How robust are the banks nowadays as I noticed that my savings with Marcus have gone over the £85000.00 guarantee threshold is it worth moving some to get it below that amount
If Goldman Sachs go pop then we are all in trouble!
Sticking to larger financial organisations mitigates the risk (however small) rather than depositing with challenger banks. All deposits with NS&I are guaranteed but their rates are not the best (apart from the 6.2% that was available for a brief period last year).
How robust are the banks nowadays as I noticed that my savings with Marcus have gone over the £85000.00 guarantee threshold is it worth moving some to get it below that amount
If Goldman Sachs go pop then we are all in trouble!
Sticking to larger financial organisations mitigates the risk (however small) rather than depositing with challenger banks. All deposits with NS&I are guaranteed but their rates are not the best (apart from the 6.2% that was available for a brief period last year).
Might have been said about Lehmans ...
True - but 17 years on the stress tests banks have to subject to should prevent a repeat (based on all known current factors).
How robust are the banks nowadays as I noticed that my savings with Marcus have gone over the £85000.00 guarantee threshold is it worth moving some to get it below that amount
If Goldman Sachs go pop then we are all in trouble!
Sticking to larger financial organisations mitigates the risk (however small) rather than depositing with challenger banks. All deposits with NS&I are guaranteed but their rates are not the best (apart from the 6.2% that was available for a brief period last year).
Might have been said about Lehmans ...
True - but 17 years on the stress tests banks have to subject to should prevent a repeat (based on all known current factors).
That was my first point. But I wouldn't pick out Goldmans. Chase would be my pick for a rock solid bank from the digital banks.
How robust are the banks nowadays as I noticed that my savings with Marcus have gone over the £85000.00 guarantee threshold is it worth moving some to get it below that amount
If Goldman Sachs go pop then we are all in trouble!
Sticking to larger financial organisations mitigates the risk (however small) rather than depositing with challenger banks. All deposits with NS&I are guaranteed but their rates are not the best (apart from the 6.2% that was available for a brief period last year).
Might have been said about Lehmans ...
True - but 17 years on the stress tests banks have to subject to should prevent a repeat (based on all known current factors).
That was my first point. But I wouldn't pick out Goldmans. Chase would be my pick for a rock solid bank from the digital banks.
I agree - I only mentioned Goldmans because @Valianterith cited Marcus.
How robust are the banks nowadays as I noticed that my savings with Marcus have gone over the £85000.00 guarantee threshold is it worth moving some to get it below that amount
I've spread my savings around across about 6 banks - none of them very close to the £85k FSCS protection limit - but figure it's safer that way. I've often wondered where multi-millionaires that easily exceed the upper limit put their money, other thjan offshore of course!
I always say the the UK Government will do all they can to shore up a UK registered bank, even going to the extremes of buying half of it & then selling it at a great loss. I wouldn't worry if I had £90k in a UK Bank. Maybe not wise having £200k in a single institution, but then again unless its there very short term its best to do something else with most of it.
I always say the the UK Government will do all they can to shore up a UK registered bank, even going to the extremes of buying half of it & then selling it at a great loss. I wouldn't worry if I had £90k in a UK Bank. Maybe not wise having £200k in a single institution, but then again unless its there very short term its best to do something else with most of it.
Or in the case of Halifax, not shoring it up, but conning Lloyds into buying it, and trying to shore it up for them. The worst decision ever made in British Financial history……
Although ultimately had to shore up Lloyds, after the Halifax debts were sinking Lloyds. But, hey the government eventually made a profit. The Lloyds share holders were completely robbed and sent bust by Eric Daniel’s / Gordon Brown.
I always say the the UK Government will do all they can to shore up a UK registered bank, even going to the extremes of buying half of it & then selling it at a great loss. I wouldn't worry if I had £90k in a UK Bank. Maybe not wise having £200k in a single institution, but then again unless its there very short term its best to do something else with most of it.
Or in the case of Halifax, not shoring it up, but conning Lloyds into buying it, and trying to shore it up for them. The worst decision ever made in British Financial history……
Although ultimately had to shore up Lloyds, after the Halifax debts were sinking Lloyds. But, hey the government eventually made a profit. The Lloyds share holders were completely robbed and sent bust by Eric Daniel’s / Gordon Brown.
