Salary sacrifice to be taxed

[SomethingInTheAirToday]

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

You sound depressed

Indeed. This is the whole point of pensions. The government is incentivising you to save for the future by not taxing you on this income now, and instead taxing you on this income later in retirement. The current situation isn’t a tax dodge. You’ll just be taxed on it later in life.

I cannot see anything that penalises defined contribution pensions going down at all well when dc pension savers have shot pensions and high tax to bail the government out of their ludicrous defined benefit promises they made to public sector workers.

The deficit is but a drop in the ocean compared to the underfunded public sector pensions shit show coming down the tracks!

Do you have any evidence or is it just your opinion? X is full of false speculations about the budget.

It’s not about unfairness. The gov needs people to pay into pensions, because the state pension is going to have to be significantly changed (reduced, means tested, but definitely changed) at some point. They need people to have private pensions. That’s why there are benefits to paying into a pension eg for tax free childcare & free nursery hours it’s your post pension income that counts - that’s not a loophole, it’s an incentive.
If this change discourages people from putting that bit extra into their pension (even if that’s not sensible on their part) then it’s a fuck up.

Most people don't use salary sacrifice to pay their pension contributions so it will make no difference to most people.

I see this as a better way to increase revenue for the government to now as it won't impact what is in people's pockets.

Stopping NI benefits on salary sacrifice won't make much difference to the amount going into a pension. A basic rate taxpayer will still benefit from 20% tax relief. They will just lose the 8% NI saving, so 8 quid on a £100 contribution. A higher and additional rate taxpayer will still get 40/45% tax relief and will only lose 2% of their contribution, so even less of a contribution hit and still benefitting from the massive tax relief.

There are many businesses out there that also benefit from the NI saving (some are generous and pay the employer NI saving into an employee's pension but most don't), so the government will also benefit from extra employer NI.

To the OP, on 24k, if you have been auto enrolled and you aren't using salary sacrifice it will make no difference to you. If you are using salary sacrifice then it will make very little difference.

@SomethingInTheAirToday are you aware that pensioners have no control over government policy? Why are you directing your anger at them?

So it also affects lower earners more (8% for them, 2% for higher earners).

I remember Sunak saying before the GE. Mark my words they will be after your pension, increase your taxes, tax your cars - it’s in Labour’s DNA.

Private sector workers having their tax increased to fund defined benefit public sector pensions. A level of pension provision that private sector workers can only dream of. Absolutely disgusting.

I’m not sure The Times usually bases its front page on ‘second guessing’ - I think this is the source of the OPs tweet link
https://www.thetimes.com/article/2f1a3288-bf87-4948-8e80-7466d05a75bd?shareToken=www.thetimes.com/article/2f1a3288-bf87-4948-8e80-7466d05a75bd?shareToken=517eee0017523f366ac3ae17e6d822a1

Are you referring to the state pension of £11,973 at age 68 , if so, hardly a “living in luxury”. Furthermore the UK state pension is one of the worst in Europe.
You need to work on securing a better paid job OP. When you’ve paid upwards of £200k in National Insurance alone, over a 35 year working life and taken very little back from the state, let’s see if your views differ then. 🙄

No incentive for paying into a private pension.

I could be wrong but don't they give you income in retirement?

This is exactly why the government should incentivise private pensions, not tax them. Because the state pension in the UK is one of the lowest in Europe.

Yep, which is rubbish. Just like the 4% NI cuts the tories introduced towards the end of the last government. I am now 120 pounds a month better off because of it as a higher rate taxpayer but someone on 25k would have been a lost less better off. With the cost of living issues this policy annoyed me so much and then labour didn't even roll it back, something that would have been simple to do as it hadn't been in place long. Just made the wealth disparity bigger. I know some higher rate taxpayers will still be struggling financially, especially those in the SE but I would have preferred a different, more even policy to get more money in people's pockets

Public sector workers are having their tax increased too.

It always baffles me about private sector workers moaning about the “gold plated” public sector pensions. If they are that great then come and be a nurse in A&E where waiting times are through the roof or teach in a class of 35 Year 2s.

Thought not.

Stop with the ageism. Who do you think was funding the NHS while your mother was carrying you? Who was funding the child benefit she received? Who was funding your education? Do you think you’re the fist ever generation to fund the previous ones?

The triple lock needs to go.
There is no way the country can afford this if this is how the government intends on filling its gargantuan black hole in the books.

Deeply patronising. Labour is spreading these stories deliberately to test public opinion. I’m sure you know that.

Every company that I have worked for over the past 20 years has used salary sacrifice for pensions. Where is your evidence that most people don’t use salary sacrifice?

It is 30% of private sector employees I believe. And fewer in the private sector.

Even left wing commentators are saying how desperate it makes Reeves look when she starts raiding pension pots.

Evidence please. I have worked for small and medium sized British companies and global Swiss and U.S. companies. All use salary sacrifice.

A lot of private sector workers have employer contributions of 3 percent so extra contributions are vital to get a decent pension.

public sector workers typically have 20-28 percent employer contributions, so their additional voluntary contributions through salary sacrifice are lower.

It's also in The Times:

https://www.thetimes.com/uk/politics/article/stealth-tax-budget-rachel-reeves-q3gmmcbqf

My pension contributions are free of income tax but not national insurance.