Salary sacrifice to be taxed

Factually wrong and stupid nonsense. Please stop posting misinformation.

I am concerned about the rise in usage of some benefits that aren't pensions but I agree with @222days that pensions are by far the most urgent problem.

Next year if there is no money the govt could decide to cut UC or PIP or whatever rather than raise it.

Triple lock just goes on forever and ever and ever.

I heard someone (an otherwise financially sensible person) the other day saying it was a promise that the government made so they should never cut it or else it would destroy confidence in the financial system - the existence of it and the mathematical inevitability of eventual collapse is what's destroying confidence!

Fully agree, and actually there’s a lot of uncertainty about the long-term value of GBP even from those who spend all day every day on this, hence the lack of FDI in the UK now and inflation devaluing our currency significantly over the last couple of decades and our lower credit rating and higher interest rates being demanded on gilts.

The only way out of the doom loop is for us to overhaul public spending completely and implement evidence-based policies that we know will work because we can see the evidence from other countries around the world, e.g. Germany’s structure for education and training, Estonia’s joined-up Government IT systems, Australia’s pensions system, the healthcare systems in much of Northern Europe, contributory benefits systems, tax systems without cliff-edges and where the public accepts that either everyone pays more for the level of services our northern European counterparts enjoy and these are universal, or taxes are lowered and everyone has to fund much more privately. You can’t have both and eventually the UK public will have to accept that there is no free lunch and acknowledge the large grey animal sitting in the corner. 🐘

Nobody wants to hear it though and very few seem capable of having a rational conversation about the facts, so I assume the doom loop will continue. If the Reform nutters are elected in a few years’ time that will be the final nail in the coffin and, as I’ve said on other threads, the doom loop will become a vertical drop at terminal velocity with no parachute.

Very few people seem prepared to engage their brains so I expect this is what will happen and then the UK will be unlikely to recover for 100 years, if at all. I suppose at least those of us who’ve invested our pension funds in foreign stocks will have a very favourable exchange rate when we sell shares to exchange it back into GBP for retirement income, if anybody with any significant savings remains here by that point!

It will impact millions of people. A third of private sector employees. Over 8 million people. That’s more than the total number of public sector employees.

So apparently the ageing population is the reason our public spending is so high (partly true, partly a cover up for justifying the scandal that is the benefits system for working age people).

But then how to solve it is to tax people who actually save for retirement. and because it’s a perk given by employers to employees because it is NI exempt for employers too, they will not take it away or reduce for employees. So guess what, this will reduce working people’s pay packets even more. Not to mention that pension funds are biggest investors in markets. Genius.

Rachel from Acounts gives ‘thick as mince’ a whole new meaning. I suspect she didn’t come up with this herself, she is not imaginative enough to be this stupid, it takes a brain cell to even conjure this up. She probably sat there looking gormless while the far left resolution foundation thinktank came up with it.

Honestly, the calibre of people running this country is so far down the toilet and the bar is so low that this country is doomed.

You were the one stating that your DH’s pension wasn’t doing as well as your stocks and shares ISA. You were given advice on that basis. Now you’re stating that he’s got non-UK pensions that have far performed UK pensions.

And you can have Nividia (and other US stocks in UK pensions). I have plenty of global stocks in my SIPP.

I have transferred over £100k from UK employer pensions into a SIPP in the past couple of years. There were no exit charges. I appreciate that may be different for foreign pensions but this discussion was about UK pensions.

This will not affect normal pension contributions or AVCs if it comes to pass.
Not many people use Salary Sacrifice. It is used to avoid paying National Insurance by both the employer and the employee. It is also often used to reduce salary so that benefits can be claimed.
It will affect very few people

Fully agree but it's really not surprising. How anyone is expected to be financially literate in this country is beyond me when every aspect of the financial system we live in is NOT based on the idea of money/currency as a fungible unit which can be exchanged for goods and services depending on one's priorities and planning.

Student loans with magical balances where you're punished if you try to treat it like a normal loan

Pension stamps for things that don't involve actually putting money into the pot

A range of benefits including various ones that unlock others and that pay directly for some services (e.g. housing) so the cost is invisible to the user

NHS Consultant pensions that no-one has any idea how to calculate the value of

Heck DB pensions at all!

