Hello All, minor correction; I said that the previous labour government reduced the previous lifetime allowance. What I should have said is that they were the first to INTRODUCE the LTA.
These frequent tax code changes are disrupting my long-term investment strategies. Are there ways to structure my investments to be more resilient to potential tax code modifications?
I honestly think America needs a completely restructure of their political system. It is just not working. Trump and Biden being elected out of 300 million people to run the country is evidence for that too.
This is why the US should elect more progressive politicians, who know how to manage budgets and give us (yes, pur country's initials literally spell out that pronoun) much better tax credits in return for better public education and better public healthcare. but since these are nonexistent, my husband and I are being guided to finance our retirement and healthcare through a diversified investment portfolio
@@hasede-lg9hj How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
Throughout the past month, the market has been struggling; in recent weeks, all three indices have experienced losses. Every suggestion to increase my returns before I retire would be very welcomed, as my $400,000 portfolio has decreased by about 20%.
Investors should be especially cautious about their exposure and new purchases in the face of inflation. Obtaining such high yields during a recession is only possible with the assistance of a reputable advisor or competent specialist.
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances
CELIA KATHLEEN MARTEL. is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
In the 1990s I sold pensions on the strenght that the tax free lump sum would pay off most if not all of the mortgage and leave the investor with a pension for life. Most were over a 40 year term plus, I was not alone.
The approach of selling pensions with the promise that a tax-free lump sum would pay off mortgages and provide a lifelong pension was common in the 1990s. However, many factors can affect the outcome, including changes in the housing market and interest rates. It's crucial for investors to seek personalized advice and consider diversified financial strategies to ensure long-term financial stability.
it's vital for investors to seek personalized advice and adopt diversified financial strategies. Working with a knowledgeable financial adviser is crucial for achieving long-term financial stability and freedom.
I'm intrigued by this. I've searched for financial advisers online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I've experimented with a few over the past years, but I've stuck with ‘’Nicole Anastasia Plumlee” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
@@kristinamasters1663 no it’s still 66 but is rising to 67 from April 2026, So if your 66 after April 2026 your retirement date increases incrementally until the birthdates from 6th March 1961 where retirement is 67. My wife born August 1960’state pension age in January 2027 where she will be 66 and 5 months
We are all tired of tax on top of tax on top of tax that is then flittered away on wasted initiatives and burdens that society as a whole does not benefit from…
Hi,great videos,i have been putting all spare savings into my pension for the last 15 years mainly because of this 25%tax free cash,i have just turned 55 and got it last week 90k,the rest can stay invested,me and my partner only work part time now, mortgage paid off 20 years ago,so time to enjoy,in the end you have to spend it,you cant take it with you.👍👍👍(We have put 40k into isa's)
You need it in property, when it doubles in next few years, you can take 75% of the capital gains out, Tax Free as its a loan. Don't put it in a bank 😂depreciating or at 4% soon 😂
The red flag for me was when they kept saying 'we won't tax WORKING people' If they don't time this right pension funds may be devastated over night as all those over 55 simply empty out these funds.
You can drawdown your defined contribution pension leaving the balance invested to grow, taking 25% tax free on each withdrawal, so taking £1k every month only £750 is taxable. This is much more efficient than taking 25% tax free in a lump sum as you are leaving the majority invested.
@@iaing9028 That depends upon if your invested fund performs well or just tracks the economy. I pulled every last penny out and invested it in Tesla (already had TSLA in my stocks&shares ISA & already have Btc & Eth]) and I'm already well up My pension company wanted £15k for the 'Annuity Purchase Fee' then offered my about thirty quid a week forever. I'm already far better off just since last april than I would have been for years of weekly pension payments
I Hit 110k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started last month 2024. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject. thanks to Kimberly Ann Doran for helping me achieve this
Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super.
It would be political suicide if the Labour government did this. They need to sort out the massive taxpayer burden of the disproportionately generous local government and civil service pensions first.
The average local government pension is £3500 a year and it’s paid for by employee contributions from very low wages. Hardly generous. They are also not paid out of taxation but are independently run unlike the civil service.
The NHS pension is linked to the state pension age so most people will barely get back what they paid in anyway by the time state pension becomes around 70
@@reubenjuster627even on the current less generous NHS scheme, if you work for 27 years you get a pension of 50% of salary. Even if you’re on the lowest banding earning minimum wage you’ll have a pension equivalent to about £250,000 in value. To build that in the private sector you’d have had to save 50% of your pay, and don’t forget you can’t legally salary sacrifice below minimum wage anyway. Compare that to about 14% (correction edit: between 5% and 8% for low earners) that NHS employees pay. It’s a very good scheme indeed. If you worked all your life in the NHS you’d leave on a full salary pension. I don’t see many private sector minimum wage employees saving up a pension pot of half a million.
They won't take away the 25% TFC. But it seems very likely they will add the value of our pensions to our estates on death. If you can imagine the value of your house being added to your pension, a huge number of people will be taxed on death, even though they were far from rich. As soon as this gets understood there will be just as big an outcry as if they removed the Tax Free cash.
Well, there would if you are a 40% taxpayer now, and a 20% taxpayer when you retire. It's also worth investing the minimum to get the employers contributions. If they make it unattractive to invest, pay into a pension etc, then many more people will either retire, or work part time. If the number of richer people, went three days a week, the tax receipts would crash.
I wouldn’t expect them to do this because of what you say. However, I would expect some tinkering at the edges e.g. to 20% in a staged reduction of TFC or PCLS allowance.
@@timpickrell9597 The single tier pension did that, someone working 55 years instead of 35, gets the same pension, but in reality less than someone who has never worked and claims pension credit. Have a private pension, you get taxed! No incentive to work once you have the full state pension... apart from paying the Government more. 😆
One very interesting thing I found out recently was that if you die before the age of 75, 100% of your pension is tax free when it passes to your relatives. If you die aged 76 it taxed. I assume under the inheritance tax as part of your estate. What a ridiculous tax law.
Regardless of when you die, your pension is outside your estate and is not subject to inheritance tax. Post-75 death simply has different income tax implications for the beneficiary, as they will pay at their marginal rate rather than pay no income tax at all on what's inherited.
I absolutely love listening to this woman talk. Her voice is so beautiful. Even though I don’t understand all of what she’s saying, I could listen to her all day ❤x
When Keir Starmer said that pensions including TFC could be reviewed, there was a quick correction put out afterwards stating that the 25% TFC is a quote "permanent" part of UK pension system. I think taking the 25% TFC away would be political suicide. It's more likely the £268k TFC will just be capped for decades and devalue over time. Frankly I think they could win votes by allowing TFC from age 55, while moving drawdown to 57,58, 60? as time progresses. Also I wonder if pensions themselves will just be subject to IHT, possibly with a higher limit. With so much money in pensions, I don't think governments will ever stop meddling!
@@fanfeck2844 the pension fund would not release it without paying tax. First 800 free of tax. To 30k at 18%. Then 28% for the rest. About the same rate as Capital Gains Tax on property.
Thanks for the video Dianne. If they remove the 25% tax free allowance, then there’s little point in saving in a pension at all, if you’re a basic rate tax payer. You might as well put it in an ISA for exactly the same gains with no age restrictions on withdrawal. Is this something that the govt is actually considering, or is it just speculation?
@@BLOCKsignallingUK The IHT issue is a good call that I forgot to consider. So yes, if you want to pass a fair amount on when you pass away, a pension is advantageous. I don’t buy the additional capital gains argument though. Whether you pay no tax now but pay 20% later, as in a SIPP, or whether you pay 20% now and nothing later, as in an ISA, you’ll still end up with the same net amount at the end
But if you salary sacrifice into the pension fund, you get the NI contributions going into the pension fund as well. There is no way to do that with an ISA contributed to after tax. So for many people you get 28% boost to the salary sacrifice payments, and then pay 20% tax later when drawing the pension.
Leaving the pension for another few years sounds like a great idea if it grows by the 7% that you estimated....however, both of my small pensions that I have yet to access actually went DOWN over the last 4 years! It ripped my plans apart!
same here, we lost many thousands so took it out and its invested as pension savings so we now earn hundreds every month for the first time in 2 years.
Most of my financial planning over the last decade has been to maximise my tax free lump sum amount, so as to be able to draw on that to retire early(61) which would help bridge the gap to state pension age (67) whilst leaving the rest of the pension un touched to grow. Any meddling with this would really scupper my plans and probably thousands of other people in a similar position too. I notice public sector pensions never seem to be meddled with.
