Reply to: October Budget is "going to be painful", Starmer warns

[KackAttack]

It's not a bad option, to be fair. It's currently 25% of the balance at the time of withdrawal, less any withdrawals monies already taken. Better to pay tax on a smaller withdrawal than on the whole thing...

A better option would be to put in a parliamentary Act just to exclude your own personal pension from any tax rises - think this can't be done? Well someone found a way.. check out the 2013 Act - "The Pensions Increase (Pension Scheme for Keir Starmer QC) Regulations"

https://www.legislation.gov.uk/uksi/.../contents/made

[malvolio]

Just been chatting with my neighbour who works in pensions. He says they are incredibly busy, with people grabbing their 25% tax free lump sum. He's been telling people that its very unlikely any change would happen before April 2025, but people are not listening to advice to wait and see and want to withdraw immediately!

It's not a bad option, to be fair. It's currently 25% of the balance at the time of withdrawal, less any withdrawals monies already taken. Better to pay tax on a smaller withdrawal than on the whole thing...

[escapeUK]

Just been chatting with my neighbour who works in pensions. He says they are incredibly busy, with people grabbing their 25% tax free lump sum. He's been telling people that its very unlikely any change would happen before April 2025, but people are not listening to advice to wait and see and want to withdraw immediately!

[malvolio]

Increasing tax on employment, what a brilliant plan to help the economy!

Well someone has to pay for an ever expanding civil service...

[willendure]

Increasing Employer NI is very likely to happen ...

Increasing tax on employment, what a brilliant plan to help the economy!

[mogga71]

Quite a few suggestions around that the cap could be reduced, and rumours of reduction to 20%.
Never mind that people have be planning retirement for years under current arrangements.

Even worse, if taking the lump sum was to trigger the reduced MPAA.

I think they will reduce the tax free lump sum amount .... however they will give some form of advanced warning .... eg. from next April you will only be able to take 200k or 100k tax free. Doing it immediately would cause carnage for those about to retire.

Increasing Employer NI is very likely to happen ... and of course is probably the most unfair tax for all those Contactors caught Inside. The while Inside argument by the Government is that you are a disguised employee and therefore not an employer .... but hey you need to pay the employer NI as somebody needs to ...and we are just about to increase it.

[Protagoras]

I hope it will be very difficult for Labour to removed this completely but they might well reduce the limit to say £100k. And of course we all know they think anyone with a couple of shillings in their back pocket is considered 'wealthy' and must be taxed to the brink of extinction.

Quite a few suggestions around that the cap could be reduced, and rumours of reduction to 20%.
Never mind that people have be planning retirement for years under current arrangements.

Even worse, if taking the lump sum was to trigger the reduced MPAA.

[ChimpMaster]

People I know are planning to take the 25% in the next month to mitigate that risk and also the risk that the limit is reduced.

The maximum tax free cash you can take across all your pension arrangements is £268,275.

It was of course quite a bit higher when the Lifetime Allowance was higher, for example £450,000 in 2012.

I hope it will be very difficult for Labour to removed this completely but they might well reduce the limit to say £100k. And of course we all know they think anyone with a couple of shillings in their back pocket is considered 'wealthy' and must be taxed to the brink of extinction.

[Protagoras]

There is no way they will have the balls to claim income tax on the 25% lump sum ... that would be a step too far.

People I know are planning to take the 25% in the next month to mitigate that risk and also the risk that the limit is reduced.

[vetran]

Wouldn't they have to up the minimum wage massively for no one to lose out by the removal of WTC (being replaced by UC)?

Remember, anything that's likely to make people who might vote Labour worse off, is much less likely to happen.

Probably but it needs doing.

[woody1]

They could remove the multi national company subsidy known as working tax credit and up the minimum wage.

Wouldn't they have to up the minimum wage massively for no one to lose out by the removal of WTC (being replaced by UC)?

Remember, anything that's likely to make people who might vote Labour worse off, is much less likely to happen.

[vetran]

That's the problem. A lot of taxes are circumventable either by "tax planning" or, as you say, simply leaving the country.

At least if they increased employment income tax/NI or VAT, they'd collect most of the projected revenue. Hike other taxes and there might be a substantial shortfall as people find ways of avoiding/mitigating them.

Indeed when they start squeezing they will find the fruit has gone!

They could remove the multi national company subsidy known as working tax credit and up the minimum wage.

[woody1]

The rich are mobile, they will leave until the tax changes.

That's the problem. A lot of taxes are circumventable either by "tax planning" or, as you say, simply leaving the country.

At least if they increased employment income tax/NI or VAT, they'd collect most of the projected revenue. Hike other taxes and there might be a substantial shortfall as people find ways of avoiding/mitigating them.

[vetran]

Yes but I bet the well-off minority (traditionally Tory voters) will be hit the hardest.

The rich are mobile, they will leave until the tax changes.

[NotAllThere]

Yes but I bet the well-off minority (traditionally Tory voters) will be hit the hardest.

It'll be the (Tory voting) poor country folk who'll be hardest hit. At least in the Home Counties.