Pension.

[lje]

I put in 2000 a month and I am also intending to put another 24000 in as a lump sum by the end of the tax year.

I do this to avoid the 40% tax bracket. Also, combined with my husband's salary and the fact that we don't have children I can happily live on the money under the tax bracket.

You should ask yourself how much you can afford to do without until you retire. If you've got a large pot of money put aside and have used your ISA allowance then think about putting a chunk into pension.

[moorfield]

With the scrapping of the annuity rules this week, pension rules are looking a lot more sensible, and will be easier to pass on to heirs.

[Fred Bloggs]

With the scrapping of the annuity rules this week, pension rules are looking a lot more sensible, and will be easier to pass on to heirs.

Correct, I have enough income due from a deferred final salary scheme to qualify for pulling as much money as possible out of my SIPP. It will be going from the SIPP in to ISAs for me and Mrs Bloggs. This is too good to be true, the gov't will do something to stop it, I'm sure.

[moorfield]

This is too good to be true, the gov't will do something to stop it, I'm sure.

You will be one of the lucky few!

A 55% tax on your pension leftovers before it is passed on. But at least it can now be passed on. Effectively the gov't are reckoning they can divert baby boomer cash from annuity providers into their own coffers over the next 20+ years. They are either playing a long and clever game or teeing it all up for the next labour gov't to fook it all up once more.

[Fred Bloggs]

You will be one of the lucky few!

A 55% tax on your pension leftovers before it is passed on. But at least it can now be passed on. Effectively the gov't are reckoning they can divert baby boomer cash from annuity providers into their own coffers over the next 20+ years. They are either playing a long and clever game or teeing it all up for the next labour gov't to fook it all up once more.

I fear you are right. This is going to be a one term Government and as sure as eggs are eggs, Red Ed will not want anyone keeping their own money under their own control. This will be a short lived reform, I fear I will not have enough time to strip all the SIPP money out and get it into ISA's before Labour are returned to power.

[centurian]

I fear you are right. This is going to be a one term Government and as sure as eggs are eggs, Red Ed will not want anyone keeping their own money under their own control. This will be a short lived reform, I fear I will not have enough time to strip all the SIPP money out and get it into ISA's before Labour are returned to power.

You're assuming of course that ISA's manage to survive the cull as well.

I can't help but wonder how much longer ISA's will be around for. How long will it be before we hear "It's not fair that the rich get to dodge tax by buying ISA's".

Someone investing the maximum ISA allowance since their creation in stocks and shares would have a 6 figure pot - and now be earning 6.5K per year (5% average growth) or 12K (8% growth) - all tax free.

[MarillionFan]

I was planning to up.

I've been doing it personally for a number of years, but with going back contracting I was planning to up it to 12k per year. Also going to add into the wifes as well.

Pensions are only one part of the
overall equation though.

[Boo]

How long will it be before we hear "It's not fair that the rich get to dodge tax by buying ISA's".

And is it fair ?

Boo

[tangent]

I have been putting the max into ISAs every year since they started and PEPs before that. Got just under 200k invested now. Are ISAs fair? Probably not. The tax advantages are very minor for basic rate tax payers. I think that a cap is likely to be introduced sooner or later.

SIPPs now look very worthwhile, but as many have said, how long before the rules change again?

[xoggoth]

Couple of things to check. As people live longer so rates from pensions get progressively lower. The last twenty years has seen rates halve and not sure it has bottomed yet. Also (unless it's changed in last 4 years) a pension in company name can be difficult to transfer to better annuity provider.