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

Try having to answer your boss’s emails at midnight.

The hours in the private sector areinsane.

Roll on election time.

Over the last 20 years, the four employers that I have worked for have all run salary sacrifice pension schemes. Small and medium sized uk companies and Swiss and U.S. global companies. I appreciate that it may be different for people on minimum wage, but there is no person in my current team of 50 people that is on minimum wage. The only time I was given an option about a salary sacrifice pension was when a company that I worked for first introduced them. For every new company that I have joined, that’s how they have been set up.

NI, whatever. It’s a stealth tax. I’m a lifelong Labour voter and I don’t think I’ll be voting labour next time.

And remind me again what your solution is?

Get people back into work. Millions are at home that can be working.

Eh? If you get the State Pension, plus your salary sacrifice scheme, you won’t be getting pension credits.

And…. How?
im not disagreeing, just wondering what your exact solution is.

My son was offered a public sector job with 24% employer pension contribution
Stuff of dreams

I'm a pensioner, presumably I funded the previous generation of pensioners if that is how it goes. I never fumed about it and I still pay some tax.

That’s the point, people will just opt of paying into salary sacrifice. So yes, they can get pension credit.

My mum is mortgage free and gets benefits including pension credits. I’m happy for her, she lives very well on the state. I’m not happy for other people though. So I might as well join them.

Make it harder to get PIP.

It’s almost universally accepted now that it’s too easy to get PIP, especially after Covid since face to face interviews have stopped for many, so things like getting PIP for anxiety is easier.

My mum gets PIP, the process has changed massively.

The state spends far too much, we have a number of insane uncapped liabilities baked into our welfare and benefits system that means we’re spending the best part of £400bn on welfare, benefits and pensions alone.

These entitlements only worked in a country which achieved 2-3% growth a year, a goal which is completely unachievable if you keep ratcheting taxes up and strangling private enterprise in red tape.

Its growth or slowly going bust - the only two options.

Live in luxury?

You do realise that you are a fair bit better off than the average pensioner total income already? And that a third of pensioners live in fuel poverty. And that most started work at 14 or 15 meaning a 50 year working life of paying into the system with less than 5% having access to the higher levels of education?

You may know some well off pensioners but less that 10% have incomes high enough to pay the higher rate of tax. The double/triple lock was introduced because we had the poorest pensioners in Europe and huge numbers living in absolute poverty.

But facts seem to be optional when talking about this subject. Personally I’d love to know how all the pensioners known by mumsnetters seem to go on five cruises a year, have 15 bedroom houses and five cars when less than ten percent manage to hit the 40% tax bracket and they are mostly public sector senior roles.

If you did the sums you would see that even if this proposal is real, it will make very little difference to your pension contributions as its only on one bit of the salary sacrifice model.

It’s absolutely not subject to income tax when you pay in. (Unless you are looking to put in ridiculous amounts well beyond the means of most people.)

You received benefits to your pension that are being taken away from the current working people.

Full state pension means you won’t get pension credit
The bar is incredibly low

It’s no going to be limited to people
who put obscene amounts in. It will also target people putting in £2000 per annum
in.

Thanks

Full state pension is just that. There are no extra benefits in paying national insurance contributions

You meanwhile will be getting employer contributions to your private pension that @LBFseBrom wont have had the benefit of. These only became fully mandatory in 2018. Lucky you !

( that’s before we even touch on free childcare, mortgage interest help through unemployment, etc )

Surely Rachel Reeves couldn’t be so stupid as to further negatively impact private sector pensions without addressing the elephant in the room - the exceptionally generous tax payer funded public sector pensions.

No, salary sacrifice only affects the NI element. Even those who pay into a pension without the benefit of a salary sacrifice scheme at the moment get full tax relief on their contributions. That won’t change. Hence why your point 2 is currently wrong, and will continue to be wrong if the proposal is implemented.

In the words of Ian Hislop, who doesn’t love a bit of pre-budg!!

The vast majority of taxes are paid by the private sector.

You really have no idea what pension @LBFseBrom had. It could be DB. You’re making an assumption.