Precisely.
Banks will always be shored up. To my mind they are like any other PLC and should be treated as such.
I've got a fair amount (well to me it is) which I like everyone could take out 25% with the general election up, what are you expecting to happen re pension and there associated cash free lump sum after a change of government? Don’t want this to turn into a political debate, that’s why I didn’t ask in the election thread. Apparently there’s an article in either the times or Sunday times on this matter but it’s behind a pay wall.
I have asked my financial adviser this question and as yet he hasn’t responded.
I've got a fair amount (well to me it is) which I like everyone could take out 25% with the general election up, what are you expecting to happen re pension and there associated cash free lump sum after a change of government? Don’t want this to turn into a political debate, that’s why I didn’t ask in the election thread. Apparently there’s an article in either the times or Sunday times on this matter but it’s behind a pay wall.
I have asked my financial adviser this question and as yet he hasn’t responded.
I've got a fair amount (well to me it is) which I like everyone could take out 25% with the general election up, what are you expecting to happen re pension and there associated cash free lump sum after a change of government? Don’t want this to turn into a political debate, that’s why I didn’t ask in the election thread. Apparently there’s an article in either the times or Sunday times on this matter but it’s behind a pay wall.
I have asked my financial adviser this question and as yet he hasn’t responded.
The plain answer.....no-one knows.
I very much doubt they would mess around with the 25% TFC allowance. It is now capped at £268, 275 so "25%" is a bit of a misnomer.
The Labour Party have said that they would re-introduce the Lifetime Allowance, but they've not announced at what amount. In any case, it is virtually unheard of changes to be applied retrospectively & in the past protections have been put in place to secure what you currently have.
The big question over the years is will tax relief be altered, and it has been mooted that even under the Tories it was going to be changed to a level figure for all.....either 25% or 30%.
The one thing I would ask any Labour campaigner who knocked on my door is.....why can't we all have our own individual tax unregistered scheme like Kier Starmer has. Look it up. Oh the hypocrisy.
I can see them bringing back in the LTA, also reducing the Tax Free element (although like Golfie says it isn't really 25% anymore), the latter is an easy win for them. Moree tax collected on drawdown.
Tax relief on Pension is almost a given to change, I can see a flat rate for all, 25% I suspect. Although they'll have to untangle the salary sacrifice as well I presume.
Either way, I'm banking on being worse off. I'm still 5.5 years from being able to draw, if I was at that age now I'd likely take out the 25% now, in full.
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
How robust are the banks nowadays as I noticed that my savings with Marcus have gone over the £85000.00 guarantee threshold is it worth moving some to get it below that amount
I've spread my savings around across about 6 banks - none of them very close to the £85k FSCS protection limit - but figure it's safer that way. I've often wondered where multi-millionaires that easily exceed the upper limit put their money, other thjan offshore of course!
The richest will often have a family office with people employed to manage and invest their wealth and a CFO that will have a Treasury policy. That typically means only placing money with institutions who are rated strongly and not having more than a certain % with any one institution. The main UK banks are generally awash with cash currently given people saved lots through COVID and took things like bounce back loans they never used, plus at the same time banks did not lend as much. Add to that far more stringent stress testing and Tier One capital rules. I would always still spread my cash around though!
How robust are the banks nowadays as I noticed that my savings with Marcus have gone over the £85000.00 guarantee threshold is it worth moving some to get it below that amount
I've spread my savings around across about 6 banks - none of them very close to the £85k FSCS protection limit - but figure it's safer that way. I've often wondered where multi-millionaires that easily exceed the upper limit put their money, other thjan offshore of course!
The richest will often have a family office with people employed to manage and invest their wealth and a CFO that will have a Treasury policy. That typically means only placing money with institutions who are rated strongly and not having more than a certain % with any one institution. The main UK banks are generally awash with cash currently given people saved lots through COVID and took things like bounce back loans they never used, plus at the same time banks did not lend as much. Add to that far more stringent stress testing and Tier One capital rules. I would always still spread my cash around though!
The wealthy DID panic in the 2008 crash and many tried to withdraw cash funds - literally sometimes in cash.
Of course ‘investments’ are not protected in the same way.
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
Due to your age I'd definitely look at taking the money from your pension rather than your ISA.
