100K is not rare.
But to reach the current 25% limit of £268,275 requires a lump sum of north of a million. If this rumour of the limit being dropped to £100K that you have found turns out to have any truth in it, it means people with a pension of between £400,000 and >£1M may be affected.
So your people 'with a lump sum of north of £100K' will be quite safe.
I have to ask, do you do it on purpose
beorhthelm
A. Virgo, Football Genius
- Jul 21, 2003
- 35,967
never understood why pensioners got any tax free lump sum, we get tax relief on it going in.
the real story is apparently bottling out reducing higher rate tax relief, for fear it upsets the poor public sector workers on >£50k.
Don't recall much outcry from these folk when Jeremy Hunt scrapped the unlimited amount and set the current cap of £268,275.
And at least this time they seem to be preparing a prover impact review first.
It also seems to be coming from the IFS in the first instance - will only affect 1 in 5 retirees.
The Institute for Fiscal Studies (IFS) has estimated that lowering the limit to £100,000 could affect one in five retirees.
The government is reportedly looking at recommendations by two major think tanks to reduce the cap in an effort to raise around £2bn in revenue at the Budget.
Influential think tanks the IFS and Fabian Society have made the case for bringing the lump sum down to £100,000, arguing that the current cap favours the wealthy.
www.cityam.com
And at least this time they seem to be preparing a prover impact review first.
It also seems to be coming from the IFS in the first instance - will only affect 1 in 5 retirees.
The Institute for Fiscal Studies (IFS) has estimated that lowering the limit to £100,000 could affect one in five retirees.
The government is reportedly looking at recommendations by two major think tanks to reduce the cap in an effort to raise around £2bn in revenue at the Budget.
Influential think tanks the IFS and Fabian Society have made the case for bringing the lump sum down to £100,000, arguing that the current cap favours the wealthy.
Reeves mulls £100,000 cap for tax-free pension lump sum
Currently, most savers can take 25 per cent of their pension pot tax-free once they reach the age of 55, up to a limit of £268,275.
www.cityam.com
chip
Well-known member
Not if you have a mixed DB and DC scheme, at least on the provider's valuations you can quite easily go over the current threshold. This is the sort of scheme that many of those people who have just been given very large pay rises have. I think it would have to be phased in, pension planning works best with stability, and that won't raise much at all. It needs more thought and planning than the current idiots have shown so far unless they really have given up on pensioers. Radio 4 mostly saying they will change the rules of how debt is calculated to liberate £17B, imaginary black hole sorted and probably filled with hot, sequestrated CO2.Indeed a lump sum north of £100K is not rare.
But to reach the current 25% limit of £268,275 requires a lump sum of north of a million. If this rumour of the limit being dropped to £100K that you have found turns out to have any truth in it, it means people with a pension of between £400,000 and >£1M may be affected.
So your people 'with a lump sum of north of £100K' will be quite safe.
I have to ask, do you do it on purpose
Is it PotG?
Thrifty non-licker
Indeed a lump sum north of £100K is not rare.
But to reach the current 25% limit of £268,275 requires a lump sum of north of a million. If this rumour of the limit being dropped to £100K that you have found turns out to have any truth in it, it means people with a pension of between £400,000 and >£1M may be affected.
So your people 'with a lump sum of north of £100K' will be quite safe.
I have to ask, do you do it on purpose
Not sure why you are being so obtuse, it's out of character.
Should this be forced upon us, then it will affect the financial plans of many normal folk.
1 in 5 retirees according to the IFS.
Is it PotG?
Thrifty non-licker
Two organisations, the Fabian Society and the Institute for Fiscal Studies (IFS), have proposed such a measure since Labour won power, which according to the latter would impact one in five retirees.
In a report published on 11 September, the IFS said: “This subsidy to pension saving has an estimated long-run annual cost of £5.5 billion, with 70% of the relief going to pensions accumulated by those in the top fifth of earners when making their contributions.”
Reeves mulls pension tax-free cash raid
The move could affect one in five retirees and raise £2 billion a year for the Treasury as the chancellor seeks ways to prop up the nation’s finances.
www.ii.co.uk
Blue&WhiteSea
Well-known member
I thought they were supposed to be going after those who could afford it the most. If that were the case then they shouldn't even be looking at this as those who can afford the most are those with a pension pot over a million who already have their tax free cash capped - this initiative would not impact the most wealthy at all and would further squeeze those of us who are relatively well off but far from wealthy - they need to start taxing wealth instead of income, things like capital gains and iht would affect the wealthy much more.
- Jul 10, 2003
- 27,619
Because those of us with a pension pot of over £1m are the ones who are really suffering
A bit like the defence of the 4% of us who pay IHT. I really appreciate you trying to justify me not getting taxed more, but I think I could manage a few more quid for people who are really struggling thanks
I think I already have somebody ready to stick up for me.
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Wait, so is the new mantra that nobody should ever target pensioners, even the wealthy ones, for anything?
portslade seagull
Well-known member
Think my pot was 650k and took a sum North of 100k also cashed in a pension that had only run for 4 bit yrs after the company reduced the benefits as it wasn't worth anythingIndeed a lump sum north of £100K is not rare.
But to reach the current 25% limit of £268,275 requires a lump sum of north of a million. If this rumour of the limit being dropped to £100K that you have found turns out to have any truth in it, it means people with a pension of between £400,000 and >£1M may be affected.
So your people 'with a lump sum of north of £100K' will be quite safe.
I have to ask, do you do it on purpose
Super Steve Earle
Well-known member
- Thread starter
- #3,259
Just for context, I have a DB pension. I never earned enough even to pay higher rate tax, but I worked for the same company for many years. Had I taken a full 25% lump sum, it would have exceeded £100k. But that reduces income in retirement. But taking the £100k+, only gives you money to draw down for a few years or earn a bit of interest income if rates are high, which until recently, they hadn't been. The pension itself is standard rate tax and miles away from higher rate. The definition of wealth is different for everybody. I tend to think paying higher rate tax is a good starting point, but at the lower levels at actually starts too low to be realistic. If you are drawing down capitol for living expenses, you aren't really wealthy. If you rely on interest from capitol, you can't reduce the capitol sum much before the loss of interest starts to bite. Just routinely penalising pensioners based on perceived levels of wealth is bizarre, clumsy and clearly under researched. Unlike the retirement planning real people have made in the real world.
He's a f***ing hero, but he missed something in that interview.
Nandy opened by saying this was put in place to help deal with the "£22 billion economic black hole" before going on to try and pretend that this policy does not represent a cruel abandonment of some of the poorest and most vulnerable in our society.
Lewis should have asked her what the government would do if they did manage to reach all of those who are not currently receiving pension credit who should be receiving it, as Nandy seemed to think that was achievable.
If the government was successful with that, this policy and associated actions would end up costing the government billions of pounds, not saving them a bit.
The duplicitous government and those who speak for them simply can't have it both ways. They can't be doing this to try and save money, and be sincere in their aims to get everyone who qualifies onto pension credit.
Those two aims are directly contradictory.