The less well off Higher Rate Taxpayers (they are not all millionaires) may not be able to pay so much into a pension fund, and therefore reduce its worth for all contributors!
Georgie boy is after your pension money!
- Thread starter delc
- Start date
pendodave
Tour Rookie
This is certainly what happens with mine. You can also lob stuff in the pension to keep your taxable income under 50k to avoid the family allowance clawback if you are suitably motivated I believe.
D
Deleted member 18588
Guest
Question of priorities.
Perhaps a smaller house, fewer expensive holidays, no golf club & gym memberships, smaller car.
As I say it depends how much importance is placed upon financial security in retirement.
"Toffee or ha'penny!" not always both.
Unfortunately, a lot of younger people don't even think about pensions until it's really too late. These days they are too busy paying back student loans, buying over-priced houses and having children. They may subscribe to the live fast, die young philosophy. By the way, a proportion of people don't live long enough to claim a pension. This happened to my wife who died aged 59. I do get a half rate widowers pension from that though!
D
Deleted member 18588
Guest
As I said before; priorities
By all means live fast, die young but if you don't go early it isn't for the rest of us to fund your retirement.
Doesn't there need to be a confidence thing here? If you invest in a pension, you need to know that your money is safe, have some idea of what income to expect when you do retire, and above all that it cannot be raided by unscrupulous business men (e.g. Robert Maxwell) or Chancellors of the Exchequer (e.g. Gordon Brown, George Osborne) when it suits them!
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The financial security of this country has gone to the dogs.
I can see a lot more shoe boxes being shoved under the bed regarding future savings.
MP's don't care what happens to 'our' money as long as 'their' money is safe.
They handout money to everywhere else than look after the people who provide it, including non-contributors and that's the real problem.
If those people who work hard all their life and contribute, there should be no doubt whatsoever that they're going to be looked after. The retirement age should never be moved nor the pots bled dry.
If your a dole bum, an illegal or foreigner with status then you never see a penny out if you ain't paid a penny in.
Get a job or get out.
I can see a lot more shoe boxes being shoved under the bed regarding future savings.
MP's don't care what happens to 'our' money as long as 'their' money is safe.
They handout money to everywhere else than look after the people who provide it, including non-contributors and that's the real problem.
If those people who work hard all their life and contribute, there should be no doubt whatsoever that they're going to be looked after. The retirement age should never be moved nor the pots bled dry.
If your a dole bum, an illegal or foreigner with status then you never see a penny out if you ain't paid a penny in.
Get a job or get out.
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Ethan
Money List Winner
Mickie
So you worked in the pensions business for years. Good for you. Doesn't make you an expert in fiscal policy, though, and your opinion on how pensions should be funded is as valid as anyone else, but no more so.
As you know pensions form a part of the big picture of the economy and what happens to people's money. Tax and NI (same thing really) are a huge part of personal finance. With recent changes tapering personal allowances meaning a marginal rate of mid 60%, as well as limits on the lifetime and annual allowances, with more tapering of the annual allowance to come soon, higher rate tax payers get a reduced return on their pension investment compared to others. Is this fair? I would argue not.
Someone on £30k pays something in the region of £6500 tax/NI a year.
Someone on £100k pays £34000 tax/NI a year
Someone on £175000 pays £71000 tax/NI a year
So the highest earner there, on 5.5 times the salary of the lowest, pays 11 times the tax and NI. And they will shortly receive less tax relief (not even the same) as the lowest earner, because their annual allowance will taper down and the rate of relief will be fixed for all.
So is it reasonable for the high earner to pay a disproportionately higher amount of tax but receive a disproportionately lower rate of tax relief, not even the same relief, on their pension payments as the lower earner?
The fiscal policy background is that the Tories have conned the public into thinking that the public purse operates like a current account, and must be balanced. That is nonsense, as anyone with an economics 'O' level knows, but it is a way to sell an ideological political policy which involves running down public services so they can sell them off to the private sector.
They have also decided that high earners will never vote Labour, and some middle earners who may have voted Labour will like the class war that appears to be taking place against high earners, so they can bash these people without much political cost.
@Ethan, very much agree with most of your post but I didn't do 'O' level economics. Genuine question, not looking for a political argument. Why shouldn't the public purse be balanced? Money out equals money in. The alternative, in my eyes, is to borrow more and more money, with even more money needed to be spent paying interest on previous borrowing, which in turn means even less available for public services.