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
Due to your age I'd definitely look at taking the money from your pension rather than your ISA
Why are you so firm on this advice? With money in a scheme protected from inheritance tax, the advice I received was to use all cash reserves and ISA's before withdrawing from your pension pot.
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
Due to your age I'd definitely look at taking the money from your pension rather than your ISA
Why are you so firm on this advice? With money in a scheme protected from inheritance tax, the advice I received was to use all cash reserves and ISA's before withdrawing from your pension pot.
If you make it to 75, whilst it remains free from inheritance tax, it would then be taxed at the beneficiaries marginal rate if they draw it. So a lot of moving parts as to whether it's best to or not I would say depending on yours and your beneficiaries positions. If your beneficiaries for instance are 45% tax payers it would make more sense to Pay IHT at 40%.
Fcuk em. We all have worked hard to earn our money, to provide for our future but the one thing I have learned over many years is that government will go after every last penny they can and then piss it up the wall on some stupid scheme or other.
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
Due to your age I'd definitely look at taking the money from your pension rather than your ISA
Why are you so firm on this advice? With money in a scheme protected from inheritance tax, the advice I received was to use all cash reserves and ISA's before withdrawing from your pension pot.
ISA's are totally tax free. Pensions only 25%. Take that out & the rest is taxed at your marginal rate. With the State Penson now virtually using up your Personal Alowance then everyone will pay at least 20% tax on anything taken after the TFC. Why not use your ISA's for retirement planning instead.
But again, everyone's circumstances are different & what's right for one might not be right for someone else.
As @Rob7Lee says, after age 75 the money is taxed at the beneficiaries marginal rate.
Take out the 25% tax free and re-invest in your ISA.....which are then also transferable tax-free to your spouse on death. Then leave the remaining pension fund to your dependents.
But as discussed above, I wouldn't put it past the next Labour Government to change the current set up & tax the fund on death.
I've got a fair amount (well to me it is) which I like everyone could take out 25% with the general election up, what are you expecting to happen re pension and there associated cash free lump sum after a change of government? Don’t want this to turn into a political debate, that’s why I didn’t ask in the election thread. Apparently there’s an article in either the times or Sunday times on this matter but it’s behind a pay wall.
I have asked my financial adviser this question and as yet he hasn’t responded.
The plain answer.....no-one knows.
I very much doubt they would mess around with the 25% TFC allowance. It is now capped at £268, 275 so "25%" is a bit of a misnomer.
The Labour Party have said that they would re-introduce the Lifetime Allowance, but they've not announced at what amount. In any case, it is virtually unheard of changes to be applied retrospectively & in the past protections have been put in place to secure what you currently have.
The big question over the years is will tax relief be altered, and it has been mooted that even under the Tories it was going to be changed to a level figure for all.....either 25% or 30%.
The one thing I would ask any Labour campaigner who knocked on my door is.....why can't we all have our own individual tax unregistered scheme like Kier Starmer has. Look it up. Oh the hypocrisy.
According to The Telegraph his DPP pension, awarded by the Conservative government, is worth £700K. He’s also said that it wouldn’t be exempt from any changes a Labour government do bring in.
It’s a very good sum, but you’d think it was multi-millions the way it is described and is it better/worse than many DB schemes that were around previously (a few still are)? Is there something else I’m missing here? Your employer provides you with a pension. Do you turn it down?
I've got a fair amount (well to me it is) which I like everyone could take out 25% with the general election up, what are you expecting to happen re pension and there associated cash free lump sum after a change of government? Don’t want this to turn into a political debate, that’s why I didn’t ask in the election thread. Apparently there’s an article in either the times or Sunday times on this matter but it’s behind a pay wall.
I have asked my financial adviser this question and as yet he hasn’t responded.
The plain answer.....no-one knows.
I very much doubt they would mess around with the 25% TFC allowance. It is now capped at £268, 275 so "25%" is a bit of a misnomer.
The Labour Party have said that they would re-introduce the Lifetime Allowance, but they've not announced at what amount. In any case, it is virtually unheard of changes to be applied retrospectively & in the past protections have been put in place to secure what you currently have.
The big question over the years is will tax relief be altered, and it has been mooted that even under the Tories it was going to be changed to a level figure for all.....either 25% or 30%.