In what way ? Are most of them still tax payer funded, gold plated, index linked and guaranteed. Let me know when they all get moved to defined contribution like 90% of the private sector.. Public sector pensions are the elephant in the room when it comes to the country’s finances.
@@johndoh539In the case of the police, it’s now average salary rather than final salary ( or last three years) and the not insignificant matter of an additional ten years before being able to draw a full pension. So there are two recent changes you are unaware of. And of course, unlike every other employment barring the armed forces, the police cannot strike.
@@johndoh539the benefits of dB pensions are continually eroded with the employees forced to contribute more. As example for teachers as new teachers join the profession they're forced to settle for much less generous schemes.
I had a number of pensions, one a significant sum and others small in size. Last week I cashed in my last fund, ensuring this did not push me into a higher rate tax band. With so much uncertainty as to what is going to happen I have taken back control of my own funds. Tired of fund charges, management fees, IFA fees. It began to feel like I was funding too many life styles other than my own. My life style is simple and have put some guarantees in place. Unless this administration starts meddling with the state pension and means testing.
You say that but as a 80s mortgage payer we never thought that they would remove the tax relief on mortgage payments but they did and not much of a whimper from the populous.
@@kenleesuser1943 it impacted everyone with a mortgage but basically what could be done? It’s no different to the budget when petrol/tabacco/alcohol get duties changed.
It would lead to chaos among higher paid public workers - such as Doctors, Police officers, judges, teachers, career military personnel. Reducing to £250,000 seems more likely if the limit freeze is altered at all.
Politicians will always take the easiest route to raising revenues. They should go after the very richest who pay less than the poorest in society. They should go after multinationals who pay zero tax on UK based income but they are lobbied too hard so they won't. Imagine raising revenue from the richest and then using that to provide pension investments for anyone under the age of 18 say £10k at the age of 10 that gets invested and can't be touched til 67. Then stop the state pension system for anyone who qualifies for that. Look at Norway model and how their sovereign wealth fund has helped bolster their economy for now and the future. Instead we have a broken model where a very small minority continue to become richer and richer. How does that help society as a whole?
@@richsmart321 yes good idea we should have done that,when North Sea oil/gas came ashore,But we a larger population than Norway it was spent propping up the unemployment problem, mining steel railways etc you’re right a lump sum put away for retirement at an early stage, do away with family Allowance and put that into it , some might get a job as a result, a lump sum £17000 after 12 years of working was reinvested after 35 years it had grown to £110000 for a pension pot for a 12 year contribution, partly robbed by government 10% dividend tax ! Its all to easy to dive into money/savings that is not theirs!
People wouldn’t do business here , it would cause mass unemployment plus you free up tax from business owners they pay vat on all luxury stuff they buy with it anyway watches , cars , nights out so we get it back anyway . Comments just come like this from jelous people everyone can start a business you don’t need money just time
@@nighttrain1236 soak the rich? Not at all, but they shouldn't be paying less than the poorest in our society! UK is a very different place to Venezuela - not talking about communism, but equitable tax
@@richsmart321 Who is paying less? Our taxation system is already radically progressive. For example, the top 1% of income tax payers pay 27% of all income tax receipts, and the top 10% of income taxpayers contribute over 60% of receipts. whilst 43% pay no income tax at all.
Definitely thinking of taking out remaining tax free amount before October 30th. Will invest it in same stocks and will be a pain to juggle investments around to avoid CGT & dividends tax (which I also expect to increase).
If they did this they will be vastly underestimating the effect of the tax free withdrawal spending on the UK economy - and the loss of retired voters!
One needs to do thorough research and my conclusion is the 25% drawdown will be drastically reduced or stopped on Oct 30th. Cash in and stick it in an ISA.
@@DianneSullivan Thank you for some of your good advice. Although I must disagree with you and nearly all FSA about not cashing in your full 25%. This requires you to have some investing knowledge/ and ability to control there monthly/Yearly budget. Added together with huge trust you need in your Financial Adviser. (Modern day 70's second hand car dealers). This will sound a bit insulting but most people don't and this is because it was never taught in school. Bear in mind they want you to keep your 25% tax invested as they make charges and fees. Don't forget one of the cardinal rule of investing is the value of time. Leaving your money invested for another 2/4 years is very high risk/ very high rewarding for your Pension company/FSA. The last 2 years a 2 year old could of made money on the world stock markets. Yet Halifax manage to loss my work friend several thousand pounds on a stocks and share manged ISA. 15%/20% % gain was easily achievable. Ripped of in charges and costs.
i took EVR 2 months ago, and one of my options was to start drawing on my pension (Split between DB & DC). Of that, the 2 options among several were, take a big lump sum with a lower monthly payment, or a medium lump sum with a higher monthly payment. Knowing my average outgoings per month, and that i'm still 5-6 years from state pension age, i opted for the latter.
Governments are over a barrel on this one. Every move they make to tap pensions disincentives people from saving in and for pensions and that exacerbates the pensions crisis. Gordon Brown tapped into pension growth by taxing it and this has been a significant contributor to our current pensions problems.
Keep calm and carry on. It's all speculation and one known fact is that they need doctors ,surgeons, dentists and other high paid folk to keep working so they know they have to act carefully.
I don't remember Labour mentioning any changes to Pensions during the election campaign. If they are going to do so then they should have been open and honest about it at the time so that people could make an informed choice. Any negative changes to Pensions, CGT or anything else will be seized upon by the Tories as an "I told you so", and they wouldn't be wrong.
Honest ! Politicians - what planet do you live on - they are all, any party, only interested in feathering nests and looking after number one. Lying with ease is a prerequisite to be an MP.
Ha! ha! It is so adorable that you think Starmer-led Labour would be open and honest about their real plans in their election campaign! (NB I used to vote Labour, until the pandemic exposed certain things.)
The don't call them Liebour for nothing and the way things are going the Tories may well be an irrelevant little voice after the next election, as the electorate are finally starting to wake up to their self-serving shortcomings.
It reminds me of Darth Vader. "I'm changing the terms of our agreement, and pray that I don't change them any more." I think it should be illegal for the government to change these laws to make them more restrictive, at least once you have started paying national insurance tax; it should be like a contract. It's bad enough that my wife and I have to wait until 67 - possibly 68 for me - before we get entitlement to our state pension which is already one of the lowest of the European pensions, and there's even talk of pensions becoming means tested at which point I probably would have decided not to invest in a pension at all and just enjoyed the money while I was younger.
Common misconception that our pensions are one of the lowest in Europe, this is because many countries have their extra pension contributions run by the state & this is added to the state pension, ours are run separately & this is our private pensions industry. Your state pension added to your private pension is what they get as a state pension.
@@iaing9028 Well, whichever way you slice it, it's not exactly good, and the cost of living here is high. But I did look into it and I saw that we rank approximately middle compared to 29 other European countries, so thanks for making me a little more enlightened.
Retired at 57, I knew down the line the government would try getting at my pensions, I struggled without holidays to max out my work pension, matching my employers max 8%.
Thanks for the vid Dianne. I have a question if I may. I am retiring on 6 Nov 24 and plan on taking a lump some. Would any immediate changes affect this or would I dodge the bullet. Many thanks.
The Institute for Financial Studies have been screaming for this for years. It makes sense but not when Governments are wasting money by the billions elsewhere.
The best thing is to have a mix of pensions and a stocks and shares ISA - there is still a reluctance by many people in the U.K. to invest in a ISA (unless it’s a cash ISA, which to me are pretty pointless)
Its the discussions about means testing the state pension that is more worrying , Starmer says its a benefit , not a right . Since when did we have to pay in for 35 years for a benefit ?
@@waleso6508Perhaps the remaining 75%, or a decent proportion of it, was left invested in the markets and saw good growth. It's also still possible to contribute to a pension even after taking from it. As an aside, unless a 25% lump sum lump sum is actually required to be taken, UFPLS doesn't exhaust the tax-free lump sum and works better for many people in the long run.
@@nickbrown6457 Whether by luck or judgement, my gut feeling was to take my tax free 25%. My pension advisor seriously advised against it, but i did it anyway. I purchsed some Premium Bonds, and also invested in various batches of rare and now exceedingly hard to now find new old stock metal products. Purchasing these was a no brainer, I just knew they would only go up in price as they were no longer manufactured. Both have continuously out performed the very best efforts of the bod who looks after the remaining 75% of my pension, especially so with the premium bonds.