It's a wonder anyone has any idea what a £ is worth at all.

God, it is just like the nonsense about the very temporary interest rate spike many decades ago.

Presumably you received sufficient education at primary school to understand that a large percentage of a small number may amount to a relatively insignificant amount in total in comparison to a far, far larger number that is orders of magnitude higher already and will continue to rise exponentially as a matter of mathematical certainty until the state pension is means-tested (essential because of changing age demographics and lack of planning to move away from a ponzi scheme system despite decades of warning about the effect of this) and the triple lock is abolished (because it was designed precisely to make the state pension rise exponentially but for a short period of time - because at that time there were a great many pensioners living in poverty and pensioners were not the richest cohort in society, and the country was in a better place (or at least able to pretend that it was) to afford to do this whereas now it categorically is not - and yet somehow pensioners have now got it into their heads that this should continue in perpetuity even though this is a mathematical impossibility).

“Other benefits” - while there are significant problems with the way the UK implements these (see my posts on other threads about this that I’m sure you can find with an advanced search if you are genuinely interested) will make no material difference to the UK’s overall fiscal situation and economic prosperity unless we address the major factors that are impoverishing the country above all else: our completely unsustainable and inefficient systems for funding state pensions and healthcare.

I was the same
No free childcare
I was actually paying to work

What an absolutely stupid post. My concern is about populism and politicians making decisions based on political optics and pressure groups instead of evidence-based policy.

I have posted a significant amount of factual information from economic studies to back up my posts here, with numbers. Where is yours to refute it?

Start talking about high earners vs low, DB vs DC, the balance of public vs private, long term merging of NI and basic rate tax and I’d be interested.

More nonsense showing that you haven’t read my posts on this thread which cover all of those issues. As do my posts on many other threads.

You are conveniently ignoring the rates for other benefits

Clearly the whole point of posting them

6.2% increase on UC and 3.8% on PIP ( with numbers growing particularly in the young ) cannot be ignored.

As usual it’s only ever one benefit prople prefer to focus on.

A complete overhaul of all benefits is necessary not just the ones that don’t affect people personally

That is very true. I actually took home less than I paid out in childcare in the 90s. I got no help with childcare vouchers etc.
I started my investment journey in the late 90s with very little money. And capital gains allowances were more generous….

Yawn
The exit fees in any product need to be a factor.
Dont Worry, sitting at your desk changing funds all the time, will be of little use when Rachel Reeves wants her pound of flesh.
And yes we have actual pensions in other countries. Because we have worked overseas.
And as you will know the US economy has boomed over time, so holding some there will be a back up.

The ni exemption for pensioners has nothing to do with an assumption of people’s poverty.

The current system
Pensioners don't pay National Insurance after reaching State Pension age because the NI system is designed to stop contributions once you are above a certain age ( ie now you’ve paid in you get your pension )

You still pay income tax on your pension if your total income is over the personal allowance, but NI contributions on earnings (if you're still working) and on your pension income itself are discontinued at this point.

I think it would be better for ni contributions to increase for all up to the 40years required. ie For those who have an income that is taxable and have not paid ni for the 40years ( based on the current yrs req ) that is required to receive the full state pension

Have you looked at exit charges?
He holds funds in various currencies….so will manage according to the value of the pound.
He has a 401k too so benefited from the US boom years. He can draw down in dollars as and when he wants to. Historically the U.S. dollar has been a stronger currency.
You are actually very rude and come over as aggressive. Let’s hope you don’t manage people because you don’t listen. I bet everyone rolls their eyes when you start banging on about how brilliant you are…
But as my final gift, I will just add I bought Nividia stock when we lived in the U.S. You will struggle to beat that one.

Funny how they always neglect to mention SERPS, isn’t it?

Just like the unspoken secret of MIRAS, when they start banging on about the very short period of a few weeks when they had to pay high interest rates on the peanuts they paid for their houses that they now want to sell to young families at ten times the price in real-terms.

