It all depends on what you want to do with your life, the income you need when going part time and in retirement. Plus probably a few other variables, we are all different. The pension you will get tax relief on the way in as previously mentioned but may pay tax when taking an income from it. ISAs are a great tax wrapper and the money going is from taxed income so no tax to pay when accessing. Happy to have a chat and give you a steer in the right direction if helpful, just drop me a DM.
obv depends on your personal circumstances eg other savings, need to access cash, pension contributions to date, health, marginal income tax rate.
Interesting post, thanks
The whole thing doesn't sit well with me. Tomorrow we have 2 days of teacher strikes because they are being denied a decent pay reward after a decade of pay erosion.
…..yet they have pretty much the best final salary pension available anywhere.
It raises very little actual revenue doesn’t it ? Personally I would scrap or reduce significantly the tax relief on contributions - do that and the LTA becomes redundant.
That’s what I said in post 594, basic rate tax relief for all, giving a level playing field. For everyone, £100 of investment costing the individual £80 and public purse £20.
Pushing it a bit to link teacher strikes which affect all the children who have already lost weeks of education to Covid, with 'wealthiest families'. I doubt many will conflate the two nor is a backlash likely. £1m in a pension pot isn't going to get close to generating the returns that many individuals earned in their working lives and, like it or not, some people earn quite a lot of money. That aside, the unintended consequence of George Osborne's pension tax regime was that high earners in jobs all of us needed filled, like GP's, saw no reason to put the hours in and went into retirement or part time. That's one of the reasons why you and I can't get a GP appointment in less than 2 weeks.
Indeed. It'd be interesting to see how big a pension pot someone would need to match the pension of a long serving teacher. Pretty big I reckon.
Exactly. By playing the system, if you are a higher tax rate payer and stash away as much as you can in your pension in your final working years you can make a big profit in a short period when you take 25% tax free and pay low rate tax on the remainder. All this if you are 55 (might have gone up).
Unless Mr Hunt ( or a following Chancellor) changes it, it is 55 now and goes up to 57 in 2028.
I've used the teachers as an example because giving generous pension breaks to the top 2% shouldn't be a priority right now. Yet somehow they've managed it.
From what I’ve read, a middle ranking teacher could easily retire on a pension of 40k pa at 60. That requires a 1.5m+ pot for anyone on a DC scheme….well over the current LTA.
And Labour agree, Wes Streeting stated Labour’s plan, the Tory’s have copied it. The argument, worth it to get the wealthy such as surgeons back to work.
i wonder what that would cost someone each year to build a 1.5m pot
Couple of grand in your pension every month from about the age of 30, should do it
Bloody hope so I want to tap into one of my pensions when I'm 55. 26 days away.
