Concerned that Labour govt might fleece me in upcoming budget?

[RightOh9oo]

Aibu to be concerned that Labour government might fleece myself/family in the next budget?

If they remove the right to UK pension for all, by making it means tested....I think I'll stop working this year. I'm early 50s, does anyone else feel like this?

I'm going without so much to save in my private pension, so no holidays to speak of.

Does anyone know what is in store in the upcoming budget?

Pension contributions are tax Exempt
Gains on pension saving are tax Exempt
Income from pension is Taxed

… under the same rules as income. So if your pension is in drawdown or you receive a DB pension or annuity then you pay tax on the income. You don’t pay any tax during the accumulation phase at all.

Thank you. That was very interesting. I really surprised more hasn't been made of that. Especially by the Tories! Perhaps they should use it as part of their messaging in the next election when the brain drain has hit their voter numbers - they could attract a whole new demographic!

Yes true, only problem being they were the ones who put up the taxes on the highest earners! It’s an interesting take tjough

I visit elderly people a lot as part of my job filling out disability benefit forms for them. I can absolutely confirm there are huge numbers of pensioners like this, they make up the vast majority of my workload. Massive houses or bungalows, landscaped gardens in beautiful villages, wall to wall wine racks ! Unless they want a full benefit check I don't need to ask about second homes etc so I don't know about that about that, but many will still take up the offer of a full benefit check and then tell me they have 200K in the bank ! My current job has been a real eye opener !

Brain drain has already hit many industries. Or if you’re in a global company like me - people are relocating. This has been happening for a few years now due to high tax/low comparative salaries. IMF starting the claxon on this when the ONS released state dependency stats. See what happens next I guess!

IMF starting the claxon on this when the ONS released state dependency stats

This has had a flashing red light for a while. Another reason to eye up Labour's policies

They need to not make it worse

I was being tongue-in-cheek. Should have used an emoticon!

But when they lose lots of their high earner voters, they could make the average voters aware and pick up those who wouldn’t have thought they were natural Tory voters.

Jokes are less funny when you have to explain them. Sorry! ☺️

Any Govt. of any party at any budget might "fleece you".

The biggest raids on pension funds in the last 50 years were under a Tory Chancellor (Lawson).

Why worry? There'll will be people at pensions consultancy firms working through the night after the Budget working out what the Budget means and how its effects can be minimised or maximised (as the case may be). I know, I used to be one of them.

This has always fascinated me - we use a Big Name accountancy firm for our business.
Their take on the budget, along with a fancy booklet with the details arrives in the post the next day, I’ve always wondered how they can turn around the information so fast! Almost like they’ve got it ready to print as the minister steps out with the brief case…

People close to the thresholds absolutely do change behaviour- drop days' salary sacrifice into pensions and cars etc. the £100k one is particularly bad, and it is very much resented that at say £110k you pay a higher marginal tax rate than you do at £150k plus. You may have little sympathy but the net result is a lower tax take. The higher rates overall (40 and 45%) are not out of whack globally but taxing people on £100k over 60% and taking away other benefits at that level is a high enough penalty for people to actively try to stay under the limit

Yes this very much is a problem that needs to be fixe

”Putting”. this is why people get judged by others who do not know the full facts. Just read what they see and dismiss the whole story calling you “lucky”. My husband paid my full stamp so I would do better with my Pension. I don’t know how much that was then

it. Was an agreement so that my Pension would be better, for the whole of my retired life; that has been “cancelled “ overnight, so where is the money I paid, or a partial refund as it wasn’t allowed to run its natural course; I am not 80 until next year; as a result, I get no help with fuel, I am not talking £500, but not even £150 as the Government who helped with 4 payments, is no longer in power and it’s 3 yrs since the first electricity scare, so it’s much more costly too now; I am saying, my circumstances have changed radically since that Stamp was paid; I assume you know how much that was per week, we weren’t paid monthly back then, so that is why you think I got so much for so little? Now my childrrn have children, my second marriage failed, due to his remortgaging my property, without my consent and his need to go bankrupt from his first marriage, which took all my good credit record down with his bankruptcy, I repaid £20,000 of his outstanding debts he left me with. As yet again he took out second cards on my accounts and maxed them out as well; so when you say I think you are very lucky to get that much for paying so little?
wiyh respect, you couldn’t be more wrong “Putting” ; you see this blanket assumption that nothing changed in either my circumstances or any Pensioner’s circumstances since 1970, is frankly ridiculous, I don’t know what my first husband had to pay back then for the ongoing payment of that stamp, but do know, ghost wages were not on any professional’s level, plus we were buying a house with s high mortgage rate and soon to be one salary. So sorry but fail to understand your point entirely.

