Reply to: Pension alert: use up your allowance before next Monday (29/10)

[cojak]

No changes from what I see, except:

4.5 Pensions and savings tax
Lifetime allowance for pensions – The lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1,055,000.

Yep, that surprised me as well.

[northernladuk]

No changes from what I see, except:

4.5 Pensions and savings tax
Lifetime allowance for pensions – The lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1,055,000.

So there is a change then?

[Syd]

No changes from what I see, except:

4.5 Pensions and savings tax
Lifetime allowance for pensions – The lifetime allowance for pension savings will increase in line with CPI for 2019-20, rising to £1,055,000.

[chopper]

If Hammond raided pensions in this way, at least it would shush those moaning about Gordon Brown's pensions raid.

I suspect our pensions will stay as they are, more likely is annual pension allowances will be reduced in favour of increased LISA allowances. We saw how irate people got over 'pasty tax' or a tax on static caravans, or the self employed NICs he tried to change - he isn't going to get away with double dipping pensions with such a weak government, especially with a half decent chance of another General Election before April anyway. It isn't going to be a budget with nasty shocks on the way.

[Maslins]

That's what the Lifetime ISA is, I thought

Basically yeah...though I think you're currently limited to just £4k/year with £1k from HMRC. Far lower/worse than the £40k you can put into a pension, potentially getting 40 or 45% personal tax relief.

So it's a crap pension but with the benefit you can take funds out early to help buy your first home.

Personally, drives me nuts...more just cos it's another option, where you need to carefully check the rules, consider the risks/drawbacks etc. So fed up of extra things being introduced into an already ridiculously complicated system. No wonder take up has been fairly poor, but still, some people have got into it, so if any future government want to abolish it to simplify things they'd need to figure out what to do with those who have already invested.

[PerfectStorm]

Seeing as they have ISAs for all sorts these days, why not a pension ISA where they get their tax up front?

That's what the Lifetime ISA is, I thought

[Hobosapien]

Seeing as they have ISAs for all sorts these days, why not a pension ISA where they get their tax up front?

[Maslins]

I think there is a general drift in encouragement away from pensions and towards ISAs. Both give tax relief on increases in value within the wrapper...but pensions give significant tax relief now, in anticipation of some tax receipts far later when you withdraw it. Therefore with the current desire for short term fixes at the expense of long term gains, and poor country coffers, expect the powers that be to continue to hamper pensions whilst pushing you to ISAs.

[Hobosapien]

They need to encourage people to save via pensions to reduce reliance on the state pension (eventually it will be means tested so all those with decent personal pensions get nowt from the state ) and OAP benefits. So likely any changes will only affect 'the rich', so as long as you've got your contract income managed appropriately you should be able to limit most of the pain.

If they really wanted to upset the apple cart they'd bring in a law to change all private pensions into state pension. Stealing the pension pots legitimately.

So it may be wise to explore other long term investment options such as stocks/shares ISA where you can invest money using similar funds to those available via pensions (e.g. cheap index trackers or Vanguard Lifestrategy self balancing funds). Yes you pay tax on the way in but not on the way out so more predictable than current pension option of not paying tax on way in but paying an unpredictable amount of tax on the way out. Using both approaches is safest way of spreading risk.

[AtW]

But you just can’t be too sure about anything these days.

The only thing we can be sure about is that the deal is going to get worse all the time...

[Lance]

But you just can’t be too sure about anything these days.

Correct. But he'd be insane to drop a pension tax relief at midnight on budget day.
I think that this will be in the budget but not in effect till at least April 2019, or maybe even later.

[cojak]

Excise duty on fuel, booze and tobacco goes up at midnight on budget day

Unlikely he does the same for pensions, it would add insult to injury - assuming he even tries

But you just can’t be too sure about anything these days.

[AtW]

The chancellor doesn't announce same-day laws during the Budget - you normally have at least a Queen's Speech or two to go before anything comes into force...

Excise duty on fuel, booze and tobacco goes up at midnight on budget day

Unlikely he does the same for pensions, it would add insult to injury - assuming he even tries

[pr1]

Yes, I did mean tax year.

is this a tax year that ends next Monday (29/10)?

[cojak]

True but the changes could come in in April 2019 so Cojack's suggestion of bringing in your contributions into this year (I read that as tax year) is still a good one

Yes, I did mean tax year.