My pension was back to the same level it was before I took the tax free 25%. After 7 years. Remember any new money that went back in to the pension builds up another tax free allowance on that increased portion. For example if your pot grew by £30.000 years after you withdrew the 25% you would have £7500 tax free on the new money.
If you are planning not to take a lump sum but drawdown using UFPLS to minimise your income tax liability over retirement that could change a lot of plans - it probably would mine. If they did it next tax year I would be seriously considering taking out my tax free cash and maxing out my ISA for 24/25 and 25/26 which would take most of my tax free cash from my pension. I am lucky that I could do that being over 55 but what if say you are 54 that could be a big hit on your pension planning. Got my annual review with my IFA on Monday - the meeting could go on longer than planned!
This is exactly one of the concerns I have with the new government needing more of our savings to waste. I retired nearly 2 years ago now 67, and have combined my 2 pensions and left them to hopefully grow, which they have ( over 10% since last October.) Do I withdraw the 25% or not? The other worry is if they will remove the right for beneficiaries to inherit a pension tax free if someone dies below the age of 75.
@@Brian-om2hh And do what with it? Once you remove it from the tax efficient pension wrapper you have guaranteed it will be taxed, the government will love you.
Took mine at 55, even though my pension people didnt advise it, im so glad i did. Leibour are really bad for people who do the right thing and plan for their future.😊
When I left school in 1980 I was told I would get a state pension at 65 if I paid enough NI I now have to work until I’m 67 while public service employees are still allowed to retire at 55. I understand a physical demanding job like firefighter or police office but why civil servants teachers and council employees.
@@kevinwaters-vj3my negotiations during a strike I BELIEVE bought about the better pension, a bit like today they are asking for 5% that unaffordable so tell you what how about an even better deal? It’s someone else’s problem in the future!
Great video. I don't plan to take 25% of my pension at the moment. But who knows what might happen in the next few years. I have no idea what the government will do with pensions. It could be a case of, hope for the best but prepare for the worst 😮😮
How to raise taxes by stealth, and the tax free pension lump sum is a good example of number crunching if you force people to take an income that income will in most cases be taxed and that what they want more of your money. I always thought the lump sum was too good to be true for a cash strapped government to leave unchanged. What annoys me is that it is always mr and Mrs. Average who get the tax bill whilst the billionaires club just keeps marching along by being resident in one country whilst earning a living from another. I think they will do it in some shape or form, why because many people are drawing down their moderate pension pots then relying on pension credit, as many realise that unless you have a decent pension pot, pension credit pays more, not in cash but in council tax and rent relief. Brown plundered the pension funds, now Starmer could well do the same, but of course his contract at the DPP stated his pension would be paid tax free.
Good point. What happens when tax is at 100% and the services are still poor? Because that's what it will come to. I'm reasonably confident the Government could have all your money and services would be still crap.
" ... are you seriously considering taking out your tax free cash ..." I was fortunate enough to take my tax free cash before the Liz Truss government, that money is sitting in an account at 5% but the rest of my pension fund is now 66% of it's pre Liz value. Thanks Liz. On the basis, that I can just as easily lose 33% of my pension fund so why leave it to the Pension provider, I've another pension, which I'm about to take the 25%
My DC company pension has grown 19% this year, I don’t intend to take my 25% tax free lump sum, but to have 25% tax free of each withdrawal, leaving the bulk of the pension invested, it has a very low management charge of 0.3%.
@@iaing9028 I'm guessing OP's was 'risk reduced' with a greater share of bonds, which got trashed by Liz as well. I agree, if you can avoid the lump sum, don't take it, leave it to grow and spread the tax-free parts out over a few years.
unfortunately Labour has a core set of voters who either deliberatley do not have a pension or have minimum provision through auto enrolment, and none of those people will care about older people losing up to £268k tax free cash. Too many governments have fiddled with pensions. It's supposed to be a lifetime savings plan although how wnayone can do any proper long term financial planning is beyond me. Anyway, people will reap what they have sewn when Labour shows its true colours at the time of the first budget. Public finances are a mess but mainly due to the furlough scheme which Labour demanded and supported but they conveniently never mention it!
I guess a good option is having accrued the full state pension, having a bit of Defined Benefits pension (for the inflation protection and to cover a long life) then having a SIPP/DC that you can access whenever you want. (Cash if needed or to see you out between retirement and pension age)
I('m seriously contemplating taking my 25% lump sum, and putting it into an ISA. My pension is with NEST, and they do not offer a drawdown facility. Am I right in thinking I would need to move my pension to a provider who does offer Drawdown in order to access my 25% lump sum??
Thanks for thoughts. I am 62 just coming up to retirement having worked hard all my life and already paid my taxes am very angry with any government trying to take more tax when I have already paid it. As far as I am concerned it’s my right also to pass it on to children without paying even more tax . I will a wait the budget and then look at best way to reduce it.
It was made a general comment on tax not specifically related to pension, I.e taxes like inheritance tax and having to find ways to avoid having to pay it when this should not be necessary.
The 25% tax free lump sum was always rejected by the labour party..its nothing new. The tax free lump sum is an option and it should stay an option....for me its seen as a crisis fund or emergency fund...thats why it should keep the option.
The main reason i plan to take all my 25% tax free cash in one go is because I specifically planned to do so years ago in order to pay off my mortgage. Paying into a pension and having salary sacrifice, tax relief and a top up from my employer made far more sense than simply paying down the (fixed rate) mortgage. I just hope other people have the chance to plan ahead like this in future. 3:56
Wow, this was about as information filled and exciting as K Starmer being interviewed on some daytime TV show. "Eeeuuh... Dud you know by farder was a toolbaker?" [* this sentence has been phonetically modified to apply nasality]
It's more likely they'll cap the tax free cash to some lower arbitary figure e.g. £100k and then every subsequent government will keep lowering that sum. It'll become debatable whether pensions will be worth the bother if they keep reducing the benefit of paying into one.
(Correct me if I'm wrong) but, if they did that people would stop paying into their pension if they were near (or would be) to £400k in their pot. They'd pay into their ISA's instead as there'd be no gains paying into a pension?
@@ant270 it would depend on the other tax incentives. Paying into your pension can offset tax hikes (e.g.60% rate over £125k or whatever the limit is these days) and if you're a higher rate tax payer you can defer until you drop down to the lower rate. However that only works if you can claim higher rate tax relief which will also be questionable. Agree if it becomes worthless then people will opt for ISAs.
The biggest killers to pensions will be raising the minimum age that you can take your pension(s), e.g. to 65 from 55, soon to be 57. The second will be imposing annuities again on people with DC pensions and SIPPS. The third will be means testing the state pension. Removing the tax free lump sum element, may encourage people to retire early. Taking an income up to their annual tax allowance, taking 25% tax free, and maximizing ISA's etc. Retire early and enjoy your money.
Clearly there is a concern about poor pension provision and the burden this will potentially have on the state benefits system. Rather than abolishing the current entitlement to all, wouldn't it make more sense for the Labour government to apply a minimum pension pot sum which would enable the 25% tax free entitlement? However, why they are not increasing the compulsory pension contributions now is beyond me. We all know that an employer's contribution of 3% is a joke, and many only pay this basic minimum!
For most people it makes sense to take the maximum tax free lump sum as soon as possible, to avoid future political tinkering, pay off mortgage and max out ISAs for a few years. Putting money into an ISA in exactly the same fund as it was in within the pension would produce exactly the same amount in £££ terms, for any given amount. For example £100,000 tax free lump sum = £60,000 to reduce mortgage + £20,000 to ISA this Tax Year + £20,000 to ISA next Tax Year.
Whats bizzare is my wife is taking her pension £1000 a month which is made up og £750 taxable and £250 tax free.Its in a medium risk drawdown yet it has grown more than she has taken out and we have been told she is still entitled to 25% of the balance even though she gets £250 a month tax free.Why is that co i thought for example if you take £250 tax free a month in say 5 years thats £15000 tax free yet we are being told that if any time we want 25% of the of the whole amount they dont take the £15000 tax free off my 25% balabce why is that?
7% annual growth? That would be in the very highest risk category with every fund in your portfolio growing. No responsible advisor will suggest a pot will grow consistently at that rate year on year.
Invest in the financial markets before retiring by diversifying across assets, allocating a small portion of your portfolio, staying updated on market trends, and considering long-term holding to balance risk and growth.