The changes which I am seeing signalled are reducing tax relief on pensions (limiting to 30 or 20%), limiting tax free lump sumps on pensions. Increasing CGT, potentially to the same rates as income tax. Means testing pensions will come at some point, but not just now. More likely a new government will wait until another crisis similar to Covid to justify such a monumental change- but it will come. Every year I pay a bit more and get less. No one really seems interested in getting more efficiency for public services or in asking what we should be spending money on.

pensions will not be means tested.

The first won’t happen. Always signalled but HUGE unintended consequences. Hence why the IMF have said don’t. That money doesn’t just sit in accounts. It’s used for investment - hence the returns, it’s needed. Plus the higher tax payers who it is intended to target will just save less into pensions, drop a day or salary sacrifice in to a top of the range sports car.

All this talk of penalising higher rate taxpayers whose employers pay into private pensions, limiting the state pension etc, but a real concern in a shrinking economy is surely the cost of employer (taxpayer) contributions into unfunded public sector pensions? Why are we still paying huge employer pension contributions of 28.07% of salary to e.g. high earning civil servants, MPs, hospital ceos, chancellors and other highly paid public sector workers? None of this makes sense. Of course our problem is that for most public sector pension schemes, because they are unfounded (just like the state pension) today’s taxpayers are paying the pensions of those who have already retired, making it very difficult to change anything, But ultimately we need measures that incentivise people to work, create jobs and invest. Targeting private sector pensions without being honest about the public sector pension bill is not acceptable.

Unfunded - not unfounded!

Well quite. Which is where the tax the rich rhetoric falls flat on its arse. We need wealth creators, job creators and higher rate tax payers. Tax them out of oblivion and there is no-one to pay for the bloated public sector and welfare state. Notice that rhetoric has gone slightly quiet on here of late now people realise Labour don’t have a magic money tree. They will also be very careful of any tax that hits higher rate tax payers because of the public sector.

The awkward truth is that the Tories made sure that high earners are paying record tax burdens whilst everyone else was not. Net result is the greatest state burden we have ever had and no-one to pay for it. Excellent.

@Figmentofmyimagination Civil servants are typically paid a bit less than they would be in the private sector for the same job. The pension is just part of the compensation. Senior civil servants have seen their pay decrease in real terms by 22% since 2010.

For example, a lead full stack developer would typically be on >70k outside of London, in the private sector you might get a 5-10% pension match…. The civil service pays 55k for a lead full stack developer position. With the pension and the other good benefits it’s worth it, but without that they would have a really hard time recruiting.

It's strange how the rhetoric built that it was the opposite re the last gov not taxing the rich. And I agree with the rest of your post

Labour might throw out a Reeves pre GE manifesto on fiscal rules but it won't help them to keep piling on the debt, which they've already started to do

rhayader then they should offer a more competitive salary but with a cheaper pension offer. Loading up the next generation with pension debt when the economy is not growing is not acceptable.

It would be interesting to see figures on this. We are living longer these days and the split could change

The problem with that (and I don’t disagree with you) is that currently unfunded pensions cost the taxpayer £7.9 billion. Without contributions going in, it would be £53.1 billion. At least according to the OBR, which has a really interesting site for numbers people!

https://obr.uk/forecasts-in-depth/tax-by-tax-spend-by-spend/public-service-pension-payments-net/

Most civil servants would happily take higher pay and reduced pensions. But the government of the day always prefers to make paying them someone else’s problem (future governments) so they offer money tomorrow instead of money today….. so that never seems to happen. Civil servants have rising cost of living like everyone else.

To be clear, when I say government of the day I mean red, blue, yellow etc. This isnt a dig at Labour, they all seem to do this.