Who is able to build up this sort of pension pot?

[NetballMumGrrr]

£1 million and now £1.7 million’ who can put £40k a year into a pension? And now £60k?

such disparities in wealth in this country!

BBC Pension Article

A lot of the issues are with defined benefit schemes, which "value" the annual contribution on the basis of the benefit receivable earned in a year. With increasing length of service, seniority and pay lots of doctors can easily be approaching the limit. This has lead to withdrawal of labour from experienced workers.

As an accountant, I know lots of business owners who fund their pensions schemes up to the £40,000 annual limit every year.

A lot of them will be senior doctors and consultants, apparently. You know, the ones who were junior doctors once, that’s the ones who are on strike today because they don’t think they get enough money? Them.

It's not necessarily £40k of contributions, in some schemes e.g. NHS it's £40k of growth which is easily achievable for many doctors. This coupled with doctors not being able to reduce what they are contributing (to reduce growth) means many are having to either leave the scheme which is obviously a huge decision to make OR are just working less. The new £60k allowance is a welcome change for NHS staffing issues.

Doctors and civil servants. Senior civil servants can’t get about a third of their salaries again in pension contributions. Easily doable if you’re on £120-150k a year.

It’s about £1000 pcm over 45 years.

Obviously loads but not completely unattainable if you earn say, £80k plus and have large employer contributions. If you earn £80k on average over your career and your employer contributes 12%, you only have to put in £200 pcm. The power of compound interest and starting early.

That said, I think it’s a ridiculous change and there’s far more pressing issues.

I disagree that's it's not a pressing issue, as an accountant specialising in the healthcare sector it's having a huge effect on how much doctors are working (as they don't want to leave the scheme fully), whether you agree or disagree with doctors choosing to work less because of it, it is a decision they are making so raising the allowance to £60k is going to help the situation.

A lot of senior professionals. It’s not as rare as you think. Many of them have been leaving the workforce early due to this issue, so it’s a good idea to encourage them to stay in work.

I’m in my 40s and in this position via a company scheme, it’s really quite common.

I started contributing to my pension when I qualified (non medic but professional qual) in my early 20s.

Contributed as much as I could every year (fairly thrifty but have a nice life) I started paying £100/ month and have benefited from investment growth over 35+ years. Was surprised I was at the limit when I checked.

If they want consultants or GP partners to work full time/ do overtime this is very much needed.

I used to manage pensions for doctors and other professionals.

It was not uncommon for me to warn my clients that they were approaching the threshold and yes many doctors did then choose to retire early.

As for super rich - well I've had teachers and supermarket managers hit the LTA as well.

DP was at 96% of the LTA when he retired and he was a IT manager.

The change is much needed if we are not to have people being forced into early retirement early

Yes, I was just speaking with an Accountant friend she said that Directors of companies will do the same throw in £40k a year as it’s tax efficient.

I’m not sure how it works for Doctors but makes sense if they can hit their limits quickly.

If you earn a lot, and you haven't decided to spend it all on fancy cars, massive mortgages and private schools, then of course you can turf it away into your pension.

When I moved up from £2000 to £3000 take home, the rough break down was £1200 to bills, £500 to savings, £500 to free spends and £800 to pension.

If I earned more, ALL of it would go to pension. You don't need to upgrade your lifestyle spends with every pay increase.

This is absolutely right and thanks to those posters who have explained how this affects defined benefit schemes. I work in the public sector and am affected by the current limits but even I find it a complicated thing to get my head round.

As a pp said, in the NHS we can’t adjust our contributions to ensure we stay in current limits - you are either in the scheme or you’re not. I’ve known many GPS retire in their mid 50s as the current tax arrangements mean it isn’t worth them continuing to work.

Bottom line is that if we want to reduce the numbers of GPs retiring early, and make it easier for hospital doctors to undertake extra sessions to clear waiting lists, this change is essential.

I have never voted Tory in my life by the way so it is unlike me to supporting a Tory budget but this is crucial for them NHS at the moment.

The younger you (can afford) to start paying in the more time those first contributions have to grow.

People like my husband (mon medic) but professional/technical. He has reached his lifetime allowance at age 58 through a combination of a defined benefit scheme, AVC's as his salary increaced and investment growth. He earns a good salary but not exorbitant, we are careful but not frugal. He was considering early retirement solely because of the pension issue! I'm guessing the rise is to keep people like him working for a few more years.

As pps have said you have to remember that pensions grow, ideally over decades, so many people who started paying in early and benefitted from high employer contributions can amass this quite quickly.

A £400k pot at age 40 would have hit the max lifetime amount after 25 years with no further contributions and average growth.

More people than you would expect. When I worked in payroll we always had some employees who had reached or were about to reach the lifetime allowance. They were senior managers/directors but it's not impossible if they've had good employer contributions and built their pot up over decades.

I think it's a much needed change to keep doctors and other senior professionals in the workforce and not taking early retirement.

@Stillhatemondays yep never voted Tory here either so it makes a change to support them on something (although it's taken a long time to make the changes).

Civil servants, doctors, people running their own successful companies?

The NHS have been forced to change the rules for specialists who were refusing to work because they were so heavily taxed.

That will be all the very badly paid junior doctors who'll be on £100K+ in 8-10 years time.

Sorry if I sound unsympathetic. I have a consultant paediatrician friend married to a consultant neurologist and they complained long and hard to me when each of them hit the £1,000,000 pension pot barrier when they were in their early 50s. It was quite difficult 8 years ago, me with very little in the way of a pension, being asked to listen to them ranting about the unfairness of their situation. Saw them a few weeks ago. They told me they'd just sold their holiday cottage for three times the price they'd paid for it in 2004 and they've bought a boat. My heart went out to them. Such hard times...

Civil servants, judges and NHS senior staff have been affected by the £40k a year. Because it’s not jsut what you and your employer put in. Due to how the pensions in these sectors work there is a growth in the fund which is happened outside your contributions. And in these pensions, and not in private pensions, this counts towards your 40k cap. Lots of consultants in their 40/50s been hit with 5 figure tax bills on money they may never see but it theoretically in their pension pot. Which have to be paid immediately.
So they reduce their hours to stop hitting it in future years.
if you have a private pension which is we managed and grows that is not included in the contribution cap, but does count to
the lifetime cap.

Senior Police officers so presumably anyone of a senior level in the public sector.

That consultant neurologist and consultant paediatrician will have been saving lives on a daily basis. Their training is brutal and their hours are long and unsociable and pretty much impossible to sustain alongside family life. They deserve every penny they get imo.

Im a lawyer and get paid way more than a consultant doctor for much less of a contribution to society so save your anger for people like me.

Is this comment even necessary?! What has junior doctors striking for what they believe is right got to do with a consultants pension contribution?