Tories campaigning to remove the childcare maximum income threshold

[FlakyPastries]

Kemi Badenoch has announced that the Tories want to remove the upper income threshold on childcare.

This means all working families will be able to claim it, including those earning over £100k.

Do you agree with this policy?

My baby’s nursery charges £30,000 and the free hours and tax free childcare is worth around £15,000 - so this is quite a significant benefit for those currently unable to claim.

The tax benefits are the same whether DC or DB. That wasn't the PP's point and you know it. The point was that the public sector DB schemes are gold plated in terms of virtually zero risk and far higher compared with employee contributions than a private sector scheme.

Private sector pensions may mostly be DC now (not all though) but many current pensioners have a DB even if private.

It was my point. Public sector pensions aren’t gold plated enough that their recipients need to worry about paying IHT on the money they’re too mean to spend.

Yes average private sector pension for current pensioners is £3000 to £5000 a year. For current ex public sector pensioners £8000 to £100000.

Private sector did not have to contribute to pensions in the past. Some employers did, but others did not. Now employers have to contribute the gap should lessen.@

Where did those figures come from? An average is a single figure, not a range.

2 people retire today. Both worked 40 years on the UK average salary. One person had the average DB public sector pension, one had the average DC private sector pension.

DB pensioner gets an occupational pension of about £28k, which added to the state pension gives about £40k a year.

DC pensioner gets about £14k occupational pension and £12k state giving £26k. And so yes let’s concentrate on hammering the DC pensions. If Kemi was concerned about people putting too much into private pensions she could reduce the annual limit of contributions.

Again, what’s the source of those figures?

The two thirds final salary has long gone in the public sector.

Have you just produced those figures out of thin air? People i know with nhs pensions will get nowhere near that.

For new/recent starters, yes, but they still exist for "legacy" employees who've worked in the PS for a few decades. It'll be a while before no new retirees don't have at least some/part of their pension/lump sum based on old final salary principles.

No
we can lose the cliff edge without giving money to the rich who she is sucking up to

Well, it's based on averages, and also on things like whether full time or part time, wage levels etc. So it's quite possible (and likely) that lots will have lower pensions and lots will have higher pensions. That's how averages work.

Maybe the "people you know" weren't relatively high earners or maybe they worked part time, or maybe for relatively few years within the NHS out of their total working life, etc.

No one would expect a part time HCA to get that kind of NHS pension upon retirement, but in proportion to their wages during their working time, it will be relatively higher than if they worked on similar wages for similar hours in the private sector. But, say, a qualified, full time nurse, having worked in the NHS for a few decades will be receiving that kind of pension, if not more, depending on banding etc. A GP, dentist, or consultant will be getting a pension of double or treble those figures.

AI which scrapes averages from different sources hence the range.

Yes, some of their pension will be based on the old scheme but certainly not all of it. The people i know are relatively senior. They are not going to be getting 70 percent of their final salary.

Yes of course DB pensions still exist for older people who paid into them. It was a legal contract, so they still need to be paid.
A private insurance company years ago tried to move it's private db pensioners onto a DC pension, and lost a court case so had to pay out. The court confirmed once you have paid into a db pension under certain terms and conditions, they have to be honoured.

But dB public sector pensions are closed. So there is no point going on about them. And the average public sector pension currently being paid to pensioners is between £8k and £10k, so far less than the well off people you know. But everyone on MN claims to be very well off with enormous pensions.

I wasn't talking about everyone who ever had young children, I was talking of people who were affected by the tax cliff edge but who would not benefit from a change in policy because they no longer require childcare.

Well apparently it is true and a lot of the super rich have left, as reported by the GUARDIAN!
“For better or worse, the data shows a clear trend; an analysis of Bloomberg’s Billionaires Index has found that super-rich UK residents worth a combined £121bn have either left or loosened ties with UK since the Labour government came to power in 2024. This represents more than half of all billionaire wealth”

So yes, get ready to pay more tax EVERYONE, especially the squeezed middle. So if Kemi proposes some stuff to bring a few back, I don’t actually mind, at this point.

I don’t have young children anymore but looking at the birth rate and house prices I am more than happy to let everyone with young children get some free childcare. In my time, you could get a house for 600k in London and a nursery place for £50. Now it is over 1 million for the same house and £100 a day for the same nursery, not to mention the increase in food and energy prices. If we want this country to thrive, we have to invest in the next generation, above all else.

Defined benefit public sector salaries are not closed. They still exist to new starters. Are you confused by career average and final salary?

@Constantrunner

And the average public sector pension currently being paid to pensioners is between £8k and £10k

Hardly surprising when lots of them were either low earners, or part timers, or only worked for part of their working life. The NHS, for example, employs far more domestic staff, HCAs, admin staff than it does doctors and nurses, so the resultant pensions will be skewed towards the lower earners.

It means nothing until put into context. The full time workers, on average wages or higher, working for a decent proportion of their working life, will be on decent pensions.

Yes, finally someone with sense. We need to stop the politics of jealously, hate and spite and bring in new policies that will grow the economy, and if that means some people do better than others, then so be it - it's worth doing if, generally, the average person ends up better off due to lower taxes, higher growth, more jobs, etc etc.

The pay a 40% inheritance tax on worldwide wealth if you lived in the UK in the last 10 years type thinking really was bonkers. I wonder who came up with that one! What did they actually think would happen?

The NHS is 1/54th career average which is incredibly generous compared to private sector pensions.

They don't think, that's the problem. They're blinded by their hate, spite and envy.

This is 100% the right thing to do.

Anyone who praises the Scandinavian model should know that this is how it is in my native Sweden. Not a big fan of the Tories in general but this they have got right (and some other things too) and I'm happy to acknowledge good policies.