I feel sympathy for our country, low income people are now suffering to survive yet inflation and recession keep increasing daily, many families can't even enhance the good cost of living anymore. You've helped me a lot Sir Brian! Imagine I invested $50,000 and received $190,500 after 14 days
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.
I don't think they'll remove it, but they will likely reduce the cap down to say £100k and they'll implement anti-forestalling measures the moment they announce it...... I wouldn't count on any transitional measures. The IHT exemption is also highly at risk.
If Labour were to cap the 25% tax free allowance at say £150k, would drawdown also add to this limit? That is, if I draw down £40k a year of which £10k is tax free, does that mean I will hit the £150k limit after 15 years - and then, no more tax free drawdown? If so, that would be a cloud awaiting pensioners as they approach 80
To me, a worse scenario would be - means testing of the state pension. This would be bare-faced betrayal. The only way this could even remotely work would be if you could opt out of the state pension - but pay no tax (or v reduced tax) on private pension income. However, not sure whether that would work for either the Gov or Pensioners
They have changed the rules you can't take your pension earlier at 55 its now 57 I wanted to cash in and buy a boat to live on and go part time thanks government for taking the two years off my dreams ..
I have a lgps which i intend to take when i am 60. I will take the lower yearly pension and the highest tax free lump sum conversion . This part being tax free . Is this what givernment might mess with ??. In that case i would take a higher monthly pension .
Messing around with pension incentives is a bad idea in an aging population. All it will do is further discourage pension saving, which in turn puts more burden on the state to pay for the elderly.
Hmmm just lining everything up now to take the 25% before budget day, on having a good look I can probably wrap work up next year too. Nice one Labour. Starmergeddon.
Taxes, taxes and more taxes on already paid taxed money. No wonder highly skilled people are leaving UK. We already have 70% taxes directly or indirectly stealthily taxes
This doesn’t make sense at all. They want people to contribute to their own private pensions, but are in the process of taking away the incentives to do so. They definitely want to means test the state pension, but if they want to work out cheaper for the government, then there needs to be incentives to save/invest into your own pension
This current Government are lunatics. Currently working on taking the lump sum from my final salary pension by end of October, six months before my sixtieth Birthday.
For all the negative comments on who has a good pension. The focus would be better on trying to improve potential pension outcomes generally, not be envious of good outcomes, surely. The Tax relief is inverted, should be 40% tax relief on the first £5k p.a. and 20% on the rest 😊. A substantial Tax free lump sum helps transition to retirement, even if it it is ISA invested initiaĺy...
It's far more likely that the Labour government will restrict tax relief on pension contributions so that all contributors only receive a flat rate of relief rather than entitlement to higher rate relief. That one move would save the Treasury billions. The previous government considered it, but declined nto do it. One has to balance the government's desire to raise tax (or reduce tax relief) with the need to encourage more people to save more for their future and to rely less on the state. If you make pensions less attractive, savers will be less inclined to save for their futures.
@@petersimpson633But they did restrict it. If you earned over a certain amount the Tory government reduced the amount you could pay into a pension fund to £10,000. Also the Tory government reduced the size of the pension you could contribute into. So if your pot was over a certain amount you could not increase it. That was the Tories
Flat rate relief (at 30%) is incredibly complicated. How would it work out through PAYE payroll? How would someone not paying tax get it? How would someone earning much over £50K get it? How would someone paying into a pension on the borderline get, it, e.g. some currently at 40% and some at 20%. For a SIPP it's ok, they can just uplift for 30% rather than 20% relief. How will this work out in the public sector?
Well hopefully they leave well alone at the lower end of the scale, I have a DB scheme due in Feb and will be taking 25% and re investing into an ISA, the timing means I can put £40 K away with payments in Feb then April. The balance will be into building society pots to allow easier access to the money
Hello All, minor correction; I said that the previous labour government reduced the previous lifetime allowance. What I should have said is that they were the first to INTRODUCE the LTA.
Hello Dianne,
Could you please make a video of a trivial commutation?
Thank you🙂
They would
And the Tory government reduced it a few times and nerve got rid of it.
Labour introduced it at a rate equivalent to £2.5m in today's money. The Conservatives chipped away at it down to nearer £1m
Marcel tax back plis 😮
These frequent tax code changes are disrupting my long-term investment strategies. Are there ways to structure my investments to be more resilient to potential tax code modifications?
I honestly think America needs a completely restructure of their political system. It is just not working. Trump and Biden being elected out of 300 million people to run the country is evidence for that too.
This is why the US should elect more progressive politicians, who know how to manage budgets and give us (yes, pur country's initials literally spell out that pronoun) much better tax credits in return for better public education and better public healthcare. but since these are nonexistent, my husband and I are being guided to finance our retirement and healthcare through a diversified investment portfolio
@@hasede-lg9hj How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
How can I participate in this? I sincerely aspire to establish a secure financial future and am eager to participate. Who is the driving force behind your success?
Annette Marie Holt is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
Throughout the past month, the market has been struggling; in recent weeks, all three indices have experienced losses. Every suggestion to increase my returns before I retire would be very welcomed, as my $400,000 portfolio has decreased by about 20%.
Investors should be especially cautious about their exposure and new purchases in the face of inflation. Obtaining such high yields during a recession is only possible with the assistance of a reputable advisor or competent specialist.
A lot of folks downplay the role of advisors until being burnt by their own emotions. I remember couple summers back, after my lengthy divorce, I needed a good boost to help my business stay afloat, hence I researched for licensed advisors and came across someone of utmost qualifications. She's helped grow my reserve notwithstanding inflation, from $275k to $850k.
How can one find a verifiable financial planner? I would not mind looking up the professional that helped you. I will be retiring in two years and I might need some management on my much larger portfolio. Don't want to take any chances
CELIA KATHLEEN MARTEL. is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
Thank you for this tip. it was easy to find your coach. Did my due diligence on her before scheduling a phone call with her. She seems proficient considering her résumé.
In the 1990s I sold pensions on the strenght that the tax free lump sum would pay off most if not all of the mortgage and leave the investor with a pension for life. Most were over a 40 year term plus, I was not alone.
The approach of selling pensions with the promise that a tax-free lump sum would pay off mortgages and provide a lifelong pension was common in the 1990s. However, many factors can affect the outcome, including changes in the housing market and interest rates. It's crucial for investors to seek personalized advice and consider diversified financial strategies to ensure long-term financial stability.
it's vital for investors to seek personalized advice and adopt diversified financial strategies. Working with a knowledgeable financial adviser is crucial for achieving long-term financial stability and freedom.
I'm intrigued by this. I've searched for financial advisers online but it's kind of hard to get in touch with one. Okay if I ask you for a recommendation?
I've experimented with a few over the past years, but I've stuck with ‘’Nicole Anastasia Plumlee” for about five years now, and her performance has been consistently impressive. She’s quite known in her field, look her up.
Wow, her track record looks really good from what I found online. I'll take a chance and see how it goes. Thanks for the info
If they are concerned about the black hole of 20B....how about some of our Gov dept staff getting their pension at 66 instead of 55yrs
Its already 67 now i have 5yrs left instead of 3!!
@@kristinamasters1663 no it’s still 66 but is rising to 67 from April 2026, So if your 66 after April 2026 your retirement date increases incrementally until the birthdates from 6th March 1961 where retirement is 67.
My wife born August 1960’state pension age in January 2027 where she will be 66 and 5 months
The black hole is a lie. An outright lie.
That's not part of the script it's non governments mugs whose to pay for government to waste without a shred of guilt
@@guyr7351 yes but I will be in the higher catchment so for some of us its 67 now and I have known that for a few years its not a new thing.
We are all tired of tax on top of tax on top of tax that is then flittered away on wasted initiatives and burdens that society as a whole does not benefit from…
Hi,great videos,i have been putting all spare savings into my pension for the last 15 years mainly because of this 25%tax free cash,i have just turned 55 and got it last week 90k,the rest can stay invested,me and my partner only work part time now, mortgage paid off 20 years ago,so time to enjoy,in the end you have to spend it,you cant take it with you.👍👍👍(We have put 40k into isa's)
Don’t worry government will steal it by making some excuses
Good for you, enjoy…
Yep , good luck.
You need it in property, when it doubles in next few years, you can take 75% of the capital gains out, Tax Free as its a loan.