The one thing I would ask any Labour campaigner who knocked on my door is.....why can't we all have our own individual tax unregistered scheme like Kier Starmer has. Look it up. Oh the hypocrisy.
According to The Telegraph his DPP pension, awarded by the Conservative government, is worth £700K. He’s also said that it wouldn’t be exempt from any changes a Labour government do bring in.
It’s a very good sum, but you’d think it was multi-millions the way it is described and is it better/worse than many DB schemes that were around previously (a few still are)? Is there something else I’m missing here? Your employer provides you with a pension. Do you turn it down?
I think the initial issue was his pension didn’t have an LTA when everyone else’s did, Labour voted against the removal of the limit (which had they of won would have meant Starmer still kept his no limit). All a storm in a tea cup, but either everyone should have a limit or no one. Keep it simple. Personally I’d like the no limit, but then I would say that as helps me.
I've got a fair amount (well to me it is) which I like everyone could take out 25% with the general election up, what are you expecting to happen re pension and there associated cash free lump sum after a change of government? Don’t want this to turn into a political debate, that’s why I didn’t ask in the election thread. Apparently there’s an article in either the times or Sunday times on this matter but it’s behind a pay wall.
I have asked my financial adviser this question and as yet he hasn’t responded.
The plain answer.....no-one knows.
I very much doubt they would mess around with the 25% TFC allowance. It is now capped at £268, 275 so "25%" is a bit of a misnomer.
The Labour Party have said that they would re-introduce the Lifetime Allowance, but they've not announced at what amount. In any case, it is virtually unheard of changes to be applied retrospectively & in the past protections have been put in place to secure what you currently have.
The big question over the years is will tax relief be altered, and it has been mooted that even under the Tories it was going to be changed to a level figure for all.....either 25% or 30%.
The one thing I would ask any Labour campaigner who knocked on my door is.....why can't we all have our own individual tax unregistered scheme like Kier Starmer has. Look it up. Oh the hypocrisy.
According to The Telegraph his DPP pension, awarded by the Conservative government, is worth £700K. He’s also said that it wouldn’t be exempt from any changes a Labour government do bring in.
It’s a very good sum, but you’d think it was multi-millions the way it is described and is it better/worse than many DB schemes that were around previously (a few still are)? Is there something else I’m missing here? Your employer provides you with a pension. Do you turn it down?
I'd like to know what the annual payout is. It will no doubt be index linked and have a spouse/widows element. The government tends to price these at 20x, when, in the market, 30x or more would be a mark to market. So '700k' could really be 1.2m to anyone in a real market.
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
Due to your age I'd definitely look at taking the money from your pension rather than your ISA.
The article wasn't bad by ST Money standards (they're usually mis-informed or just puff pieces).
Key things that were mentioned:
- apparently, Rachel Reeves has ruled out an emergency summer budget - in any case, anything big would require legislation and take time - generally, these things are then timed to come in in the next tax year, for simplicity - therefore, the overall advice, which Golfie will certainly agree with, is not to make any quick decisions on pensions, based on speculation
I wish governments would be principled on this. Ever since Gordon Brown raided pensions, it's been a free for all as politicians have worked out that people have no idea how much they've been ripped off over the years.
For me, I would limit the amount of tax efficiency on the money going in but a cap is simply immoral as it punishes prudent investment decisions.
It was notable last week that one of the shadow Treasury spokesman carefully caveated, "We won't raise VAT, income tax and national insurance," with the rider, " .. for working people."
So that doesn't rule out raids on dividends, pensions, savings tax, stamp duty, capital gains, including on your main home, ISAs, EIS, VCTs, entrepreneurs' relief, employers' NI, corporation tax, etc.
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
Due to your age I'd definitely look at taking the money from your pension rather than your ISA
Why are you so firm on this advice? With money in a scheme protected from inheritance tax, the advice I received was to use all cash reserves and ISA's before withdrawing from your pension pot.
If you make it to 75, whilst it remains free from inheritance tax, it would then be taxed at the beneficiaries marginal rate if they draw it. So a lot of moving parts as to whether it's best to or not I would say depending on yours and your beneficiaries positions. If your beneficiaries for instance are 45% tax payers it would make more sense to Pay IHT at 40%.
