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?

I don’t think anyone’s “keen”. Some of us know it’s the reality if we want functional public services.

Well it would, but the kicker is the private pension is all provided for by the person saving, whereas the wildly underfunded contributions of a public sector pension are underwritten by taxpayers.

Plenty of taxpayers working in the public sector.

I think they went in heavy on the no extra tax pre GE and it won't be as well received as this thread suggests.

And that's before which taxes and the need for economic growth to do much at all

I don’t think it will be pensions tax relief, IFS have warned the government this would be a disaster. You need people paying into pensions, the country also needs that money for investment. Anything which puts people off doing this would be catastrophic for investment. It would also set Starmer against the public sector. He won’t do it. The private sector would just salary sacrifice into the best cars they could. He’d piss off a lot of doctors.

I don't have a clue. There isn't an easy answer.

But we're burying our heads in the sand. The status quo is not remotely sustainable. Our aging population is going to put a huge financial burden on the state in the next few years and we won't have enough people active in the economy to pay for it.

The Tories were addressing on the sly with increasing immigration to get worker numbers up (whilst pretending to be anti immigration) but that is a whole other can of worms.

AI might help in the future to boost productivity... Who knows?

All I know for certain is that ignoring the problem, yelling about "paying into the pot" etc isn't going to make the problem vanish. Difficult decisions need to be taken. Hopefully some innovative decisions as well.

You're right.

Actually if a person gets a full state pension but nothing else ie no private pension at all they will be worse off than pensioners who do not get the full state so get Pension Credit, free council tax, free dentistry, and Winter Fuel payments. Together they are better off than people who have worked to get the state pension. That should not be the case because it disincentives people working and paying tax. Pensioners on benefits should not be better off than those that worked.

Shouldn't have voted Labour then.

so you think it’s ok to tell people they WILL get SP based on qualifying years of NI contributions then potentially say ‘sorry no, you can’t have it now, we can’t afford it’ but well done folks, you’ve paid for previous generations to retire. And we should just say ok?

I don't think reducing tax relief on pensions is terrible. It's not generous for low earners and employers contributions are woefully low. A flat rate of 30% tax relief, which is a top up for low earners and still incentivises top earners , makes a lot of sense. We can't politically reduce the state pension until at least low earners have some equivalent benefit in private benefits. This would be a step on the road. We have a system both in healthcare and pensions that work based on NI contributions which isn't sustainable. But you can't change overnight- it's a long process

So stop giving foreign aid, stop paying people to not work for their whole life, stop paying millions to middle nhs management & agency costs & stick to what you said would happen. Which is, you work all your life, get full NI & this gets you a SP.

They have said over and over again, short term pain for long term gain.
Austerity mark 2:labour style where the balance shifts to their mates, the unions.

Where did I say that in my post.

Please highlight the bit where you think I said that...

The unions are composed of working people.

There’s going to be no public services either way!

A flat 30% doesn’t really incentivise the highest earners. Someone who pays 45% tax would be paying 15% tax to put it into their pension and then up to 45% to get it back out (or more depending on the whim of future governments).

if ISAs do not get a “total pot limit” then it’s probably better to take the money as cash and have a bit more control over it. You can use it before retirement age etc. It still grows tax free, and actually the LISA would give you 20% back anyway which is not far off and you wouldn’t need to pay the tax to take money out of it!

edit: (forgot the Lisa bonus is only for 1k a year, so that bit is a little bit less attractive)

Couples with one high earner and one lower earner would also be incentivised to top up the lower earners pension because the overall tax burden would be lower, given that they would be unlikely to hit the higher tax rates or the lifetime limit if that is reinstated by a future government. I’m sure this would become a well trodden tax avoiding route.

Oh ye of little faith. Of course there will. I’m old enough to remember how much they improved at the turn of the century.

Absolutely.

We need a proper rethink of the pension system, the current demographics of the country mean that it is just not sustainable in the long term in its current format. And that conversation can only be had once people understand that they have not paid money in which they’ll then get back, they have paid for the generations before them, and it’s the generations after them which will pay their pension.

‘The status quo is not remotely sustainable’

What do you want though? Can you say what this rethink looks like

You think things can go back to then?🤣 ok then…

Not bovvered either way as I've already been skinned alive by whoever is in charge but mostly by the well-paid public sector flunkies charged with doing the bidding of their 'superiors' whilst racking up a great deal of extra pension to look forward to (at great cost to the low-waged poor). And the really, truly just-managing poor can only hope that the State Pension will still exist as they/we grasp our way towards it.

As it will be our only guaranteed income.

Rachel, is that you, looking for ideas? 💡

Couples with one high earner and one lower earner would also be incentivised to top up the lower earners pension because the overall tax burden would be lower, given that they would be unlikely to hit the higher tax rates or the lifetime limit if that is reinstated by a future government.

That wouldn’t work if there was a limit of the percentage of annual salary. It would be a huge gamble for the higher earner, what’s to stop the pension holder walk off with all the money if they split up?