Don't put it in a bank 😂depreciating or at 4% soon 😂
good luck you've earned it. also consider putting up to £50k in premium bonds which are 100% safe.
The red flag for me was when they kept saying
'we won't tax WORKING people'
If they don't time this right pension funds may be devastated over night as all those over 55 simply empty out these funds.
I have learnt something New today, wasn't aware I can defer the lump sum into monthly payments. This changes a lot for my plans, so thank you.
You can drawdown your defined contribution pension leaving the balance invested to grow, taking 25% tax free on each withdrawal, so taking £1k every month only £750 is taxable. This is much more efficient than taking 25% tax free in a lump sum as you are leaving the majority invested.
@@iaing9028 That depends upon if your invested fund performs well or just tracks the economy. I pulled every last penny out and invested it in Tesla (already had TSLA in my stocks&shares ISA & already have Btc & Eth]) and I'm already well up My pension company wanted £15k for the 'Annuity Purchase Fee' then offered my about thirty quid a week forever. I'm already far better off just since last april than I would have been for years of weekly pension payments
Correct and it’s invested allowing the growing pot to still have a 25% tax free portion.
Google UFPLS
@@iaing9028 uncrystallised funds pension lump sums (UFPLS)
This vile government has already shown what they are capable of. Watch this space!
I Hit 110k today. Thank you for all the knowledge and nuggets you had thrown my way over the last months. Started last month 2024. Financial education is indeed required for more than 70% of the society in the country as very few are literate on the subject. thanks to Kimberly Ann Doran for helping me achieve this
Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, I'm in my fifth trade with her and it has been super.
The very first time we tried, we invested $2000 and after a week, we received $9500. That really helped us a lot to pay up our bills.
You trade with Kimberly Doran too? Wow that woman has been a blessing to me and my family.
I'm new at this, please how can I reach her?
I was skeptical at first till I decided to try. Its huge returns is awesome. I can't say much.
I can't believe so many people were gullible enough to vote for this Labour government. I just hope people wake up before this all goes too far!!
You think they should have voted for...?
Well I didn't. I'm old enough to remember the last couple of Labour governments. They were an utter shambles then, and so it it is now.....
@@Brian-om2hh You prefer the very competent Tories? Or the joke parties?
You make sound like the Tories were somehow doing a good job 🤣
It would be political suicide if the Labour government did this. They need to sort out the massive taxpayer burden of the disproportionately generous local government and civil service pensions first.
They've a huge majority and five years to do what they propose.
The average local government pension is £3500 a year and it’s paid for by employee contributions from very low wages. Hardly generous. They are also not paid out of taxation but are independently run unlike the civil service.
The NHS pension is linked to the state pension age so most people will barely get back what they paid in anyway by the time state pension becomes around 70
They don't need to worry about electoral accountability with 411 seats for less than 10 million votes.
@@reubenjuster627even on the current less generous NHS scheme, if you work for 27 years you get a pension of 50% of salary. Even if you’re on the lowest banding earning minimum wage you’ll have a pension equivalent to about £250,000 in value. To build that in the private sector you’d have had to save 50% of your pay, and don’t forget you can’t legally salary sacrifice below minimum wage anyway. Compare that to about 14% (correction edit: between 5% and 8% for low earners) that NHS employees pay. It’s a very good scheme indeed. If you worked all your life in the NHS you’d leave on a full salary pension. I don’t see many private sector minimum wage employees saving up a pension pot of half a million.
They won't take away the 25% TFC. But it seems very likely they will add the value of our pensions to our estates on death. If you can imagine the value of your house being added to your pension, a huge number of people will be taxed on death, even though they were far from rich. As soon as this gets understood there will be just as big an outcry as if they removed the Tax Free cash.
There would be a stampede to get your tax free cash , it would kill pensions, There would be no incentive to pay into a pension
Well, there would if you are a 40% taxpayer now, and a 20% taxpayer when you retire. It's also worth investing the minimum to get the employers contributions. If they make it unattractive to invest, pay into a pension etc, then many more people will either retire, or work part time. If the number of richer people, went three days a week, the tax receipts would crash.
It would also prevent Labour being elected for a few generations!
I wouldn’t expect them to do this because of what you say. However, I would expect some tinkering at the edges e.g. to 20% in a staged reduction of TFC or PCLS allowance.
And no incentive to keep on working
@@timpickrell9597 The single tier pension did that, someone working 55 years instead of 35, gets the same pension, but in reality less than someone who has never worked and claims pension credit. Have a private pension, you get taxed! No incentive to work once you have the full state pension... apart from paying the Government more. 😆
One very interesting thing I found out recently was that if you die before the age of 75, 100% of your pension is tax free when it passes to your relatives. If you die aged 76 it taxed. I assume under the inheritance tax as part of your estate. What a ridiculous tax law.
you assume wrong as its not,its taxed at their marginal rate
Regardless of when you die, your pension is outside your estate and is not subject to inheritance tax.
Post-75 death simply has different income tax implications for the beneficiary, as they will pay at their marginal rate rather than pay no income tax at all on what's inherited.
I totally agree. Its shambolic
@adrianl5899 it's outside of your estate at the moment. I wouldn't trust labour to change this as well!
@@jimgardner6394 lol 😂 yea it’s a MP who lied to parliament, his many x wives, the people and the Queen who I wouldn’t trust.
I absolutely love listening to this woman talk. Her voice is so beautiful. Even though I don’t understand all of what she’s saying, I could listen to her all day ❤x
When Keir Starmer said that pensions including TFC could be reviewed, there was a quick correction put out afterwards stating that the 25% TFC is a quote "permanent" part of UK pension system.
I think taking the 25% TFC away would be political suicide. It's more likely the £268k TFC will just be capped for decades and devalue over time.
Frankly I think they could win votes by allowing TFC from age 55, while moving drawdown to 57,58, 60? as time progresses.
Also I wonder if pensions themselves will just be subject to IHT, possibly with a higher limit.
With so much money in pensions, I don't think governments will ever stop meddling!
I paid tax on my lump sum w years ago so what is changing?
You can currently get tax free cash from 55 and drawdown your cash. It’s age 57 from 2028 I believe.
@@johnswift1736why did you pay tax on a tax free lump sum?
@@fanfeck2844 the pension fund would not release it without paying tax. First 800 free of tax. To 30k at 18%. Then 28% for the rest. About the same rate as Capital Gains Tax on property.
@@johnswift1736 you can’t be talking about the tax free lump sum then.
Thanks for the video Dianne.
If they remove the 25% tax free allowance, then there’s little point in saving in a pension at all, if you’re a basic rate tax payer. You might as well put it in an ISA for exactly the same gains with no age restrictions on withdrawal.
Is this something that the govt is actually considering, or is it just speculation?
A SIPP can be passed on to your heirs free if IHT. You receive tax back on pension contributions, which means you have more capital to grow.
Speculation. The lack of a statement leads to uncertainty.
Speculation for clicks
@@BLOCKsignallingUK The IHT issue is a good call that I forgot to consider. So yes, if you want to pass a fair amount on when you pass away, a pension is advantageous.
I don’t buy the additional capital gains argument though. Whether you pay no tax now but pay 20% later, as in a SIPP, or whether you pay 20% now and nothing later, as in an ISA, you’ll still end up with the same net amount at the end
But if you salary sacrifice into the pension fund, you get the NI contributions going into the pension fund as well. There is no way to do that with an ISA contributed to after tax. So for many people you get 28% boost to the salary sacrifice payments, and then pay 20% tax later when drawing the pension.
Leaving the pension for another few years sounds like a great idea if it grows by the 7% that you estimated....however, both of my small pensions that I have yet to access actually went DOWN over the last 4 years! It ripped my plans apart!
Personally, I feel that a cautionary 'the value of your investment may rise or fall' would have been helpful at that point.
same here, we lost many thousands so took it out and its invested as pension savings so we now earn hundreds every month for the first time in 2 years.
Most of my financial planning over the last decade has been to maximise my tax free lump sum amount, so as to be able to draw on that to retire early(61) which would help bridge the gap to state pension age (67)
whilst leaving the rest of the pension un touched to grow. Any meddling with this would really scupper my plans and probably thousands of other people in a similar position too.
I notice public sector pensions never seem to be meddled with.
Public sector pensions are constantly being meddled with, you are simply not aware of it.
In what way ?
Are most of them still tax payer funded, gold plated, index linked and guaranteed.
Let me know when they all get moved to defined contribution like 90% of the private sector..
