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Post by bernythedolt on Mar 17, 2023 2:31:54 GMT
The scrapping of the LTA will have got a lot of the very well off people and their accountants smiling ..... but not for the obvious reasons. Pension Pots are deemed to be outside of the estate of a person when they die so IHT is not due on the pension pot. Another nice 'loophole' for those that can exploit it. Yes My OH exploits it only to the extent of about £20,000 a year but to me it feels wrong that someone receiving pensions including the state pension can save into a pension There are limits to this though, and, once she stops earning, your OH will only be allowed to contribute £3,600 per annum to a pension scheme (including tax relief). At one time, it was quite common for police officers and a few others to retire at 50 on a good pension... and then return to the office as a fully salaried civilian, where they would begin contributing to the civilian pension scheme, ready to pick up another dollop at 60. I've worked with a few, full of swagger with a beaming smile... basically, they'd beaten 'the system'. Cushy little number, didn't matter if you weren't much good at the civvy work or got the sack (unlikely), you've only got a few years to time-serve, meanwhile, "fill yer boots" with a full salary alongside your decent police pension...
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IFISAcava
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Post by IFISAcava on Mar 17, 2023 10:43:13 GMT
Doctors are a complete and utter red herring. ..... I believe so as well. Remember the G'ment had the same problem with judges and they gave them their own scheme. They are such a red herring that they led this senior NHS consultant to retire at 55? Along with many of my colleagues? With huge numbers of unfilled consultant post with those number rapidly rising? Unless you have suffered the pensions nightmare you probably don't quite understand what a disincentive it was. And before you throw "gold plated pensions" around, pensions is deferred salary which is part of the package (and partly addresses the lower pay from a monopoly employer and was the package deal doctors signed up to). Then, not only has the pension been subject to a nearly three fold increase in contribution rate (6% to 15% of salary), the value has reduced in real terms due to the final salary being reduced by 30% in real terms since 2008 AND they started to tax you each year at 45% on your pension accrual if it is deemed too high (but you can't cut your contributions to reduce it to the allowable amount, and you don't know and can't predict what your accrual is anyway until after the event anyway when the annual tax bill comes) AND because of the change in pension scheme in 2015 and the complex effects of inflation/low salary increases/different dates of assessment you could get negative accrual in one scheme but this was ignored and you paid tax on the positive in the other so you paid tax on non-existent net pension growth across schemes AND if your salary went up then down (eg due to extra hours or responsibilities) you paid tax on the imaginary growth in pension on that period of higher salary but unless you retired within exactly three years of that you never received the extra pension you paid tax on AND if you get too much lifetime pension they were taxing you again at 25% AND you can't opt to take any employers pension contribution as salary instead (even though it is part of your salary package) so that you only pay tax once instead of twice AND the way it all works out is that you end up essentially working for free (or even paying to work) for some of your hours (worse when the AA taper was lower and marginal rates were over 100%). So you cut down to part time hours as who wants to pay to work or pay 80%+ effective tax rates? And then you retire early because who wants to be double taxed on your deferred income? AND you can earn more outside the NHS by multiples. At the end of the day pensions are largely DEFERRED taxation, not a tax free vehicle (other than the tax free lump sum which remains unchanged). There may well have been other targeted ways to sort out the NHS mess, and they did that with judges, but doing nothing was simply not an option if you want to keep the NHS staffed.
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IFISAcava
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Post by IFISAcava on Mar 17, 2023 10:52:26 GMT
So I think complain all you want that doctors are well off - of course they are, although they are already 30% less well off in real terms than 2008
But doctors have options and if you want to keep them in the NHS then you really really really do not want to keep in place the huge financial disincentives that the combination of AA, LTA and intricacies of a DB scheme bring.
AA tax on the way in and sensible pension scheme rules to allow flexibility fixes the problem.
I wouldn't have retired 10 years early from the NHS if the rules now being brought in were in place.
