UK State Pension

stonerblue said:
These private pensions some of you have; did they not tell you you'd be over the threshold for tax/state benefits when they sold them to you?
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I look at people with big pensions as being lucky and I don't envy them at all, maybe they deserve them. What is annoying though is that if you are fortunate enough to be fortunate you punch down.
 
blueish swede said:
Doesn't it depend how you take it out? I can decide how much I want from my pension. I can take a lot over a short period or less spread over more years.
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The gap between the full state pension and the frozen tax threshold is little more than £1,000 now and threatens to make the state pension alone taxable in a few years.
 
stonerblue said:
These private pensions some of you have; did they not tell you you'd be over the threshold for tax/state benefits when they sold them to you?
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Slight aside: One of the reasons higher-ups have left the armed forces in the 2000's+ is that they couldn't opt out of taking their pension in their wage, this pushed them over their lifetime allowance, forcing them to pay tax on it - ie a sort of double tax on their pension, even though they were miles away from pension age.
A similar issue happened with higher-up medical staff, they also weren't able to opt out of their pension contributions, the tax bills (related to lifetime allowance) I've heard of, are staggering. Forced many docs to not do overtime/leave, as it was literally costing them money to work.
The drain/loss in the top echelons of the NHS/Armed forces is/was really bad.
 
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JASR said:
A similar issue happened with higher-up medical staff, they also weren't able to opt out of their pension contributions, the tax bills (related to AA) I've heard of, are staggering. Forced many docs to not do overtime/leave, as it was literally costing them money to work.
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Yes, my brother-in-law, a cardiologist, was caught in that trap. Now he just does part-time assessments and no surgery.
 
Blue Maverick said:
I get the raising the income tax higher but then you end up taxing the private pensions, therefore reducing your pension yet again! Could there be a lower tax for pensions but a higher one for people working?
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Sorry mate but whilst I agree that the state pension should always be tax free, sums of money paid from private pensions shouldn't, the money has been taken before tax and grown in a tax free environment if in a DC scheme or have been topped up significantly and guaranteed by the government if its a DB scheme.
 
Scottyboi said:
Might end up forcing a culture change where more elderly end up living with family, it's already happening with children having to live with their parents well into their 20s or 30s. It's not looking good though, I put 10% in my work pension but I doubt it will be anywhere near what I'll actually require when I'm a foc.
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The elderly living with family is very difficult these days, particularly if the elderly person has dementia. In most families both of the married couple have to work. If one gives up work to be with the elderly person, because they need care, then that's one less tax payer.
 
stonerblue said:
These private pensions some of you have; did they not tell you you'd be over the threshold for tax/state benefits when they sold them to you?
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Surely we all know that state pension is not tax free.
It simply uses up nearly all of our Tax Code allowances so we have to pay tax on virtually all additional pension income like having two jobs.
 
Blue Maverick said:
My mate is same age as me, he’s a plasterer, used to spend all his cash on clothes living a good life, bought a house ended up having kids, didn’t get married, the mother fucked off it was when the crash was, he couldn’t pay her off had to sell his house, blew £100k over the next few years. He’s now in social housing £800 a month rent, which he can afford easily, however he has zero pension, he’s got 11 years until state pension, I pointed out his state pension won’t even cover his bills, he just shrugged, he’s no idea what he’s going to do.
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There are so many people who really don't think about future financial provision and expect the state to pick up the bill. Not saying this us your mate BTW.

The biggest bugbear I have about pensions is those lazy sods who have made it a life style choice to not work, produce kids without thought, pay sweet FA into the NI fund and yet still get a full new state pension. Whilst many folks who work, but may have missed a few years contributions don't get the full amount.
 
it's important to remember that when you're complaining about taxation on private pensions, that those opensions have been formed from pre-tax pay. The ferryman has to be paid at some point, you should take the win that it's been deferred for many years
 
JASR said:
Slight aside: One of the reasons higher-ups have left the armed forces in the 2000's+ is that they couldn't opt out of taking their pension in their wage, this pushed them over their annual allowance, forcing them to pay tax on it - ie a sort of double tax on their pension, even though they were miles away from pension age.
A similar issue happened with higher-up medical staff, they also weren't able to opt out of their pension contributions, the tax bills (related to AA) I've heard of, are staggering. Forced many docs to not do overtime/leave, as it was literally costing them money to work.
The drain/loss in the top echelons of the NHS/Armed forces is/was really bad.
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I just dont get this, the benefit does diminish with increasing salary but it doesn't cost them money. Tapered annual allowance relief only kicks in at above £240k per yr. There is only one role that pays above £240k which is the Chief of the Defence Staff. The First Sea Lord gets just over £200k.
 
Kompany Car said:
I just dont get this, the benefit does diminish with increasing salary but it doesn't cost them money. Tapered annual allowance relief only kicks in at above £240k per yr. There is only one role that pays above £240k which is the Chief of the Defence Staff. The First Sea Lord gets just over £200k.
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sorry I meant lifetime allowance...I'll edit
 
Kompany Car said:
Sorry mate but whilst I agree that the state pension should always be tax free, sums of money paid from private pensions shouldn't, the money has been taken before tax and grown in a tax free environment if in a DC scheme or have been topped up significantly and guaranteed by the government if its a DB scheme.
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No you misunderstood if you out up income tax for working people to say 25% when you retire and draw your private pension it should be done at a lower rate say 20%, you still pay tax but not as much so you are still paying your way, the state pension is almost taxable now, I agree the state one shouldn’t be taxed at all.
 
mosssideblue said:
Not sure if still the case but you could draw down annually an amount tax free
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Yes unless you hit just over a million at retirement where you might as well take it as a lump sum its the most tax efficient way to take it as it can continue to grow tax free and over time you can get more out tax free.
 
Blue Maverick said:
No you misunderstood if you out up income tax for working people to say 25% when you retire and draw your private pension it should be done at a lower rate say 20%, you still pay tax but not as much so you are still paying your way, the state pension is almost taxable now, I agree the state one shouldn’t be taxed at all.
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Why should it be any different ? What you are saying is you want a tax break but instead shift the tax burden on to younger people bringing up families and struggling to get on the housing ladder. Pensioners already dont pay NI contributions even though they still use the services funded by it.
 
Kompany Car said:
Why should it be any different ? What you are saying is you want a tax break but instead shift the tax burden on to younger people bringing up families and struggling to get on the housing ladder. Pensioners already dont pay NI contributions even though they still use the services funded by it.
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Gen question. What exactly does NI fund?
 
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