Public sector pensions are the elephant in the room when it comes to the country’s finances.
@@johndoh539In the case of the police, it’s now average salary rather than final salary ( or last three years) and the not insignificant matter of an additional ten years before being able to draw a full pension. So there are two recent changes you are unaware of. And of course, unlike every other employment barring the armed forces, the police cannot strike.
@@johndoh539the benefits of dB pensions are continually eroded with the employees forced to contribute more. As example for teachers as new teachers join the profession they're forced to settle for much less generous schemes.
I had a number of pensions, one a significant sum and others small in size. Last week I cashed in my last fund, ensuring this did not push me into a higher rate tax band. With so much uncertainty as to what is going to happen I have taken back control of my own funds. Tired of fund charges, management fees, IFA fees. It began to feel like I was funding too many life styles other than my own. My life style is simple and have put some guarantees in place. Unless this administration starts meddling with the state pension and means testing.
You say that but as a 80s mortgage payer we never thought that they would remove the tax relief on mortgage payments but they did and not much of a whimper from the populous.
Hahaha. Whimper from you though.
@@kenleesuser1943 it impacted everyone with a mortgage but basically what could be done? It’s no different to the budget when petrol/tabacco/alcohol get duties changed.
Would the 25% not also be invested ( 7% return) outside your pension - and protect against government taking away the lump sum??
It would lead to chaos among higher paid public workers - such as Doctors, Police officers, judges, teachers, career military personnel. Reducing to £250,000 seems more likely if the limit freeze is altered at all.
Politicians will always take the easiest route to raising revenues. They should go after the very richest who pay less than the poorest in society. They should go after multinationals who pay zero tax on UK based income but they are lobbied too hard so they won't. Imagine raising revenue from the richest and then using that to provide pension investments for anyone under the age of 18 say £10k at the age of 10 that gets invested and can't be touched til 67. Then stop the state pension system for anyone who qualifies for that. Look at Norway model and how their sovereign wealth fund has helped bolster their economy for now and the future. Instead we have a broken model where a very small minority continue to become richer and richer. How does that help society as a whole?
@@richsmart321 yes good idea we should have done that,when North Sea oil/gas came ashore,But we a larger population than Norway it was spent propping up the unemployment problem, mining steel railways etc you’re right a lump sum put away for retirement at an early stage, do away with family Allowance and put that into it , some might get a job as a result, a lump sum £17000 after 12 years of working was reinvested after 35 years it had grown to £110000 for a pension pot for a 12 year contribution, partly robbed by government 10% dividend tax ! Its all to easy to dive into money/savings that is not theirs!
People wouldn’t do business here , it would cause mass unemployment plus you free up tax from business owners they pay vat on all luxury stuff they buy with it anyway watches , cars , nights out so we get it back anyway . Comments just come like this from jelous people everyone can start a business you don’t need money just time
If that was so easy wouldn't it have been done already? 'Soak the rich' has never really worked. Look at Venezuela.
@@nighttrain1236 soak the rich? Not at all, but they shouldn't be paying less than the poorest in our society! UK is a very different place to Venezuela - not talking about communism, but equitable tax
@@richsmart321 Who is paying less? Our taxation system is already radically progressive. For example, the top 1% of income tax payers pay 27% of all income tax receipts, and the top 10% of income taxpayers contribute over 60% of receipts. whilst 43% pay no income tax at all.
Definitely thinking of taking out remaining tax free amount before October 30th. Will invest it in same stocks and will be a pain to juggle investments around to avoid CGT & dividends tax (which I also expect to increase).
That's why i took mine early before labour got in just in case!
Lucky you, I don’t hit 55 until August next year, all my plans were around this being available then
They should probably look at the out of control costs of final salary pensions for government employees first.
Great call 👍🏻
@@beer12456y that’s where most of our council tax goes
@@fanfeck2844, not most of your council tax, just about 25%!
Why I've a government pension and it's good but I work for it .
@@pip1723Easy life .
If they did this they will be vastly underestimating the effect of the tax free withdrawal spending on the UK economy - and the loss of retired voters!
You can only plan on the basis of what you know. Do not speculate and fear change. Maximise what is available now.
Exactly! Don't take out your PCLS just through fear - hopefully I made that reasonably clear
One needs to do thorough research and my conclusion is the 25% drawdown will be drastically reduced or stopped on Oct 30th. Cash in and stick it in an ISA.
@@DianneSullivan Thank you for some of your good advice. Although I must disagree with you and nearly all FSA about not cashing in your full 25%. This requires you to have some investing knowledge/ and ability to control there monthly/Yearly budget. Added together with huge trust you need in your Financial Adviser. (Modern day 70's second hand car dealers). This will sound a bit insulting but most people don't and this is because it was never taught in school. Bear in mind they want you to keep your 25% tax invested as they make charges and fees. Don't forget one of the cardinal rule of investing is the value of time. Leaving your money invested for another 2/4 years is very high risk/ very high rewarding for your Pension company/FSA. The last 2 years a 2 year old could of made money on the world stock markets. Yet Halifax manage to loss my work friend several thousand pounds on a stocks and share manged ISA. 15%/20% % gain was easily achievable. Ripped of in charges and costs.
You can bet your Sunday Lunch Rachel Reeves will......
i took EVR 2 months ago, and one of my options was to start drawing on my pension (Split between DB & DC). Of that, the 2 options among several were, take a big lump sum with a lower monthly payment, or a medium lump sum with a higher monthly payment. Knowing my average outgoings per month, and that i'm still 5-6 years from state pension age, i opted for the latter.
Governments are over a barrel on this one. Every move they make to tap pensions disincentives people from saving in and for pensions and that exacerbates the pensions crisis. Gordon Brown tapped into pension growth by taxing it and this has been a significant contributor to our current pensions problems.
Keep calm and carry on. It's all speculation and one known fact is that they need doctors ,surgeons, dentists and other high paid folk to keep working so they know they have to act carefully.
doctors ,surgeons, dentists - yes they are shipping them in on dinghys
I don't remember Labour mentioning any changes to Pensions during the election campaign. If they are going to do so then they should have been open and honest about it at the time so that people could make an informed choice. Any negative changes to Pensions, CGT or anything else will be seized upon by the Tories as an "I told you so", and they wouldn't be wrong.
Honest ! Politicians - what planet do you live on - they are all, any party, only interested in feathering nests and looking after number one. Lying with ease is a prerequisite to be an MP.
Ha! ha! It is so adorable that you think Starmer-led Labour would be open and honest about their real plans in their election campaign! (NB I used to vote Labour, until the pandemic exposed certain things.)
They never are honest and open about it. Thievery to pay for the lavish public sector pay deals, endless migration and Millband's net zero madness.
The don't call them Liebour for nothing and the way things are going the Tories may well be an irrelevant little voice after the next election, as the electorate are finally starting to wake up to their self-serving shortcomings.
They did not want you to know this because they wanted your vote
I despise labour and starmer . The whole party is a disgrace
It reminds me of Darth Vader. "I'm changing the terms of our agreement, and pray that I don't change them any more." I think it should be illegal for the government to change these laws to make them more restrictive, at least once you have started paying national insurance tax; it should be like a contract. It's bad enough that my wife and I have to wait until 67 - possibly 68 for me - before we get entitlement to our state pension which is already one of the lowest of the European pensions, and there's even talk of pensions becoming means tested at which point I probably would have decided not to invest in a pension at all and just enjoyed the money while I was younger.
Common misconception that our pensions are one of the lowest in Europe, this is because many countries have their extra pension contributions run by the state & this is added to the state pension, ours are run separately & this is our private pensions industry.
Your state pension added to your private pension is what they get as a state pension.
@@iaing9028 Well, whichever way you slice it, it's not exactly good, and the cost of living here is high. But I did look into it and I saw that we rank approximately middle compared to 29 other European countries, so thanks for making me a little more enlightened.
And the result... Lando Calrissian blows up the second Death Star. *Spoiler*
Retired at 57, I knew down the line the government would try getting at my pensions, I struggled without holidays to max out my work pension, matching my employers max 8%.
Thanks for the vid Dianne. I have a question if I may. I am retiring on 6 Nov 24 and plan on taking a lump some. Would any immediate changes affect this or would I dodge the bullet. Many thanks.
The Institute for Financial Studies have been screaming for this for years. It makes sense but not when Governments are wasting money by the billions elsewhere.