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Post by bracknellboy on Mar 17, 2023 13:35:18 GMT
sure. But an argument is that it is the way the DB scheme works and its lack of flexibility to make choices that avoid such issues that should have been the primary focus. As I mentioned up thread, why on earth be 'forced' into continuing to accrue value ? Why not have the option of freezing one's 'pensionable salary' benchmark, (rather than have it rise with increased hours/position), stopping further personal contributions, and perhaps accompanied by some benefit in kind returned through additional salary reflecting part of the (nominal) 'lost' employer contribution. [in other words, convert some of that missed 'deferred salary' into actual salary]. And that's without thinking very hard about it.
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agent69
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Post by agent69 on Mar 17, 2023 13:43:05 GMT
sure. But an argument is that it is the way the DB scheme works and its lack of flexibility to make choices that avoid such issues that should have been the primary focus. As I mentioned up thread, why on earth be 'forced' into continuing to accrue value ? Why not have the option of freezing one's 'pensionable salary' benchmark, (rather than have it rise with increased hours/position), stopping further personal contributions, and perhaps accompanied by some benefit in kind returned through additional salary reflecting part of the (nominal) 'lost' employer contribution. [in other words, convert some of that missed 'deferred salary' into actual salary]. And that's without thinking very hard about it. How about giving people the option of giving up the DB scheme and moving to money purchase, with employer contribution capped at the average for comparable trades in the private sector?
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agent69
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Post by agent69 on Mar 17, 2023 13:55:48 GMT
So I think complain all you want that doctors are well off - of course they are, although they are already 30% less well off in real terms than 2008 But doctors have options and if you want to keep them in the NHS then you really really really do not want to keep in place the huge financial disincentives that the combination of AA, LTA and intricacies of a DB scheme bring. AA tax on the way in and sensible pension scheme rules to allow flexibility fixes the problem. I wouldn't have retired 10 years early from the NHS if the rules now being brought in were in place. As opposed to the man in the street, who has also seen large real term reductions in pay since 2008, but starting from a much lower level.
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ilmoro
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Post by ilmoro on Mar 17, 2023 14:26:00 GMT
So the answer to why abolish not do something NHS specific was apparently speed. Delay to come up with something better like judges would have lost too many doctors & according to NHS change is already working.
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IFISAcava
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Post by IFISAcava on Mar 17, 2023 14:59:32 GMT
So the answer to why abolish not do something NHS specific was apparently speed. Delay to come up with something better like judges would have lost too many doctors & according to NHS change is already working. It is definitely working. Sadly too late for me.
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IFISAcava
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Post by IFISAcava on Mar 17, 2023 15:02:15 GMT
So I think complain all you want that doctors are well off - of course they are, although they are already 30% less well off in real terms than 2008 But doctors have options and if you want to keep them in the NHS then you really really really do not want to keep in place the huge financial disincentives that the combination of AA, LTA and intricacies of a DB scheme bring. AA tax on the way in and sensible pension scheme rules to allow flexibility fixes the problem. I wouldn't have retired 10 years early from the NHS if the rules now being brought in were in place. As opposed to the man in the street, who has also seen large real term reductions in pay since 2008, but starting from a much lower level. Um - no see this since 2012 (it's worse if you do it from 2008, or extend it to current date). /photo/1 Attachments:Doctors salaries.jfif (82.36 KB)
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IFISAcava
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Post by IFISAcava on Mar 17, 2023 15:08:56 GMT
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Post by IFISAcava on Mar 17, 2023 15:13:52 GMT
sure. But an argument is that it is the way the DB scheme works and its lack of flexibility to make choices that avoid such issues that should have been the primary focus. As I mentioned up thread, why on earth be 'forced' into continuing to accrue value ? Why not have the option of freezing one's 'pensionable salary' benchmark, (rather than have it rise with increased hours/position), stopping further personal contributions, and perhaps accompanied by some benefit in kind returned through additional salary reflecting part of the (nominal) 'lost' employer contribution. [in other words, convert some of that missed 'deferred salary' into actual salary]. And that's without thinking very hard about it. How about giving people the option of giving up the DB scheme and moving to money purchase, with employer contribution capped at the average for comparable trades in the private sector? sure, can renegotiate package, but can't see one aspect separately from rest of package. Pension isn't some sort of nice extra add-on, it's a core part of the compensation package, and if you want to get rid of it will need something else added on rather than just cutting it because some people think it is too high.
