oh dear (tm): Millions face 'retirement crisis' over pensions tax raid

[AtW]

"Millions of middle-class workers will face a "retirement crisis" if George Osborne pushes ahead with a multi-billion pound raid on pensions, a new analysis has found.

The Chancellor is considering plans to end more generous rebates for higher rate taxpayers on pension contributions and replace them with a flat rate of relief which could be as low as 20 per cent.

An analysis by Hymans Robertson, one of Britain's biggest pension consultancies, found that two thirds of higher rate taxpayers - equivalent to 3.2 million people - are currently not saving enough for their retirement. (AtW's comment - yes, that's because they are fooking TAXED too much and lost pretty essential things like child credits, something that encouraged future taxpayers from HIGH TAXPAYER families - I'd say more likely to become also high rate taxpayers)

It said that a decision to scrap higher rate tax relief on pension contributions would "penalise" middle class savers even further and discourage them from putting aside sufficient money for their retirement.

Conservative MPs have warned Mr Osborne that he will face a "riot" if he pushes ahead with the plans with a significant backlash from Tory voters.

Chris Noon, a partner at Hymans Robertson, said: "George Osborne would be short sighted if he pushed ahead with this. It would penalise savers, the very people the Conservatives are supposed to represent.

Under official measures, the majority of higher rate taxpayers are considered to have an "inadequate" level of savings if their income in their retirement is less than half the salary they enjoyed when they were working.

It found that 69 per cent of those paying the 40p rate of tax are unlikely to have enough income when they retire. Basic rate taxpayers are also struggling to save enough for their retirement, with 62 per cent failing to put enough aside.

By contrast 39 per cent of additional rate taxpayers - those paying the highest level of tax - will have "inadequate" levels of savings while the figure for those paying no income tax is less than 10 per cent. "

Source: Millions face 'retirement crisis' over pensions tax raid - Telegraph

So there you have it - the very people who actually keep the ponzi scheme of pensions alive now will not have enough income to retire themselves.

[ShandyDrinker]

An analysis by Hymans Robertson, one of Britain's biggest pension consultancies, found that two thirds of higher rate taxpayers - equivalent to 3.2 million people - are currently not saving enough for their retirement. (AtW's comment - yes, that's because they are fooking TAXED too much and lost pretty essential things like child credits, something that encouraged future taxpayers from HIGH TAXPAYER families - I'd say more likely to become also high rate taxpayers)

AtW's comment is spot on.

Gideon is a genius. He and his Tory chums are doing their very best to shaft many of the very people they expect to vote for them - the middle classes are seen as an easy target.

[jamesbrown]

AtW's comment is spot on.

Gideon is a genius. He and his Tory chums are doing their very best to shaft many of the very people they expect to vote for them - the middle classes are seen as an easy target.

Gidiot is safe in the knowledge that there's no effective opposition. In the highly unlikely event that Labour return to mainstream politics in the foreseeable future, Gidiot will be back in his box. In other words, we're fecked.

[DimPrawn]

Gidiot, or Komrade Korbyn, or (fook knows who the Lib Dem leader is)....

LibLabCon? No thanks, I will vote for something different. We've had 50 years of LibLabCon, we know there's no democracy or choice in those.

You can all laugh and vote for LibLabCon, then be outraged for another 5 years as everything stays the same or gets worse.

[BrilloPad]

Vote UKIP! Though we did last time. 12% of the votes. So how are their 80 seats working out then?

Soon there will only be rich and poor. Middle classes are being stuffed.

We can call them "home owners" and "non home owners".

[centurian]

I reckon Osbourne will flounce - and won't do anything radical.

If one genuinely believes the current system is "unfair", then by all means, rip it up completely and replace it with something that you do think is "fair".

The problem is - if it's done "correctly" (i.e. applies to everyone) then there will be a lot of people on 40/45K pa who will get hit hard by this - not just a few hundred quid either - those on defined benefit schemes (i.e. public sector) could get utterly hammered.

But then, those are the people "claiming" a disproportionate amount of the "relief" already, so surely it's only "fair" that these folks get hit the hardest - especially as the purpose is to save the treasury money.