The best thing is to have a mix of pensions and a stocks and shares ISA - there is still a reluctance by many people in the U.K. to invest in a ISA (unless it’s a cash ISA, which to me are pretty pointless)
Yes cash ISAs pay about the same as a high interest saving account after tax,so pointless, better to use your ISA elsewhere.
Its the discussions about means testing the state pension that is more worrying , Starmer says its a benefit , not a right . Since when did we have to pay in for 35 years for a benefit ?
Labour made no bones about doing this. So if you voted for Labour, tell the wife, you wanted to be skint, and you both have worked for nothing.
Five years and four months after I took out the 25% tax free out of my pension it had grown to be worth more than the 75% that was left in.
How did you do that? 🤔
@@waleso6508Perhaps the remaining 75%, or a decent proportion of it, was left invested in the markets and saw good growth. It's also still possible to contribute to a pension even after taking from it.
As an aside, unless a 25% lump sum lump sum is actually required to be taken, UFPLS doesn't exhaust the tax-free lump sum and works better for many people in the long run.
Yeah, please share with us what you did?
@@nickbrown6457 Whether by luck or judgement, my gut feeling was to take my tax free 25%. My pension advisor seriously advised against it, but i did it anyway. I purchsed some Premium Bonds, and also invested in various batches of rare and now exceedingly hard to now find new old stock metal products. Purchasing these was a no brainer, I just knew they would only go up in price as they were no longer manufactured. Both have continuously out performed the very best efforts of the bod who looks after the remaining 75% of my pension, especially so with the premium bonds.
My pension was back to the same level it was before I took the tax free 25%. After 7 years. Remember any new money that went back in to the pension builds up another tax free allowance on that increased portion. For example if your pot grew by £30.000 years after you withdrew the 25% you would have £7500 tax free on the new money.
If you are planning not to take a lump sum but drawdown using UFPLS to minimise your income tax liability over retirement that could change a lot of plans - it probably would mine.
If they did it next tax year I would be seriously considering taking out my tax free cash and maxing out my ISA for 24/25 and 25/26 which would take most of my tax free cash from my pension. I am lucky that I could do that being over 55 but what if say you are 54 that could be a big hit on your pension planning.
Got my annual review with my IFA on Monday - the meeting could go on longer than planned!
This is exactly one of the concerns I have with the new government needing more of our savings to waste. I retired nearly 2 years ago now 67, and have combined my 2 pensions and left them to hopefully grow, which they have ( over 10% since last October.) Do I withdraw the 25% or not?
The other worry is if they will remove the right for beneficiaries to inherit a pension tax free if someone dies below the age of 75.
And waste it they will, make no mistake.
Agreed, wow 10% you have done well with investments
Personally, I'd begin the process of withdrawing the 25% asap...... I wouldn't trust this government to provide a happy ending.
@@Brian-om2hh And do what with it? Once you remove it from the tax efficient pension wrapper you have guaranteed it will be taxed, the government will love you.
Took mine at 55, even though my pension people didnt advise it, im so glad i did. Leibour are really bad for people who do the right thing and plan for their future.😊
When I left school in 1980 I was told I would get a state pension at 65 if I paid enough NI I now have to work until I’m 67 while public service employees are still allowed to retire at 55. I understand a physical demanding job like firefighter or police office but why civil servants teachers and council employees.
@@kevinwaters-vj3my negotiations during a strike I BELIEVE bought about the better pension, a bit like today they are asking for 5% that unaffordable so tell you what how about an even better deal? It’s someone else’s problem in the future!
Great video. I don't plan to take 25% of my pension at the moment. But who knows what might happen in the next few years. I have no idea what the government will do with pensions. It could be a case of, hope for the best but prepare for the worst 😮😮
How to raise taxes by stealth, and the tax free pension lump sum is a good example of number crunching if you force people to take an income that income will in most cases be taxed and that what they want more of your money. I always thought the lump sum was too good to be true for a cash strapped government to leave unchanged.
What annoys me is that it is always mr and Mrs. Average who get the tax bill whilst the billionaires club just keeps marching along by being resident in one country whilst earning a living from another.
I think they will do it in some shape or form, why because many people are drawing down their moderate pension pots then relying on pension credit, as many realise that unless you have a decent pension pot, pension credit pays more, not in cash but in council tax and rent relief.
Brown plundered the pension funds, now Starmer could well do the same, but of course his contract at the DPP stated his pension would be paid tax free.
Good point. What happens when tax is at 100% and the services are still poor? Because that's what it will come to. I'm reasonably confident the Government could have all your money and services would be still crap.
" ... are you seriously considering taking out your tax free cash ..." I was fortunate enough to take my tax free cash before the Liz Truss government, that money is sitting in an account at 5% but the rest of my pension fund is now 66% of it's pre Liz value. Thanks Liz.
On the basis, that I can just as easily lose 33% of my pension fund so why leave it to the Pension provider, I've another pension, which I'm about to take the 25%
My DC company pension has grown 19% this year, I don’t intend to take my 25% tax free lump sum, but to have 25% tax free of each withdrawal, leaving the bulk of the pension invested, it has a very low management charge of 0.3%.
@@iaing9028 I'm guessing OP's was 'risk reduced' with a greater share of bonds, which got trashed by Liz as well. I agree, if you can avoid the lump sum, don't take it, leave it to grow and spread the tax-free parts out over a few years.
@@AgileSnowWeaselhow is this done some there are limits to taking sums
unfortunately Labour has a core set of voters who either deliberatley do not have a pension or have minimum provision through auto enrolment, and none of those people will care about older people losing up to £268k tax free cash. Too many governments have fiddled with pensions. It's supposed to be a lifetime savings plan although how wnayone can do any proper long term financial planning is beyond me. Anyway, people will reap what they have sewn when Labour shows its true colours at the time of the first budget. Public finances are a mess but mainly due to the furlough scheme which Labour demanded and supported but they conveniently never mention it!
I have started investing in depreciating assets- my Ducati is flippin awesome - only way to be before too old -
I guess a good option is having accrued the full state pension, having a bit of Defined Benefits pension (for the inflation protection and to cover a long life) then having a SIPP/DC that you can access whenever you want. (Cash if needed or to see you out between retirement and pension age)
I might add that if you have lifetime protection at 1.25m or higher the 25% lump sum can be higher than 268k……
I('m seriously contemplating taking my 25% lump sum, and putting it into an ISA. My pension is with NEST, and they do not offer a drawdown facility. Am I right in thinking I would need to move my pension to a provider who does offer Drawdown in order to access my 25% lump sum??
They are promoting the worst case scenario , the less you contribute the more you get....DISASTER for the young and old .
Thanks for thoughts. I am 62 just coming up to retirement having worked hard all my life and already paid my taxes am very angry with any government trying to take more tax when I have already paid it. As far as I am concerned it’s my right also to pass it on to children without paying even more tax . I will a wait the budget and then look at best way to reduce it.
You haven't paid tax on it, that's the whole point - you may be 62, but you haven't learnt much
It was made a general comment on tax not specifically related to pension, I.e taxes like inheritance tax and having to find ways to avoid having to pay it when this should not be necessary.
The 25% tax free lump sum was always rejected by the labour party..its nothing new. The tax free lump sum is an option and it should stay an option....for me its seen as a crisis fund or emergency fund...thats why it should keep the option.
BTW, I wonder how any changes will affect our MPs pensions?
The main reason i plan to take all my 25% tax free cash in one go is because I specifically planned to do so years ago in order to pay off my mortgage. Paying into a pension and having salary sacrifice, tax relief and a top up from my employer made far more sense than simply paying down the (fixed rate) mortgage. I just hope other people have the chance to plan ahead like this in future. 3:56
Does this also apply to the NHS 1995 Pension Scheme ?
Divorcinĝ nhs pension cetv worked out scotland. Should i just take 95 scheme r asap and use petv to divide pension
So, does this mean that you won't be able to get the tax relief from the money that you put into your SIPP?
Wow, this was about as information filled and exciting as K Starmer being interviewed on some daytime TV show. "Eeeuuh... Dud you know by farder was a toolbaker?" [* this sentence has been phonetically modified to apply nasality]
Sadly we don't all have huge pensions anyway and many take the TFLS and put it away for a rainy day,I think there will be many under Labour.
It's more likely they'll cap the tax free cash to some lower arbitary figure e.g. £100k and then every subsequent government will keep lowering that sum. It'll become debatable whether pensions will be worth the bother if they keep reducing the benefit of paying into one.
