I am no expert in financial matters but if such pension pots are taxable when eventually claimed, is it a big deal?
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Come on, I know we are all miserable and poor but there needs to be a thread.
A cynic might say the tapering in of the childcare support is a trap for Labour. On the face of it a good thing but isn't it telling that it is now accepted (and by some championed as an example of gender equality) that the average family with one young child can't support themselves on one income.
Pension thing just baffles me although I get their humdrum reasoning. Surely the purpose of tax relief on pension contributions is to incentivise the masses to save for an adequate retirement and not rely on the state. Whilst the current system is clunky, I just can't see a justification for giving tax relief for the richest to build enormous pensions. Essentially saying 'hey you know we made you so rich you could retire in your 50s, heres some more money for you!'
Something else bla bla about fuel duty. Anything else of note?
I am no expert in financial matters but if such pension pots are taxable when eventually claimed, is it a big deal?
I'm not a financial adviser. But here goes. Tax-free contributions allow you to benefit from a bigger principal or "pot" from the initial contribution and to defer tax liabilities to better fit with your lifetime spending.
We have a slightly different system in the US with tax-paid (Roth) pension funds which are not taxed on withdrawal and tax-free contribution pension funds where you are taxed on withdrawal.
Well, if you have more than £1.07m in your pension pot you have the potential to do rather better out of this than with previous arrangements. So, yes, I agree. The main driver seems to be to entice older high earning NHS staff not to retire early or to come back into work if retired. If it were me, I'd retire earlier and spend the extra dough!
Most boring budget in history, which is probably no bad thing after the last one
I'm sure someone is already calculating the diversion of what is currently just saving/spending into pension savings with the lifting of the lifetime maximum tax-free contributions.
I have a feeling there will be a lot of people caught out by thinking they will live forever and paying death duties.
You may well be right in terms of spend it while you can.
Less of the hyperbole. Wealthy people don't bother with pension funds as they just arne't attractive investment vehicles.
The driving force was doctors tend to retire earlier. Medical professionals are on final salary schemes, which have to be converted to cash equivalents for the purpose of tax. Given low gilt rates, annuities have fallen meaning pension funds need to be higher in value to achieve the same outcome. Doctors on salaries of £100k per annum have almost £30k per annum put into a pension fund by their employer. This quickly adds up and after 25 years paying into a fund, so when they are 50 or thereabouts, their pension fund is greater than the lifetime allowance. As any surplus payments are taxed at 55%, this means doctors would receive a tax charge £16.5k on the £30k contribution made by their employer. This tax has to be paid immediately, and as you can imagine many are not happy to have to pay this. Hence doctors leave the NHS and go private, or retire.