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Salary sacrifice to be taxed

560 replies

SomethingInTheAirToday · 08/11/2025 19:02

https://x.com/politlcsuk/status/1986914552093745592?s=46

not only are my generation not going to have a state pension or private healthcare, but we also can’t save into our own pensions because we need to fund the current generation.

this makes me so angry

Politics UK (@PolitlcsUK) on X

🚨 NEW: Rachel Reeves will use the Budget to impose a £2k-a-year limit on how much salary can go into a pension before paying National Insurance The move will raise £2bn and hit salary sacrifice schemes [@thetimes]

https://x.com/politlcsuk/status/1986914552093745592?s=46

OP posts:
Thread gallery
7
Plantatreetoday · 09/11/2025 13:24

cityanalyst678 · 09/11/2025 13:20

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….

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

222days · 09/11/2025 13:30

Plantatreetoday · 09/11/2025 13:22

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

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.

OneAmberFinch · 09/11/2025 13:32

222days · 09/11/2025 12:40

This thread has been like bashing one’s head on a wall. Threads like this evidence so clearly the economic illiteracy and lack of basic numeracy in the population. It’s even more concerning given that those responding to such threads about tax and fiscal policy presumably are among the more informed members of the electorate. It does rather explain why such inccompetent politicians keep being elected.

It seems that saying about a country getting the Government that it deserves is validated. However, it’s a shame that the consequences of this level of economic illiteracy in much of the population have to be inflicted on the rest of us continually.

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.

Theyreeatingthedogs · 09/11/2025 13:41

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

Boohoo76 · 09/11/2025 13:41

cityanalyst678 · 09/11/2025 13:12

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.

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.

WildLimePoet · 09/11/2025 13:44

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.

Boohoo76 · 09/11/2025 13:44

Theyreeatingthedogs · 09/11/2025 13:41

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

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.

222days · 09/11/2025 13:45

OneAmberFinch · 09/11/2025 13:32

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.

Edited

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!

OneAmberFinch · 09/11/2025 13:47

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!

222days · 09/11/2025 13:47

Theyreeatingthedogs · 09/11/2025 13:41

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

Factually wrong and stupid nonsense. Please stop posting misinformation.

WildLimePoet · 09/11/2025 13:49

Apparently, three consultants were hired this week to give Labour MPs some lessons in tax and economics. Honestly you could not make his shit up. We have glorified social workers and charity workers, who have never run anything in their lives or generated any wealth, making choices about the country finances. I bet Rachel from accounts was at the front row being educated by the consultants.

There has to be some consequence to this. This cannot go on. Parliament needs to be dissolved and Labour government booted out into oblivion.

LabourOfLoathing · 09/11/2025 13:54

Pretty soon the government will run out of things they can tax and they will just bring in a new law that will just let them raid people’s bank accounts when they need a bit more money.

222days · 09/11/2025 13:55

cityanalyst678 · 09/11/2025 13:17

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.

Nobody was talking about overseas pension funds. This thread is about UK pension funds and UK fiscal policy. You stated that the money in your husbands UK pension savings couldn’t be invested in the same stocks and shares as your funds in a UK ISA which is categorically wrong because he can transfer them to a UK SIPP and invest them in whichever global assets he chooses to invest them in. Not having done so and therefore receiving lower returns is entirely his responsibility.

Cheeseontoastghost · 09/11/2025 13:56

222days · 09/11/2025 13:06

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.”

Edited

Except they are not referring to the few days in the 90s when interest rates rocketed.
They are referring to the 1970s when interest rates were 7.5% -17.5% for the entire decade
Look up the oil crisis, inflation, unemployment and the 73-75 recession.
Most people lived in relative poverty until the end of the 70s/ early 80s when living standards rose.

You don't know what you are talking about !

222days · 09/11/2025 13:59

Boohoo76 · 09/11/2025 13:41

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.

Thank you. I’d read this exchange again and been bemused because to me the posts seem to be perfectly clear, basic English so it’s reassuring to see that others understood the it all perfectly clearly and it is just this poster being disingenuous.

EasternStandard · 09/11/2025 13:59

WildLimePoet · 09/11/2025 13:49

Apparently, three consultants were hired this week to give Labour MPs some lessons in tax and economics. Honestly you could not make his shit up. We have glorified social workers and charity workers, who have never run anything in their lives or generated any wealth, making choices about the country finances. I bet Rachel from accounts was at the front row being educated by the consultants.

There has to be some consequence to this. This cannot go on. Parliament needs to be dissolved and Labour government booted out into oblivion.