Ahhhhh, MIRAS. I wonder how young people today would feel about being allowed to deduct their mortgage interest from their tax bill. Strange that all of these people hankering after the “good old days” aren’t campaigning for MIRAS to be reinstated so that young people now can enjoy that same tax relief, and in fact should apparently also have their pension contributions taxed as well! And pay student loans of course.

Absolutely no entitlement or selective memory, of course. Nothing to see here…

Just “GIVE ME MY TRIPLE LOCK. I don’t care if I have a house worth two million pounds with 4 spare bedrooms. Why should I downsize and use my own (largely untaxed) money to pay for myself? TAX THESE LAZY YOUNG PEOPLE MORE! Stop giving people welfare. Except me of course. Keep giving it to me of it wouldn’t be faaaaaaiiiiir! 😭 I want at least 3 cruises next year.”

Well, I’m very far from pension age and have indeed experienced when younger living somewhere with no central heating, no washing machine, no oven, no bed, damp on all the walls, single glazing, regularly not having sufficient money for food, regularly having the electricity cut off.

What’s your point?

Oh, sorry, of course: it’s the Four Yorkshireman sketch again, isn’t it? A parody of that parody seems to be the only thing that many pensioners seem to have to add when they attempt to interject into discussions on economics.

I would think they are very foolish not to have paid into SERPS. My working class dad never had a high paid job and he was made redundant on numerous occasions, but he has a pension that’s greater than the old basic amount because he paid into SERPS.

State pension welfare makes up over 50% of the entire welfare cost. The reasons people are focusing on this are that:

a) the triple lock is literally mathematically impossible to sustain for the long term: pension payments would end up exceeding total tax revenue, and then total GDP;

b) the level of magnitude. State pensions are currently £148bn per year. Means testing them without causing any financial hardship at all to pensioners (only removing it entirely from those with independent means exceeding the net income of working aged people earning the average UK full time salary of £37,500) would save £80-90bn per year. Compare this £80-90bn of unnecessary taxpayer expense to the recent proposals to save £5bn by removing benefits from many disabled people who are on average in the poorest cohort in society, unlike the pensioners who would be affected by means testing the state pension who are in the richest cohort in society. Compare this £80-90bn of unnecessary taxpayer expense to the proposals that this thread is about which purportedly were aimed to save £2bn, but in actual fact will cost far more than they will save because of the extremely negative economic consequences that would far outweigh this which I’ve set out in earlier posts.

Then you may begin to see why people are focusing on pension welfare: there is no other area of public expenditure where there is such enormously wasteful and unnecessary spending and it’s completely unsustainable and is starving productive parts of the economy (education, infrastructure, industrial policy) of investment that can generate rising productivity, salaries and living standards for future generations, and is also one of the main reasons for the shortfall between income and expenditure resulting in an ever-increasing national debt and £100bn per year now being spent just on interest on the national debt, hence state pensions requiring urgent reform with immediate effect. The country simply can’t afford them. It was entirely foreseeable and foreseen that this would be the case when the current pensioners were of working age but they did nothing about it and it cannot be delayed any longer not matter how outraged they are about it.

Wasn't MIRAS there to help people with mortgage interest rates?

Keep the masses arguing among themselves and blaming each other

Unfortunately those who have no long term life experience always think they’ve got it worse
Central heating now is an essential that for many was an absolute luxury as we huddled by the single electric fire in the living room

Most people on mumsnet can’t conceive a life without a dishwasher when my parents kept the milk in a bucket of water because they couldn’t afford a fridge despite both working full time including Saturdays and for my mum Christmas Eve etc aswell.

Did any here live through the last big recession when people lost their homes because Hmrc didn’t help with mortgage interest payments and there was no such thing as being given a mortgage holiday.

The bubble some people live in is laughable

You think pensioners live in luxury on £176.45 a week?

You really don’t understand it at all, do you?

He can invest his UK pension funds in the US stock market, or the Japanese stock market, or the stock markets of emerging economies. It does not have to be invested in the shares of companies registered in the country where the funds are held.

Nor does whether the funds are combined or held with different providers when he eventually draws down on them need to make any difference to which proportion he wants to keep invested in which asset classes or markets at any given time, which he would be adjusting gradually over time and during the years of withdrawal if he is managing his money competently.