If he had the slightest backbone, he would say "I think this is the right approach - sorry if you're affected, but I believe this is a change that needs to happen and I'm going to follow it through"

But he doesn't have the balls to do that. He'll try and fudge it - to protect that core block of voters and shield them from the changes.

Once the number crunchers work out that once you've excluded such a big block - it doesn't really save that much money - combined with the heat he will get from the Daily Mail / Telegraph for shielding public sector workers (including himself) from the pain, I think he might draw back from the radical approach.

My best guess at this point. Cut the 40K allowance to 20K - possibly with an increase in the carry forward allowance so that someone in the public sector that gets a big pay rise in one year (which means a big injection into their pension fund), doesn't get a tax bill for twice as much as their pay rise.

But... I still wouldn't rule out one humongous fudge attempt.

[centurian]

An analysis by Hymans Robertson, one of Britain's biggest pension consultancies, found that [b]two thirds of higher rate taxpayers - equivalent to 3.2 million people - are currently not saving enough for their retirement

When you look into the detail, you see that "not enough" means <50% of your pre-retirement income.

So take an average figure of 125K for a half-decent contractor.

That means I would "need" 62.5K pa to be considered "enough".

Bollards. I could very comfortably live on half that.

But I won't let the facts get in the way of a good story They can bash George all they like.

[AtW]

When you look into the detail, you see that "not enough" means <50% of your pre-retirement income.
So take an average figure of 125K for a half-decent contractor.
That means I would "need" 62.5K pa to be considered "enough".
Bollards. I could very comfortably live on half that.
But I won't let the facts get in the way of a good story They can bash George all they like.

Yeah, but the problem is that unless you retire like very soon, in the future there won't be enough money to pay you that 50% of your big pot, there will be new pension pot robberies and they'll start from you because that would be fair (tm).

45% income tax rate + 13.8% "employer" NICs (uncaped) + 2% (uncapped) employee NICs = 60.8% fooking cut of the Govt, would have been more honest to just introduce 60% tax rate.

What kind of taxes will have to pay your children to sustain your imaginary pension pot - 80%? I am not sure even that would be enough

P.S. The contractor in your example will probably have salary of £10k + dividends, so he'd get £5k pension cuz that would only be fair...

P.P.S. I don't have any pension other than whatever state will offer - unless you are very close to retirement (few years at the most) it's insane to lock your money away, maybe that's a good thing from his tax raid - people will realism that it's all a con and will stop funding pensions - maybe, just maybe after that Gidiots buddies from the City will tear him a new one...

[AtW]

IHe'll try and fudge it - to protect that core block of voters and shield them from the changes.

His core block of voters have inherited wealth in the tens of millions, safely hidden in Bermuda's of this world - they are not worried about their pensions.

[MarillionFan]

Yeah, but the problem is that unless you retire like very soon, in the future there won't be enough money to pay you that 50% of your big pot, there will be new pension pot robberies and they'll start from you because that would be fair (tm).

45% income tax rate + 13.8% "employer" NICs (uncaped) + 2% (uncapped) employee NICs = 60.8% fooking cut of the Govt, would have been more honest to just introduce 60% tax rate.

What kind of taxes will have to pay your children to sustain your imaginary pension pot - 80%? I am not sure even that would be enough

P.S. The contractor in your example will probably have salary of £10k + dividends, so he'd get £5k pension cuz that would only be fair...

P.P.S. I don't have any pension other than whatever state will offer - unless you are very close to retirement (few years at the most) it's insane to lock your money away, maybe that's a good thing from his tax raid - people will realism that it's all a con and will stop funding pensions - maybe, just maybe after that Gidiots buddies from the City will tear him a new one...

And that 60.8% is a fricking joke.

Having already paid a shed load of income tax and being in the high rate, I have accrued a load of stocks and options having sacraficed my personal time (60 hours a week). This extra income is taxed at 60.8% excluding a currency and
Transaction fee from the U.S.

38p in the Pound. How the fook is that fair?