Edited

Sounds great. Incredible huh

Plantatreetoday · 09/11/2025 14:02

222days · 09/11/2025 13:30

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.

Edited

Your posts are very rude and by using language that demeans others you gain nothing but disrespect

You might want to do some research of your own regarding pension poverty
Standing back and looking at that without seething that some may have more than you and regarding that as unfair will allow you to see it with more balance

You could start with the Resolution Foundation and go from there

Until we no longer have pension poverty the increases still required to work people out of that are required. When we reach that stage then it would be fair to keep pension increases inline with other benefits as necessary.

Meanwhile we all know Labours modus operandi. No one must have really believed their promise not to tax workers. Anyone with a single brain cell could see this budget coming

Thisiswhathings · 09/11/2025 14:07

How long would it take to remove pensioner poverty and at what cost ?
The triple lock seems a blunt and expensive tool to do so.

WildLimePoet · 09/11/2025 14:07

Plantatreetoday · 09/11/2025 14:02

Your posts are very rude and by using language that demeans others you gain nothing but disrespect

You might want to do some research of your own regarding pension poverty
Standing back and looking at that without seething that some may have more than you and regarding that as unfair will allow you to see it with more balance

You could start with the Resolution Foundation and go from there

Until we no longer have pension poverty the increases still required to work people out of that are required. When we reach that stage then it would be fair to keep pension increases inline with other benefits as necessary.

Meanwhile we all know Labours modus operandi. No one must have really believed their promise not to tax workers. Anyone with a single brain cell could see this budget coming

Yeah, let’s all look at the Resolution Foundation. The far left socialist organization. Let’s not look at anything unbiased.

nearlylovemyusername · 09/11/2025 14:12

222days · 09/11/2025 12:40

This thread has been like bashing one’s head on a wall. Threads like this evidence so clearly the economic illiteracy and lack of basic numeracy in the population. It’s even more concerning given that those responding to such threads about tax and fiscal policy presumably are among the more informed members of the electorate. It does rather explain why such inccompetent politicians keep being elected.

It seems that saying about a country getting the Government that it deserves is validated. However, it’s a shame that the consequences of this level of economic illiteracy in much of the population have to be inflicted on the rest of us continually.

Nailed it.

We need to introduce IQ testing prior to allowing people to vote

Plantatreetoday · 09/11/2025 14:14

OneAmberFinch · 09/11/2025 13:47

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!

All benefits and the cost of our welfare state are a huge problem
Including the large increase in numbers of some claiming them

The triple lock is only there whilst we have pension poverty. That’s why it was introduced.

Until a Government is prepared to make the very hard decision of reducing welfare spending the working population or anyone with , well anything, is bound to pay the price

Labour tried with the Conservatives paper on PIP and all MPs from other parties plus half the Labour MPs voted it down. That needs to be looked at again. For starters.

I think after this budget people will be more willing to agree that just increasing taxes on some is not only never going to be enough but also not an equal system.

nearlylovemyusername · 09/11/2025 14:18

WildLimePoet · 09/11/2025 13:49

Apparently, three consultants were hired this week to give Labour MPs some lessons in tax and economics. Honestly you could not make his shit up. We have glorified social workers and charity workers, who have never run anything in their lives or generated any wealth, making choices about the country finances. I bet Rachel from accounts was at the front row being educated by the consultants.

There has to be some consequence to this. This cannot go on. Parliament needs to be dissolved and Labour government booted out into oblivion.

Edited

Can you share any links?
I don't doubt it, the level of Labor incompetence is shocking, I hope they can grasp some basics, although party full of the likes of Angela (can she count??)...

222days · 09/11/2025 14:18

Cheeseontoastghost · 09/11/2025 13:56

Except they are not referring to the few days in the 90s when interest rates rocketed.
They are referring to the 1970s when interest rates were 7.5% -17.5% for the entire decade
Look up the oil crisis, inflation, unemployment and the 73-75 recession.
Most people lived in relative poverty until the end of the 70s/ early 80s when living standards rose.

You don't know what you are talking about !

Lol. A lot of that chaos had a lot to do with a Labour Government as well, as I remember? And here we are again. Yes, interest rates were higher. But higher interest rates on a debt that was a much tinier multiple of your household income still equate to a much lower proportion of your household income overall than paying lower interest rates on a debt that is a much higher multiple of your household income. And this time not for a decade, but in perpetuity.