A question. Am I correct in saying that a pension pot would be passed on to my beneficiaries tax free and it would only be taxed when they drew down from the pot? Or have I got this totally wrong and it is taxed at their marginal rate at the time of death. A second question. If there was still an element of 25% tax free within the pot, would this protection be retained by the beneficiary?
Thanks for your input everyone. I suppose I’m in a slightly different predicament than most on here, in so much as my pension won’t get much higher than it is now as I can only pay a little amount in year as I’m retired, also if things go to plan I won’t need to raid my pension fund for around six to 7 years time (I’m 71 at the moment), I'm investing into our ISA’s to the maximum value I can as the company I owned are repaying a buy back loan for my shares which should be paid up in around 4 years, (I’ve already paid my entrepreneurs tax to the tax man in January).
I have a considerable out lay in the next 18 months which my ISA’s were meant to be covering, but by luck the tax free money I can take out of my pension is roughly equivalent to my upcoming outlay. So it’s a case of deciding what is the best way for to go forward for me / us, think a phone call to financial advisor will be happening early next week.
Due to your age I'd definitely look at taking the money from your pension rather than your ISA
Why are you so firm on this advice? With money in a scheme protected from inheritance tax, the advice I received was to use all cash reserves and ISA's before withdrawing from your pension pot.
If you make it to 75, whilst it remains free from inheritance tax, it would then be taxed at the beneficiaries marginal rate if they draw it. So a lot of moving parts as to whether it's best to or not I would say depending on yours and your beneficiaries positions. If your beneficiaries for instance are 45% tax payers it would make more sense to Pay IHT at 40%.
A question. Am I correct in saying that a pension pot would be passed on to my beneficiaries tax free and it would only be taxed when they drew down from the pot? Or have I got this totally wrong and it is taxed at their marginal rate at the time of death. A second question. If there was still an element of 25% tax free within the pot, would this protection be retained by the beneficiary?
You are correct in saying that upon death (at any time) your pension "pot" is inherited tax free by the beneficiaries as DC pensions do not form part of your Estate.
However, once in the hands of the beneficiaries the following rules apply -
If you were aged under 75 at the time of your death then any monies subsequently taken out is tax free, be it a lump sum or income.
If you were 75 or over at the time of your death then any money taken out by the beneficiaries would be taxed at their marginal rate.
So the nonsense that Pensions are IHT free is a bit of a red herring because if you are 75+ then any money taken out, 25% or not, is taxable. Hence why I said to a PP that it's a good idea to take your 25% when you can - especially as ISA's are totally tax free at any given point.
I've got a fair amount (well to me it is) which I like everyone could take out 25% with the general election up, what are you expecting to happen re pension and there associated cash free lump sum after a change of government? Don’t want this to turn into a political debate, that’s why I didn’t ask in the election thread. Apparently there’s an article in either the times or Sunday times on this matter but it’s behind a pay wall.
I have asked my financial adviser this question and as yet he hasn’t responded.
The plain answer.....no-one knows.
I very much doubt they would mess around with the 25% TFC allowance. It is now capped at £268, 275 so "25%" is a bit of a misnomer.
The Labour Party have said that they would re-introduce the Lifetime Allowance, but they've not announced at what amount. In any case, it is virtually unheard of changes to be applied retrospectively & in the past protections have been put in place to secure what you currently have.
The big question over the years is will tax relief be altered, and it has been mooted that even under the Tories it was going to be changed to a level figure for all.....either 25% or 30%.
The one thing I would ask any Labour campaigner who knocked on my door is.....why can't we all have our own individual tax unregistered scheme like Kier Starmer has. Look it up. Oh the hypocrisy.
According to The Telegraph his DPP pension, awarded by the Conservative government, is worth £700K. He’s also said that it wouldn’t be exempt from any changes a Labour government do bring in.
It’s a very good sum, but you’d think it was multi-millions the way it is described and is it better/worse than many DB schemes that were around previously (a few still are)? Is there something else I’m missing here? Your employer provides you with a pension. Do you turn it down?
I'd like to know what the annual payout is. It will no doubt be index linked and have a spouse/widows element. The government tends to price these at 20x, when, in the market, 30x or more would be a mark to market. So '700k' could really be 1.2m to anyone in a real market.
