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Lifetime pension allowance to be boosted in budget
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
If it is so, I am delighted by this change. Age 50, I can now save much more and aim to retire at 57 (theoretically at 55, but still unsure how that cliff edge change will work).
It's certainly not going to be tempting me to work longer. Quite the opposite! And in my selfish interest to see a Conservative govt prevail at next GE for another full term, lest Labour change the rules again.
It's certainly not going to be tempting me to work longer. Quite the opposite! And in my selfish interest to see a Conservative govt prevail at next GE for another full term, lest Labour change the rules again.
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
Do the Treasury leak these things deliberately to see what the public reaction is, so they can cancel the idea if necessary or is it just very sloppy security?
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- Lemon Half
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Re: Lifetime pension allowance to be boosted in budget
moorfield wrote:If it is so, I am delighted by this change. Age 50, I can now save much more and aim to retire at 57 (theoretically at 55, but still unsure how that cliff edge change will work).
It's certainly not going to be tempting me to work longer. Quite the opposite! And in my selfish interest to see a Conservative govt prevail at next GE for another full term, lest Labour change the rules again.
It would be just as likely for a new Conservative government to cut it again if it got a new term; after all under the last Labour government the LTA was £1.8 million and the Annual Allowance was £255,000 - it was the subsequent Coalition and Conservative governments which slashed them.
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- 2 Lemon pips
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Re: Lifetime pension allowance to be boosted in budget
Very interesting.
I am currently working full time - but beginning to act on my plan to go part time and retiring next year early 60s - primarily driven by the looming LTA if I kept at it full time but also having finally caught up on annual allowance carry forward.
I will be listening intently tomorrow. My preference would be to boost the pot a little more before stopping. Full time until April 24 with all earnings above HRT (about 60%) going into the pot would be perfect - possibly with a final 3-6 months to relax into it.
So in terms of policy - its not enough to tempt me into work much longer but will shift my view a little. So good for GDP but not so much for tax receipts
I am currently working full time - but beginning to act on my plan to go part time and retiring next year early 60s - primarily driven by the looming LTA if I kept at it full time but also having finally caught up on annual allowance carry forward.
I will be listening intently tomorrow. My preference would be to boost the pot a little more before stopping. Full time until April 24 with all earnings above HRT (about 60%) going into the pot would be perfect - possibly with a final 3-6 months to relax into it.
So in terms of policy - its not enough to tempt me into work much longer but will shift my view a little. So good for GDP but not so much for tax receipts
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
mark88man wrote:So in terms of policy - its not enough to tempt me into work much longer but will shift my view a little. So good for GDP but not so much for tax receipts
Not sure that is the case. If high earners carry on working that means more tax receipts, economic output and employment. So lower LTA tax but quite possibly more than balanced by other taxes etc?
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- 2 Lemon pips
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Re: Lifetime pension allowance to be boosted in budget
From a tax POV: no extra as I will use the proposed/alleged higher limits to place more within the pension.
From a GDP POV: yes I will deliver an extra half year of effort for my work which cumulatively may have some economic benefit
From a GDP POV: yes I will deliver an extra half year of effort for my work which cumulatively may have some economic benefit
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- Lemon Pip
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Re: Lifetime pension allowance to be boosted in budget
Given that governments clearly like to tinker with pension rules... i'm quite sure the LTA will be coming back down again at some point before people reach retirement age.
As it is many people will now be missing out on growth for the years they stopped contributing to their pensions for fear of breaching the LTA.
As it is many people will now be missing out on growth for the years they stopped contributing to their pensions for fear of breaching the LTA.
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
dingdong wrote:Given that governments clearly like to tinker with pension rules... i'm quite sure the LTA will be coming back down again at some point before people reach retirement age.
As it is many people will now be missing out on growth for the years they stopped contributing to their pensions for fear of breaching the LTA.
I'm sure you are right.
Taxing investment outcome in a pension makes little or no sense. Capping lifetime pension contribution makes more sense in order to set a ceiling on maximum tax avoided on money on the way into pensions. I doubt the idiots in charge will address this stupidity but there you go.
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- Lemon Half
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Re: Lifetime pension allowance to be boosted in budget
I heard a comment that about a third of those affected by the LTA work for the NHS, so a lot of senior consultants we can ill afford to lose, and a throwaway observation from a BMA rep that [an alarmingly large percentage] of GPS are intending to retire for the same reason.
Considering the years required to train senior medical staff, clearly something had to be done, I guess this is it.
And yes, it was the Conservatives wot cut the limit previously.
V8
Considering the years required to train senior medical staff, clearly something had to be done, I guess this is it.
And yes, it was the Conservatives wot cut the limit previously.
V8
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- 2 Lemon pips
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Re: Lifetime pension allowance to be boosted in budget
BullDog wrote:Taxing investment outcome in a pension makes little or no sense. Capping lifetime pension contribution makes more sense in order to set a ceiling on maximum tax avoided on money on the way into pensions. I doubt the idiots in charge will address this stupidity but there you go.