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IFISAcava
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Post by IFISAcava on Mar 17, 2023 15:15:47 GMT
sure. But an argument is that it is the way the DB scheme works and its lack of flexibility to make choices that avoid such issues that should have been the primary focus. As I mentioned up thread, why on earth be 'forced' into continuing to accrue value ? Why not have the option of freezing one's 'pensionable salary' benchmark, (rather than have it rise with increased hours/position), stopping further personal contributions, and perhaps accompanied by some benefit in kind returned through additional salary reflecting part of the (nominal) 'lost' employer contribution. [in other words, convert some of that missed 'deferred salary' into actual salary]. And that's without thinking very hard about it. except that the NHS employers just won't do that - I and others asked several times for that. A few trusts did start to offer it, but very haphazard.
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Post by bracknellboy on Mar 17, 2023 15:47:12 GMT
sure. But an argument is that it is the way the DB scheme works and its lack of flexibility to make choices that avoid such issues that should have been the primary focus. As I mentioned up thread, why on earth be 'forced' into continuing to accrue value ? Why not have the option of freezing one's 'pensionable salary' benchmark, (rather than have it rise with increased hours/position), stopping further personal contributions, and perhaps accompanied by some benefit in kind returned through additional salary reflecting part of the (nominal) 'lost' employer contribution. [in other words, convert some of that missed 'deferred salary' into actual salary]. And that's without thinking very hard about it. except that the NHS employers just won't do that - I and others asked several times for that. A few trusts did start to offer it, but very haphazard. understood. But the Govt and the rest of the universe has known about this issue for a number of years. There has been plenty of opportunity for them to have put pressure on the parties to make appropriate changes. That's why I said upthread that the removal of the LTA for the purposes of solving this specific problem (NHS, senior staff) was wrong hammer, wrong nut. Oh, and I still think the LTA needed to be raised regardless, as it was too low.
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Post by bracknellboy on Mar 17, 2023 15:54:54 GMT
So the answer to why abolish not do something NHS specific was apparently speed. Delay to come up with something better like judges would have lost too many doctors & according to NHS change is already working. which is all fine and dandy. Except that this problem has been known about - not just brewing - for a number of years. And last I looked, this same govt. has been in power for all that time (albeit while operating an n+1 policy when it comes to both PMs and Chancellors). So an utter failure to do anything in the past means they got to a point where they were 'forced' to take the least targeted / favourable route at the last minute, and justify it on the need for speed of action. Now, what was that about man power planning in the NHS ? no doubt something radical will have to be done at the last moment as there will be no time to do it the right/proper way. Even though the point of planning is ....... Its almost like this govt. hasn't actually been governing of the last x years and just woken up to half the point of being in power.
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Post by crabbyoldgit on Mar 17, 2023 19:58:14 GMT
So my nextdoor neighbour is a experienced paramedic, out on the beer tonight 6 of his colleagues are having a joint leaving party. Fed up of the unsocial hours , constant poor management only interested in stat chasing and constant pressure to buck shift to another department. Having had a cold eyed look at the reduction in pay for a better life style, they have all walked.
My friends daughter is a nurse , 2 years in from training ,she is the only one still working for the NHS from her student group, in her words the job is not what we were told it would be.
Its called the market economy at work , funny how some politicians who preach the invisible hand mantra suddenly are not so sure about it when works against them. In the true market economy we would pay people in these professions more to retain them and recruit new blood.
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