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Another Idiotic NHS reform on Pensions

Discussion in 'General Discussion' started by SirGalahad, 8 Jul 2019.

  1. JohnD

    JohnD

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    On the subject of tax rebates for pension contributions, the reason why the money from your earnings that you pay into your pension is getting tax relief, is that it will be taxable when you draw it out.

    Pensions are often called "deferred pay" so you should only be taxed on it once.

    This brings the added advantage that if you were paying, say, 20% or 40% tax when you were working, and have a small pension, you might pay a lower rate, or no tax at all, when you retire. This helps the worse-off members of society, which many of us consider to be a good thing.

    if you are rich and have a large pension, however, you may continue to pay a higher rate when you retire, so you will no longer get that benefit, and you may conclude that the tax treatment of pensions has not been designed to help the rich any more.

    If you believe that the purpose of pensions is to reduce the risk of old people living in poverty, you may consider that the tax regime does not need to be designed to help the rich.

    If you are rich you may grumble about that, as is your right.
     
  2. motorbiking

    motorbiking

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    According to my pension statement 1.3m buys 36k index linked. I do recognise I have other options.

    Don’t assume the young and rich don’t make it on merit. In my previous job I had several people in their late 20s and early 30s earning over 150k working in my firm. All brought in huge revenue through very hard work.
     
  3. Notch7

    Notch7

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    Ive just listened to a doctor saying he feels the tax chabges have been mismanaged.

    He had a £10k bill last year and a £50k tax bill this year. He had to remortgage his house to pay it.

    An accountant said she had client that earned an extra £5k due to a project he did in additional to his normal salary. His tax liability due to that extra work was £13,5k

    Because of the complicated tax system, most of the doctors and even their accountants didnt know these big tax bills were looming and didnt plan for them.

    I realise senior doctors and consultants earn a great deal, but I would prefer a surgeon operating on me to be highly skilled and paid accordingly.


    The NHS isnt doing to well for staffing. Nurses and Doctors dont get uni grants so there isnt enough incentive to choose it as a career and now at the other end, senior doctors are planning to go part time.
     
  4. JohnD

    JohnD

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    it's a defect in the NHS pension design.

    I wonder who's in charge of it?
     
  5. motorbiking

    motorbiking

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    The reason they are facing these big bills AFAIU is because they have defined benefits pensions. For most this will be largely a final salary or avg over period scheme. Increasing your annual earnings, increases the pension payout. For the pension to pay out the pot has to be larger, larger pot equates to increasing of contribution and is subject to tax caps as per my own example.
     
  6. JohnD

    JohnD

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    It should be redesigned. Add the facility to stop contributions when the allowance is reached, or if necessary for other purposes, and divert the funds into pay or benefits.

    There are "top hat" pension schemes applied to the millionaire execs in many companies, and not open to the plebs, which fatten up the pension in order to conceal the size of total compenation package. I'm sure they will already have worked out a solution.
     
  7. motorbiking

    motorbiking

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    Its not easy though for an employer to enable such flexibility. Most on defined contribution schemes decide at the start how much they want to pay in and many won't know precisely how much they will earn. Particularly if payments are commission.
     
  8. JohnD

    JohnD

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