Possible pension changes in the budget

[handyandy]

The likely changes to employers contributions is something I've been following in news/online articles etc. (taking a keen interest as it would affect me!!)

Some reports/rumours suggest that any changes to make employers contributions less attractive could take affect from budget day - to prevent people suddenly decided to top lots of cash into their pension pots before April 5th.

So anyone intent on topping up may want to get a shift on.

Interestingly that is exactly the same advice (or guidance) I keep getting from various wealth management companies, IFA's and even non-advisory brokers (like Hargreaves Lansdown or Fidelity).

[Danglekt]

seems mental that they would go after pensions

We are all living longer, getting more associated health and social issues which need paid for - government dont want to cough up for it, so they decide it's a good time to make it less attractive to save up your own way of paying for this stuff when your not working anymore?

Genius.

Next they will announce that people can draw their pension pots as a lump sum and blow it on what they like....... oh.

[WordIsBond]

Interestingly that is exactly the same advice (or guidance) I keep getting from various wealth management companies, IFA's and even non-advisory brokers (like Hargreaves Lansdown or Fidelity).

Yeah. Just remember they have a vested interest in getting you to invest as much as money as they can (and start paying them fees as soon as possible).

We're in speculation territory here. No one except our beloved Chancer (that is the word I want, isn't it?) of the Exchequer knows what is going to happen. These people are all pushing the narrative that will encourage you to take actions which benefit them. That does not mean they are wrong, or even dishonest.

My view is that any change to tax relief on employer pension contributions is going to be a little bit complicated to implement. It may necessitate changes to payroll software, including their own Basic PAYE tools. It comes not long after they've forced Pension AE on employers, brought in their new apprentice tax, etc, etc. I do not think it is going to be done overnight. Big business will scream, because it not only costs employees, it will hit employers with yet another level of complication in their payroll, and to do it instantaneously will be intolerable.

We may see immediate changes to tax relief on personal contributions, but I doubt we see immediate changes to employer contributions. That would, I think, require one of two things. Either they have to give payroll software providers time to respond, or they have to throw everyone in the higher tax band whose company makes pension contributions into self-assessment to recover the tax. That would be very costly.

Unless you are staying within the basic rate band, it is unlikely to be harmful from a tax perspective to bring pension contributions forward to before the budget. If you were going to do it in late March or April anyway, why not before the budget, to be sure? But if someone wasn't going to make contributions, and cash flow or other reasons make it awkward to do so, I wouldn't be one to try to stampede people into acting now.

[Fred Bloggs]

seems mental that they would go after pensions

We are all living longer, getting more associated health and social issues which need paid for - government dont want to cough up for it, so they decide it's a good time to make it less attractive to save up your own way of paying for this stuff when your not working anymore?

Genius.

Next they will announce that people can draw their pension pots as a lump sum and blow it on what they like....... oh.

Unfortunately, the government's inability to live within it's revenue, means that everything is sacrificed to raise revenue. Sensible or not, it doesn't seem to matter any more.

[SueEllen]

Unfortunately, the government's inability to live within it's revenue, means that everything is sacrificed to raise revenue. Sensible or not, it doesn't seem to matter any more.

What government has lived within their revenue?

Governments don't.

[Fred Bloggs]

What government has lived within their revenue?

Governments don't.

You are, ofcourse, generally, quite correct. However since the economy was effectively bankrupted by Mr Brown, things have been much worse. It isn't impossible for governments to run a surplus and balance the budget across an economic cycle. It does however, require a much tighter control on policy than we have had for most ofthe post war period.