Will it affect many on an average income though? Genuine question.
A 1mil pension pot would be minimum 40k per year for 25 year. Seems fair enough to pay additional tax at some point on it.
COVID-19: Those earning above £19.5k should pay more tax after pandemic to help fix UK finances, says think-tank
- Thread starter CLENK88
- Start date
A 1mil pension pot would be minimum 40k per year for 25 year. Seems fair enough to pay additional tax at some point on it.
42
Striker
None whatsoever.
It only really impacts on those on 6 figure salaries.
Also due to the public sector pensions being more generous, it drags in jobs like doctors & head teachers. So you end up being punished for doing overtime which is completely shit after having to do loads during a health pandemic
So if you dont want to pay the extra tax, you get pushed into early retirement which you might not want to do.
Thought so. I suppose they can look at other investment options available to them. I wouldnt say they are being punished. A tax break on almost 1.1 million pension pot is a nice thing to have. 25% tax after that seems fair enough. It's still a saving on income tax.
Loads of people have worked through the pandemic and never have a chance of reaching such a pot.
Edinburgh Black Cat
Striker
Not necessarily. With compounding you could potentially achieve £1m with £10k/year contribution.
No I meant once you have 1 mil in a pot you effectively have a minimum of 40k a year pension return for 25 years. That's a good pension pot.
(1mil (pot) / 25 years = 40k). I guess there are better ways to do it surely to give you an even greater return than that.
If you're lucky enough to have a pot of 1.073 million then paying 25% on anything above that seems fair enough.
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safcforever
Striker
What about people who worked all the way through? Are they getting a tax relief
I agree.
there’s people living pay to pay and can’t afford to take a day off. These are the people that every penny counts. Taking that extra £20 or whatever off them is the difference between eating or heating their house
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Edinburgh Black Cat
Striker
Understood!
Aye, suppose of the £1m you'd get 25% tax free lump sum then you'd get your income tax personal allowance so you wouldn't get taxed on a good chunk of it anyway.
Binternet
Striker
The thing you have to remember about the pension tax is that it's not tax free going in either. There is a tax free annual allowance yes but when you go over that you get absolutely hammered by one of the most oppressive tax regimes about. It's based on total growth as well not just what you put in. So it's taxed to death going in and taxed to death coming out. The effective marginal tax rates are absolutely eye watering if you are not careful.
Also when the retirement age for my generation is likely to be in our 70s that means 50 years worth of contributions. Not that difficult to make it to TLA with compounding.
Also when the retirement age for my generation is likely to be in our 70s that means 50 years worth of contributions. Not that difficult to make it to TLA with compounding.
Taxed to death?? You get a 40k a year tax free allowance dont you? A lot of people dont have a salary of that never mind being able to throw that amount into a pension pot every year.
I honestly cant see the problem with a bit of tax on what are massive pension pots in comparison to the average earner.
Chalks
Winger
Because it’s not your pension pot being took away after making plans with it?
Binternet
Striker
No you don't get it, the 40k includes compound growth. Go over that (incredibly easy to do with your contribution, employers contribution and compound growth) and your looking at absolutely eye watering marginal tax rates well above 50%. It's a broken system.
You are still adding 40k per year tax free to your pot. That's a nice pension pot to have.
42
Striker
It's not tax free, it's under the same income tax rules as your salary.
You'll get 1st £12.5k a year tax free then pay 20% on next £38k then 40% thereafter.
Hank Scorpio
Striker
DB or DC?
pixie345
Midfield
How much of the NHS staff's rise of 3.50 per week will this tax claim ? The ''unskilled'' (Priti Patels quote) workers earning under 25k includes some NHS staff.
Tax the media owners who support the Tories and other tax evading companies as already mentioned. They account for a good few more billion more than benefit fraudsters.
Tax the media owners who support the Tories and other tax evading companies as already mentioned. They account for a good few more billion more than benefit fraudsters.
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Ciro_DiMarzio
Winger
It is but too many MPs are involved in big companies for that to ever happen.
I think Priti Patel should be classing herself as unskilled really. Not seen her offer anything to suggest otherwise.
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Binternet
Striker
NHS 2015 which I think is DB type scheme.
The thing I forgot to mention is it's the tapered annual allowance which is the killer as your 40k isn't really 40k when they have finished with it.
MPs must have the highest pay of any unskilled worker. To become an MP you need no specific skills or qualifications yet it commands a salary of 80k a year.
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There will be a lot of backbench MPs who do very little for that £80k, other than deliver votes for the government