£700k is a very sizeable or for something like 5 years work too 🙂
Got a random £50 credit into our account today from NS&I PB’s. It referenced my wife’s NS&I account number. Rang NS&I and they couldn’t provide any useful information except it was maybe a June prize in early which I doubt seeing as the draw was only today and it normally takes a week or more for the money to come in. Anyone else ever had this happen?
Comments
True - but 17 years on the stress tests banks have to subject to should prevent a repeat (based on all known current factors).
I agree - I only mentioned Goldmans because @Valianterith cited Marcus.
Although ultimately had to shore up Lloyds, after the Halifax debts were sinking Lloyds. But, hey the government eventually made a profit. The Lloyds share holders were completely robbed and sent bust by Eric Daniel’s / Gordon Brown.
Banks will always be shored up. To my mind they are like any other PLC and should be treated as such.
I have asked my financial adviser this question and as yet he hasn’t responded.
I very much doubt they would mess around with the 25% TFC allowance. It is now capped at £268, 275 so "25%" is a bit of a misnomer.
The Labour Party have said that they would re-introduce the Lifetime Allowance, but they've not announced at what amount. In any case, it is virtually unheard of changes to be applied retrospectively & in the past protections have been put in place to secure what you currently have.
The big question over the years is will tax relief be altered, and it has been mooted that even under the Tories it was going to be changed to a level figure for all.....either 25% or 30%.
The one thing I would ask any Labour campaigner who knocked on my door is.....why can't we all have our own individual tax unregistered scheme like Kier Starmer has. Look it up. Oh the hypocrisy.
Tax relief on Pension is almost a given to change, I can see a flat rate for all, 25% I suspect. Although they'll have to untangle the salary sacrifice as well I presume.
Either way, I'm banking on being worse off. I'm still 5.5 years from being able to draw, if I was at that age now I'd likely take out the 25% now, in full.
On a brighter note, Premium bonds on Tuesday!
The richest will often have a family office with people employed to manage and invest their wealth and a CFO that will have a Treasury policy. That typically means only placing money with institutions who are rated strongly and not having more than a certain % with any one institution.
The main UK banks are generally awash with cash currently given people saved lots through COVID and took things like bounce back loans they never used, plus at the same time banks did not lend as much. Add to that far more stringent stress testing and Tier One capital rules.
I would always still spread my cash around though!
But again, everyone's circumstances are different & what's right for one might not be right for someone else.
As @Rob7Lee says, after age 75 the money is taxed at the beneficiaries marginal rate.
Take out the 25% tax free and re-invest in your ISA.....which are then also transferable tax-free to your spouse on death. Then leave the remaining pension fund to your dependents.
But as discussed above, I wouldn't put it past the next Labour Government to change the current set up & tax the fund on death.
https://www.bbc.com/news/uk-politics-65052706
All a storm in a tea cup, but either everyone should have a limit or no one. Keep it simple. Personally I’d like the no limit, but then I would say that as helps me.
Key things that were mentioned:
- apparently, Rachel Reeves has ruled out an emergency summer budget
- in any case, anything big would require legislation and take time
- generally, these things are then timed to come in in the next tax year, for simplicity
- therefore, the overall advice, which Golfie will certainly agree with, is not to make any quick decisions on pensions, based on speculation
I wish governments would be principled on this. Ever since Gordon Brown raided pensions, it's been a free for all as politicians have worked out that people have no idea how much they've been ripped off over the years.
For me, I would limit the amount of tax efficiency on the money going in but a cap is simply immoral as it punishes prudent investment decisions.
So that doesn't rule out raids on dividends, pensions, savings tax, stamp duty, capital gains, including on your main home, ISAs, EIS, VCTs, entrepreneurs' relief, employers' NI, corporation tax, etc.
A second question. If there was still an element of 25% tax free within the pot, would this protection be retained by the beneficiary?
However, once in the hands of the beneficiaries the following rules apply -
If you were aged under 75 at the time of your death then any monies subsequently taken out is tax free, be it a lump sum or income.
If you were 75 or over at the time of your death then any money taken out by the beneficiaries would be taxed at their marginal rate.
So the nonsense that Pensions are IHT free is a bit of a red herring because if you are 75+ then any money taken out, 25% or not, is taxable. Hence why I said to a PP that it's a good idea to take your 25% when you can - especially as ISA's are totally tax free at any given point.