Pension tax relief under threat

[vkurup]

For those who said taking away child benefit from 60k was ok.. well I agree. But would like to hear views of the same folks on the proposed plans to cut in pension tax relief.


According to today's Financial Times, George Osborne is once again considering reducing the tax relief available on pension contributions. The FT believes the most likely scenario is a cut in the pension allowance from £50,000 to £40,000, or even £30,000. Others have suggested the government could remove higher rate tax relief altogether. By doing so, an extra £7 billion a year in taxes could be raised.


Anyone wants to cast the first stone?

 

[Val]

Why not, anyone in the higher tax bracket needs no assistance from the government.

 

[Val]

Why not, anyone in the higher tax bracket needs no assistance from the government.

Should add anyone who can pay £50k to a pension annually is on serious wonga

 

[Val]

Vkurup, I get the feeling you misread this tax cut my friend, it appears to be a tax on the wealthy.

 

[Hobbit]

Tax away. There's never a chance of me being able to save £50k a year.

 

[walshawwhippet]

Agree with the 4 posts above :thup:

 

[vkurup]

I dont mind if the tax is on 50K+ contributions. However, if I read this right, higher tax bracket fellas (i.e. those earning more than 35K) will get no relief on their pension contribution.

 

[Val]

I dont mind if the tax is on 50K+ contributions. However, if I read this right, higher tax bracket fellas (i.e. those earning more than 35K) will get no relief on their pension contribution.

Your not reading it right

 

[vkurup]

Your not reading it right

I hope u r right.. I can then go back under my rock..

 

[Val]

I hope u r right.. I can then go back under my rock..

No need to go anywhere, he's looking to put a squeeze on the mega earners but also on those earning over £80k in the public sector

 

[vkurup]

No need to go anywhere, he's looking to put a squeeze on the mega earners but also on those earning over £80k in the public sector

Sounds good... since I am neither :thup:

 

[Val]

Sounds good... since I am neither :thup:

To be fair the FT article is a bit misleading, but read it right through. It could affect higher bracket earners on final salary pensions approaching pension age.

No need for me to worry yet.

 

[vkurup]

To be fair the FT article is a bit misleading, but read it right through. It could affect higher bracket earners on final salary pensions approaching pension age.

Final salary pension... no chance of that
retirement.. no chance of that either..

 

[duncan mackie]

Tax away. There's never a chance of me being able to save £50k a year.

such an attitude is very dangerous, the consequences to you could be huge in the decades ahead.

just looking at it in a really simple way, what is saved via pensions ends up taxed on output (the tax free element has been continually erroded since late '80s legislation and will inevitably end up as a purely nominal sum at some point). The tax collected on these pensions will be a significant contribution to the cost of state pensions, let alone public sector pensions (which are also unfunded), and things like the NHS...

if you want to consider the more likely wider implication - the person whose choice becomes impacted moves all the way from trying to put aside enough to give them a 'better' retirement and simply decides not to save anything (that way) and settle for state reliance.

however, my understanding is that the headline here is not the real issue - what's caused concern is the mess that unstructured changes to regulations have made to both product and distribution that mean that people are turning away from regular structured saving (of a part of their taxed income) and replacing it with lump sums (from whatever source) that are attracting more tax relief (on the way in) than the resultant pension would be subject to (on the way out) - and people are trying to find ways to prevent it (when it's really irrelevant and probably quite constructive in the greater scheme of things).