Autumn Budget

Thank you d3000, hope all is well with you and your loved ones too.

 

State pensions are based on NI contributions. The more yrs you pay in the more you'll get. With the max attained at 30yrs (35 on the new scheme) . Ni contributions begin at circa 9kpa (12%). before personal allowances take effect as in tax.
My personal view is They should be paid on all earnings after that amount and not reduced. Which is the case now. Only 2% contributions over £960+pw. May I also add. I'd keep contributions going after retirement age (66 at mo) If still working.

 

Technically yes but my point is we all pay in and are only take out a pension. I class a benefit is something you get when you do not put in. Perhaps they should change the terminology.

The state pension is a benefit payment available to the majority of people when they reach the current State Pension age. It is a universal, non-means tested benefit available to all, so long as they have made the requisite National Insurance contributions or credits.

 

Yer pay tax earning yer private pension and then tax when you get it every month !!!

 

I'm in a draw down pension. Which has several benefits. (Other than my fund is susceptible to the stock market. But tbf my financial advisor has worked well during the good and bad times)
With draw down. When I die all the fund passes to the mrs Tax free. If we both die before 75 all the fund passes to my beneficiaries. Tax free. Taxable if either of us die after.

I'm aware of a couple of folk actually contributing massive amounts of their wages to their pensions. Towards the end of their careers. For example. 20k but only paying 16k in real terms due to 20% tax relief. (Can do this up to £40k) and living off savings to top up the rest of their income.
As for paying tax when retired . It's only taxable beyond the personal allowance. But if for example you have £100k in your pension pot. 25% is tax free. To withdraw at any time. Thus you can't lose. 5k better off at least.
Based on the above.
£16k pa x 5yrs = £100k invested with 20% tax relief.
£100k x 25% = £25k tax free which you can withdraw at any time.
Even if you pay tax on the rest.( barring taking it all in one yr and falling into the 40% bracket.) Over 10 yrs for example. £7.5kpa.
First circa 3k would come tax free within your personal allowance including state pension.
4.5k x 20% = £ 900
£900 x10 yrs =£9k
So for an investment of 80k. Based on the figures above a return of £91k.
If the £75k was withdrawn over 25yrs at £3k pa.
No tax to pay at all.

(Barring again, stock market influences. Which through experience tend to recover over time and tend to return more than inflation.)
Touch wood even with financial advisers charges this has worked well for me.
But it's not for everyone. Some are tied into final salary and annuity schemes. And feel safer, I get that.
Drawdown is relatively new.
Btw I'm not a financial advisor. but have attended many road shows and found this scheme suits me.

 

Some years ago my uncle despite having a medical condition worked full time.
He heard that the rule regarding 'Sick-pay' was to be revised and it would become means tested. He realised that because he got an occupational pension from a previous job he would not get 'Sick-pay' if he went 'on the sick' in the future. So he immediately went on 'Sick-pay' before the ruling changed and from that day to this he gets both Ocupational Pension and 'Sick-pay.'
I think the legal position is that if a Government revises the rules and State Pension became means-tested they could not impose that ruling retrospectively on people who were already in receipt of the State Pension - regardless of their income.

 

Don't make me post this again to get some laughs..

 

It doesn't work like that. You're only taxed once, and it happens when you start receiving a monthly pension. While you're working and building up your pension pot, your pension contributions are non-taxable (unless they exceed some fairly high limits, which for most of us are too high to matter).

 

I didn't realise that cheers.

 

Hunt isn't a popular MP.

 

I will be more precise then and have him in the top 3-5 I hate the most.

 

Best thing about the pain to come is that it's been framed as all been caused by Liz Truss, and people actually believe it. Sunak, the one that caused the mess we're in as chancellor, gets a promotion and then tell us we have to pay. Print money hand over fist, like we did in COVID, and you get inflation. We're going to be paying for our COVID silliness for decades. He created a big black hole that he knew would pretty much bankrupt us. Criminal.

 

The thing many people ignore is that the State Pension is based on number of years and not how much you pay in NI contributions. For example, some women took a break from employment for a number of years for various reasons like having kids. This meant many did not have sufficient years to get the full State Pension. Some schemes had 'opt outs' from State pension diverting some funds to the occupational Pension Pot . There was an opportunity to 'buy' lost years (up to 6) but the Govt changed that to the last two years a few years ago) .
So since it is based on number of years and not the amount of NI paid in those years you have a situation where someone earning, for example, £3-40k pays hundreds every month in NI contributions whilst some on low wages pay the basic minimum. If the higher earner e.g. professional woman has time off and is short of years they get a reduced pension whilst the low earner has the full years (but less net NI payments) so still gets a full State pension. Changing the 'top up' rules from 6 to 2 prevented some people from making up the shortfall. Whilst most people on higher earnings are likeley to have other post retirement revenue, it does not eliminate the fact that the State Pension input/return ratio is weighted in favour of the poorer in society. As stated though, the UK Peenion is very low compared to many countries. As regards 'wealthy' pensioners I wonder if the poster would feel the same if he retired with just the basic State pension to survive on, never mind a reduced State pension?

Regarding tax bands..... Italy tax is higher IVA (VAT) 22%
€0 — €15,000 23%
€15,000 — €28,000 27%
€28,000 — €55,000 38%
€55,000 — €75,000 41%
over €75,000 43%

On top of that there is a regional tax added on. There is NO personal allowance although a tax pree zone applies (starts around 7000 for those on less than 8k p.a). but gradually reduces to the point where it is removed altogether. e.g. 50k upwards you pay tax from the first euro you earn!!
There are no 'rates' though if you own just the one house.

 

And the really bonkers thing is.......they'll get back in at the next election.
If things are looking rough in the run up they'll bring Boris back as the returning hero and your average plank in the street will vote for him.