Britain should look after Britain and when, and only when, our books are balanced should we look at extending out our financial arms.
This country is too hell bent on helping those who don't deserve help and this is affecting our pensioners the most.
This country is too hell bent on helping those who don't deserve help and this is affecting our pensioners the most.
Ethan
Money List Winner
Don't take my opinion for it, read what 77 economists had to say:
http://www.theguardian.com/politics/2015/jun/12/osborne-plan-has-no-basis-in-economics
The irony is that at the same time, Osborne is selling off as much of the family silver as possible, to make short term gains. These may result in long term losses, as with Gordon Brown's sell off of gold. Osborne is also happy for PFI projects at punitive interest rates because these are off balance sheet. This is simply gaming the system, in which something that doesn't count doesn't matter. It mayors a great deal and explains why some many NHS Trusts are in constant financial crisis.
I didn't do 'O' level economics either.
Just out of interest, why shouldn't the public finances be run like a personal bank account, with a requirement to maintain a positive balance. If a private person had behaved like some recent Governments, particularly the Blair/Brown one, they would have gone bankrupt years ago, and also locked up for embezzlement! Governments seem very good at handing out our money to many undeserving causes and spending vast sums on pet projects such as HS2. At best overspending tends to cause inflation, or a need to service debts.
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I can never work out why the lottery never made up for the shortfalls in our economy, before it was given to outsiders.
People didn't mind paying extra pounds out of their wages for the dream.
People didn't mind paying extra pounds out of their wages for the dream.
A percentage of lottery money does go to the Treasury! Regard it as being a lottery tax!
Ethan
Money List Winner
Because much of the economy doesn't operate like you are simply buying, selling, saving and borrowing from your current account. A lot of the borrowing is notional, some counting against the balance sheet, others not. Most western economies have a large national debt which will never be paid off. The US national debt is $21 trillion. The U.K. is £1.6 trillion. These will never be paid off and don't need to be. Some countries are also creditors, because they hold debt from other countries and a very small number of countries are bet creditors, hold more debt than they owe. Norway is one such country, due to its oil reserves.
The yearly budget which results in deficit is a minor and perhaps insignificant part of that and so long as the deficit us accrued by useful investment the economy will benefit in the long term. The important consideration is what the deficit is spent in. If it is spent giving money to hedge fund readers who will offshore it, it is bad debt. If it is spent on something that will drive the economy, it is money well spent. Funny that this Govt which claims to want to reduce the debt is selling off stuff to produce a small amount now but waste money for generations. They would be better increasing the average wage which would drive more money into the economy and which would recirculate in the economy.
D
Deleted member 18588
Guest
[/QUOTE]Mickie
So you worked in the pensions business for years. Good for you. Doesn't make you an expert in fiscal policy, though, and your opinion on how pensions should be funded is as valid as anyone else, but no more so.
So you worked in the pensions business for years. Good for you. Doesn't make you an expert in fiscal policy, though, and your opinion on how pensions should be funded is as valid as anyone else, but no more so.
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So who do we owe this £1.6 trillion to, and what happens if they decide we are not credit worthy and call the debt in?
Which would drive prices up, make our exports more expensive and bring in less money from exports as foreign buyers buy elsewhere.
Whether it's granted or not I'd question the fairness in changing something mid stream. If someone had said 25 years ago we're going to do 'x' for all new pension savers it would have given those new savers the opportunity to plan better than if it's landed on them with virtually no notice and no time to save extra.
Ethan
Money List Winner
Mickie
So you worked in the pensions business for years. Good for you. Doesn't make you an expert in fiscal policy, though, and your opinion on how pensions should be funded is as valid as anyone else, but no more so.
Well, you are expert in cherry picking a few points to argue and ignoring most.
So you worked in the pensions business for years. Good for you. Doesn't make you an expert in fiscal policy, though, and your opinion on how pensions should be funded is as valid as anyone else, but no more so.
Well, you are expert in cherry picking a few points to argue and ignoring most.
chrisd
Major Champion
It would be like Greece, an enormous debt and they didn't let them default and go bust. Everyone borrows off everyone else and the world economy would go completely pop if we, or one of the bigger countries defaulted due to the domino effect