There was also significant inflation during that period which meant that people’s mortgages pretty much inflated away. This only works, however, if the inflation is accompanied by corresponding salary rises. In the 1970s and 1980s that happened. Now, however, this is not happening and there has been barely any real-terms salary increase for the last two decades in most occupations. On top of this people have ever-increasing costs for childcare (because now the vast majority of families have two working parents: workforce participation is at its highest level since it started being measured properly in the early 1970s, despite the Boomers claiming young people are lazy slackers - the evidence shows a higher proportion of them are working and a higher proportion are working full time, than their parents’/ grandparents’ generation who are now retired). Meanwhile we have had charges imposed on education, housing costs going up by many multiples in real-terms, the economy and growth unnecessarily damaged further by Brexit (guess who was the largest cohort voting for that?), and taxes at an all time high since before the Boomers were born.

Your false equivalences will not wash, I’m afraid. Even without an economics background a look at some basic graphs will demonstrate to you that the above are all established economic facts which are indisputable. The pretence that somehow the retired generation had life harder is simply nonsense. Their parents’ generation had it very hard, who actually fought in the second world war, but very few of them remain.

The people I am talking about are their children, who have been a generation who lived in a time of huge opportunity, rising living standards and economic opportunity, opportunities for social mobility, and simultaneously sold off and trashed the country’s public infrastructure and public institutions and stripped everything to the bones like a pack of piranhas, pulled every ladder up behind them and now have the audacity to blame everyone else for objecting to impoverishing further the subsequent generations in order to keep them in luxury that they have neither paid sufficient money to fund nor funded for their own parents or grandparents who were far more deserving because they were the ones who set up all of the infrastructure and institutions that the current retirees benefitted from and then destroyed for those who followed.

The absolute refusal to accept to take any responsibility for their own choices when they were the ones making the decisions, their continued stranglehold on politics preventing any change that’s not for their own personal benefit despite knowing damn well that they are the first generation in history to have left their children worse off than they were, is quite disgusting. Obviously there are exceptions, but a large proportion of that generation are supremely entitled and selfish and seem to have convinced themselves that all of the economic data is falsified and somehow everything they have extracted from society is the fruit of their own labour. I’m afraid that it is perfectly clear to everybody else, and an indisputable fact, that this is not the case and as a cohort they have an enormous debt to the rest of society which they are going to have to start to repay now.

222days · 09/11/2025 14:30

It’s just crazy even to be having to have these discussions, rather than anybody discussing the possible solutions. Why are we being forced to continually refute nonsense which quite clearly contradicts established economic facts demonstrated by decades of economic data? The cognitive dissonance involved really is breathtaking, that people are this unwilling or incapable of accepting what is publicly available and easily accessible information in countless robust economic studies which are available online, including many graphs and visual representations to help the understanding of those who aren’t good with numbers or large data sets.

Every single time the actual economic issues that need to be addressed before anything can improve in the UK are raised it is met with the same self-righteous posts, the same Four Yorkshireman sketches, the same personal anecdotes (as if cohort analysis of national data is negated by one person’s personal experience or that of their particular family!).

I agree with PPs like @OneAmberFinch and @WildLimePoet, @Pandersmum and @nomas that the situation in the UK is probably irretrievable because the current cohort of pensioners are determined that their lifestyle won’t be impacted in any way to address the UK’s fiscal position which has largely been caused by their own actions and that everyone else should continue to subsidise even those of them who do not require any public subsidy at all to live perfectly comfortably from their own wealth. They will continue their stranglehold over the UK economy and to drag us all underwater until it’s too late and we have all drowned.

222days · 09/11/2025 14:41

Plantatreetoday · 09/11/2025 14:02

Your posts are very rude and by using language that demeans others you gain nothing but disrespect

You might want to do some research of your own regarding pension poverty
Standing back and looking at that without seething that some may have more than you and regarding that as unfair will allow you to see it with more balance

You could start with the Resolution Foundation and go from there

Until we no longer have pension poverty the increases still required to work people out of that are required. When we reach that stage then it would be fair to keep pension increases inline with other benefits as necessary.

Meanwhile we all know Labours modus operandi. No one must have really believed their promise not to tax workers. Anyone with a single brain cell could see this budget coming

The Resolution Foundation?!!?

Hahahaaaaaaaa

I mean, I really just give up.

You’re telling me to learn about economics? This is my job.

Please explain how means-testing the state pension and tapering it away as they do in Australia so that no pensioner is left with an income below that which exceeds the net income of someone earning the average UK salary of £37,500 per year would create pensioner poverty?

Swipe left for the next trending thread