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Post by gramsky on Sept 20, 2024 16:24:49 GMT
I have read in several places that the 25% tax free lump sum on pension payouts is threatened in the autumn bbudget.As I am still working past retirement age this could have a big impact on when I should retire to if still possible take advantage of this. But if the Govetnment do change it, when would it be implemented, either directly after the budget or at the start of the next financial year?
Does anyone out there have any knowledge as to how difficult it would be to impose this immediately after the budget?
It could be devastating for someone who is about to retire and has already committed that money to thier retirement plans.
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keitha
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Post by keitha on Sept 20, 2024 17:11:35 GMT
I would guess at the start of the next tax year.
Can you imagine to outcry
you retire on 29/10 and can take £100,000 tax free
your friend retires 31/10 and has to pay 40% tax on his £100,000
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Post by mostlywrong on Sept 20, 2024 17:51:36 GMT
This Government has a huge majority. If it wanted to increase VAT from 20% to, say, 25% it could do so from midnight on the 30th.
The mood music probably indicates that the so-called sin taxes will be sharply increased from midnight: booze, baccy and fuel taxes.
Anything and everything else is up for grabs. And that includes pensions.
However, one of the reasons for moving the Budget from March to the Autumn was because it takes time to tease out the legislation and allow the financial bodies to sort out the issues in time for the start of the new tax year on April 6th.
If the Chancellor enacted something complex (and I consider anything to do with pensions to be complex) I expect that it will be for the new tax year.
But I am not the Chancellor.
If your plans would be "devastated", it might be best to grab the cash and run!
MW
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keitha
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Post by keitha on Sept 20, 2024 18:37:43 GMT
I can remember taxes on alcohol and fuel being changed from "6 o'clock tonight"
I think it was dome with tobacco duty as well
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Post by gramsky on Sept 20, 2024 18:49:22 GMT
If you need to give 4 weeks notice to your employer to retire it is difficult to take the money and run by end of October!
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Post by gramsky on Sept 20, 2024 18:51:32 GMT
I can remember taxes on alcohol and fuel being changed from "6 o'clock tonight" I think it was dome with tobacco duty as well Not quite the same as pension tax is it! All thet needs to happen is for the off license to put up prices to suit to cover the extra tax that they collect for the Government. And this thread is about pensions not booze and fags.
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Post by mostlywrong on Sept 20, 2024 19:16:25 GMT
If you need to give 4 weeks notice to your employer to retire it is difficult to take the money and run by end of October! A few weeks ago, I asked on here whether anyone had experience of the last change to the pension rules because I had heard, on the grapevine, that the changes were causing problems within the pension industry.
The Budget headline was "pension tax abolished" but the reality was somewhat different once one delved into the changes.
No-one on here responded. However, my contact maintains that there are still problems, and they are causing delays in processing pension claims, but did not have time to elaborate before my cousin whipped him away to talk to other members of the family rather than just me!
MW
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michaelc
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Post by michaelc on Sept 20, 2024 19:23:43 GMT
Suggestion in The Telegraph that one change could be to move "early retirement" from 55 to 60. archive.ph/cXo6v |
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Post by gramsky on Sept 20, 2024 19:30:37 GMT
Suggestion in The Telegraph that one change could be to move "early retirement" from 55 to 60. archive.ph/cXo6vHow does that affect the 25% tax free lump sum?
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agent69
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Post by agent69 on Sept 20, 2024 19:46:40 GMT
I can remember taxes on alcohol and fuel being changed from "6 o'clock tonight" I think it was dome with tobacco duty as well And this thread is about pensions not booze and fags. Steps back in amazement.
A thread on an internet forum that goes off message.
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michaelc
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Post by michaelc on Sept 20, 2024 20:14:28 GMT
Suggestion in The Telegraph that one change could be to move "early retirement" from 55 to 60. archive.ph/cXo6vHow does that affect the 25% tax free lump sum? Another 5 years before you can claim it.
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keitha
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Post by keitha on Sept 20, 2024 20:37:37 GMT
I can remember taxes on alcohol and fuel being changed from "6 o'clock tonight" I think it was dome with tobacco duty as well Not quite the same as pension tax is it! All thet needs to happen is for the off license to put up prices to suit to cover the extra tax that they collect for the Government. And this thread is about pensions not booze and fags. And with pension lump sums she could say "any lump sum pension payment after today is subject to income tax at the appropriate rate" of course what we need to remember is the rumours of the tax free lump sum being done away with are just that, and some may say "oh well that's not too bad" if she slaps a 10% tax on it.
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agent69
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Post by agent69 on Sept 20, 2024 20:46:49 GMT
How does that affect the 25% tax free lump sum? Another 5 years before you can claim it. How would that benefit the government?
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michaelc
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Post by michaelc on Sept 20, 2024 20:57:38 GMT
Another 5 years before you can claim it. How would that benefit the government? Good question.
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keitha
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Post by keitha on Sept 20, 2024 21:55:02 GMT
How would that benefit the government? Good question. You have to work 5 years longer paying tax and NI. and I understand a fair number of people have started taking pension at 55 and by 65 have withdrawn and spent it all
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