(Correct me if I'm wrong) but, if they did that people would stop paying into their pension if they were near (or would be) to £400k in their pot. They'd pay into their ISA's instead as there'd be no gains paying into a pension?
@@ant270 it would depend on the other tax incentives. Paying into your pension can offset tax hikes (e.g.60% rate over £125k or whatever the limit is these days) and if you're a higher rate tax payer you can defer until you drop down to the lower rate. However that only works if you can claim higher rate tax relief which will also be questionable. Agree if it becomes worthless then people will opt for ISAs.
The biggest killers to pensions will be raising the minimum age that you can take your pension(s), e.g. to 65 from 55, soon to be 57. The second will be imposing annuities again on people with DC pensions and SIPPS. The third will be means testing the state pension. Removing the tax free lump sum element, may encourage people to retire early. Taking an income up to their annual tax allowance, taking 25% tax free, and maximizing ISA's etc. Retire early and enjoy your money.
Clearly there is a concern about poor pension provision and the burden this will potentially have on the state benefits system. Rather than abolishing the current entitlement to all, wouldn't it make more sense for the Labour government to apply a minimum pension pot sum which would enable the 25% tax free entitlement? However, why they are not increasing the compulsory pension contributions now is beyond me. We all know that an employer's contribution of 3% is a joke, and many only pay this basic minimum!
For most people it makes sense to take the maximum tax free lump sum as soon as possible, to avoid future political tinkering, pay off mortgage and max out ISAs for a few years. Putting money into an ISA in exactly the same fund as it was in within the pension would produce exactly the same amount in £££ terms, for any given amount. For example £100,000 tax free lump sum = £60,000 to reduce mortgage + £20,000 to ISA this Tax Year + £20,000 to ISA next Tax Year.
Whats bizzare is my wife is taking her pension £1000 a month which is made up og £750 taxable and £250 tax free.Its in a medium risk drawdown yet it has grown more than she has taken out and we have been told she is still entitled to 25% of the balance even though she gets £250 a month tax free.Why is that co i thought for example if you take £250 tax free a month in say 5 years thats £15000 tax free yet we are being told that if any time we want 25% of the of the whole amount they dont take the £15000 tax free off my 25% balabce why is that?
Starmer has already said that the ability to take a tax free lump sum is due to end and labour have no plans to change this.
The other concern is the possibility of State pensions being means tested! Do you have any more information and a view on this linked topic?
Markets go down too! Took it earlier this year as markets were good and suspicions about Labour!
My other half took 5% tax free and used the whole amount to buy…an annuity, yes one of those and an extremely good one it is too. :)
7% annual growth? That would be in the very highest risk category with every fund in your portfolio growing. No responsible advisor will suggest a pot will grow consistently at that rate year on year.
Invest in the financial markets before retiring by diversifying across assets, allocating a small portion of your portfolio, staying updated on market trends, and considering long-term holding to balance risk and growth.
I feel sympathy for our country, low income people are now suffering to survive yet inflation and recession keep increasing daily, many families can't even enhance the good cost of living anymore. You've helped me a lot Sir Brian! Imagine I invested $50,000 and received $190,500 after 14 days
Very possible! especially at this moment. Profits can be made in many different ways, but such intricate transactions should only be handled by seasoned market professionals.
Some persons think inves'tin is all about buying stocks; I think going into the stock market without a good experience is a big risk, that's why I'm lucky to have seen someone like mr Brian C Nelson.
Finding yourself a good broker is as same as finding a good wife, which you go less stress, you get just enough with so much little effort at things
Brian demonstrates an excellent understanding of market trends, making well informed decisions that leads to consistent profit
Brave move --- it would be a kamikaze move as so many people who have tried to be sensible and prudent in retirement planning
I don't think they'll remove it, but they will likely reduce the cap down to say £100k and they'll implement anti-forestalling measures the moment they announce it......
I wouldn't count on any transitional measures.
The IHT exemption is also highly at risk.
and watch many SIPP contributions go to zero overnight.
If Labour were to cap the 25% tax free allowance at say £150k, would drawdown also add to this limit? That is, if I draw down £40k a year of which £10k is tax free, does that mean I will hit the £150k limit after 15 years - and then, no more tax free drawdown? If so, that would be a cloud awaiting pensioners as they approach 80
To me, a worse scenario would be - means testing of the state pension. This would be bare-faced betrayal. The only way this could even remotely work would be if you could opt out of the state pension - but pay no tax (or v reduced tax) on private pension income. However, not sure whether that would work for either the Gov or Pensioners
They have changed the rules you can't take your pension earlier at 55 its now 57 I wanted to cash in and buy a boat to live on and go part time thanks government for taking the two years off my dreams ..
What about DB scheme valuations for IHT? How would they calculate HMG pensions?
Can you not withdraw it and then put it back in with the government addition?
Lets not forget Labour also talking about pushing the age you can access your pension up to 60 and beyond
They will probably put it up to 80 to keep all the Doctors working
I have a lgps which i intend to take when i am 60. I will take the lower yearly pension and the highest tax free lump sum conversion . This part being tax free . Is this what givernment might mess with ??. In that case i would take a higher monthly pension .
Messing around with pension incentives is a bad idea in an aging population. All it will do is further discourage pension saving, which in turn puts more burden on the state to pay for the elderly.
Hmmm just lining everything up now to take the 25% before budget day, on having a good look I can probably wrap work up next year too. Nice one Labour. Starmergeddon.
Taxes, taxes and more taxes on already paid taxed money. No wonder highly skilled people are leaving UK. We already have 70% taxes directly or indirectly stealthily taxes
If it will make poor people poorer then Labour will do it , well done Labour voters , you did this
Hello Dianne, find your videos very interesting. I am planning to retire 8n 3 years time. Are you available for private consultation?
I'm 68 I have a £850,000 pot what would others do ? No debt and other income to support my lifestyle, as at the moment it's outside my estate
So private sector workers get to take all the risk of DC pensions and don’t even get the crumb of a lump sum.
And the government wants the pension funds for its growth fund. No risk of course
Good point.
This doesn’t make sense at all. They want people to contribute to their own private pensions, but are in the process of taking away the incentives to do so. They definitely want to means test the state pension, but if they want to work out cheaper for the government, then there needs to be incentives to save/invest into your own pension
Public sector pensions are a huge burden on the British tax payer. You can pretty much guarantee labour won’t make any adjustments to those pensions.
This current Government are lunatics. Currently working on taking the lump sum from my final salary pension by end of October, six months before my sixtieth Birthday.
For all the negative comments on who has a good pension. The focus would be better on trying to improve potential pension outcomes generally, not be envious of good outcomes, surely.
The Tax relief is inverted, should be 40% tax relief on the first £5k p.a. and 20% on the rest 😊.
A substantial Tax free lump sum helps transition to retirement, even if it it is ISA invested initiaĺy...
It's far more likely that the Labour government will restrict tax relief on pension contributions so that all contributors only receive a flat rate of relief rather than entitlement to higher rate relief. That one move would save the Treasury billions. The previous government considered it, but declined nto do it. One has to balance the government's desire to raise tax (or reduce tax relief) with the need to encourage more people to save more for their future and to rely less on the state. If you make pensions less attractive, savers will be less inclined to save for their futures.
Truth!
@@petersimpson633But they did restrict it. If you earned over a certain amount the Tory government reduced the amount you could pay into a pension fund to £10,000. Also the Tory government reduced the size of the pension you could contribute into. So if your pot was over a certain amount you could not increase it. That was the Tories
Flat rate relief (at 30%) is incredibly complicated. How would it work out through PAYE payroll?
How would someone not paying tax get it?
How would someone earning much over £50K get it?
How would someone paying into a pension on the borderline get, it, e.g. some currently at 40% and some at 20%.
For a SIPP it's ok, they can just uplift for 30% rather than 20% relief.
How will this work out in the public sector?
When I took my police pension they took 6k off the total and then calculated 25% of the rest..apparently different rules applied 😢??
Well hopefully they leave well alone at the lower end of the scale, I have a DB scheme due in Feb and will be taking 25% and re investing into an ISA, the timing means I can put £40 K away with payments in Feb then April. The balance will be into building society pots to allow easier access to the money
There will be a uproar and labour will never be forgiven
Already happened
Thank you for making good content....However , I'm not too sure if there will be much of a state pension for those currently aged 50 or under.