There's no real need for a contribution limit either. If you cap the amount of the tax free lump sum and make SIPPs part of a deceased's estate then it doesn't affect the overall tax take much if you allow people to put as much as they like in.
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- 2 Lemon pips
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Re: Lifetime pension allowance to be boosted in budget
FYI from Moneyweek.
"The lifetime pensions allowance is also expected to go up, allowing saver to accumulate up to £1.8 million over a lifetime into pension savings - up from £1.07."
I had thought the current LTA was rather more than £1.07 - no wonder people feel limited
"The lifetime pensions allowance is also expected to go up, allowing saver to accumulate up to £1.8 million over a lifetime into pension savings - up from £1.07."
I had thought the current LTA was rather more than £1.07 - no wonder people feel limited
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- Lemon Half
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Re: Lifetime pension allowance to be boosted in budget
Lifetime Allowance abolished. Well that's (thankfully) the end of one source of queries on this board.
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
Annual allowance to 60k
Interesting to hear about tax reliefs etc and the MPAA.
Interesting to hear about tax reliefs etc and the MPAA.
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- Lemon Half
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Re: Lifetime pension allowance to be boosted in budget
mc2fool wrote:Lifetime Allowance abolished. Well that's (thankfully) the end of one source of queries on this board.
I guess that'll save the pension cos a whole lot of admin overhead as well.
Scott.
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- The full Lemon
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Re: Lifetime pension allowance to be boosted in budget
BullDog wrote:dingdong wrote:Given that governments clearly like to tinker with pension rules... i'm quite sure the LTA will be coming back down again at some point before people reach retirement age.
As it is many people will now be missing out on growth for the years they stopped contributing to their pensions for fear of breaching the LTA.
I'm sure you are right.
Taxing investment outcome in a pension makes little or no sense. Capping lifetime pension contribution makes more sense in order to set a ceiling on maximum tax avoided on money on the way into pensions. I doubt the idiots in charge will address this stupidity but there you go.
Hopefully you will be pleasantly surprised at the budget proposals then.
Dod
Re: Lifetime pension allowance to be boosted in budget
So the guidance for people nearing LTA to retire and crystalise is no longer of any use. So, more "when you're ready" and then use ufpls for withdrawals.
But
I think this puts the TFLS in the cross hairs for future budgets.
But
I think this puts the TFLS in the cross hairs for future budgets.
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- Lemon Pip
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Re: Lifetime pension allowance to be boosted in budget
The other impact is that huge sums of money that would have been spent in the economy this year will now be transferred into pensions instead.
I’m not sure that will do much for UK growth (although it may help bring inflation down)
I’m not sure that will do much for UK growth (although it may help bring inflation down)
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
Dod101 wrote:BullDog wrote:dingdong wrote:Given that governments clearly like to tinker with pension rules... i'm quite sure the LTA will be coming back down again at some point before people reach retirement age.
As it is many people will now be missing out on growth for the years they stopped contributing to their pensions for fear of breaching the LTA.
I'm sure you are right.
Taxing investment outcome in a pension makes little or no sense. Capping lifetime pension contribution makes more sense in order to set a ceiling on maximum tax avoided on money on the way into pensions. I doubt the idiots in charge will address this stupidity but there you go.
Hopefully you will be pleasantly surprised at the budget proposals then.
Dod
Doesn't affect me one way or the other. But makes perfect sense. That is until the next half wit reduces it again. As will surely happen.
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
Oh dear. LPA gone. Maybe I should be annoyed as I took out enhanced protection 17 years ago so that the LPA didn't apply but it meant I then could not make any more contributions to my pension from then on. So for 17 years I made no pension contributions and now I find I could have
Still, never mind. It's a sensible move because now it will be difficult for Labour to reintroduce the LPA without having a new Enhanced Protection, whereas if he had simply increased it, it can then be subsequently reduced again.
Still, never mind. It's a sensible move because now it will be difficult for Labour to reintroduce the LPA without having a new Enhanced Protection, whereas if he had simply increased it, it can then be subsequently reduced again.
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- Lemon Quarter
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Re: Lifetime pension allowance to be boosted in budget
BigTim wrote:So the guidance for people nearing LTA to retire and crystalise is no longer of any use. So, more "when you're ready" and then use ufpls for withdrawals.
But
I think this puts the TFLS in the cross hairs for future budgets.
The "TF" bit of that acronym was already changed, it's the PCLS now. Yes I always fear it may be tinkered with in future.
I've changed my mind actually on contributing even more. My retirement plans have for a long time been predicated upon drawing an (UFPLS) income at/above the higher rate threshold - ie. dividend income from underlying portfolio - over 20+ years from age 57, with the underlying capital left for later life. So somewhere between £50,270 and £67,026 pa. The thresholds will move eventually but today's announcement doesn't really change that plan for me, and my portfolio is already on track to do that without further contributions.
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