I can remember rushing to buy a "section 226" pension in May 1988 because it allowed 33% of its value to be taken tax free, and this was going to be restricted to 25%. But at some point it got restricted to 25% anyway. I think it is immoral when chancellors change the tax rules of pensions and ISAs etc into which tax payers have already contributed. I would have no issue if they applied their changes for new contributions (admittedly a bit complicated for the pension providers), but sometimes they seem to enjoy pulling the rug from under the feet of people who live frugally and invest.
Are you sure you don’t have any protected rights? Just mentioning it because I have a small old pension that has protected rights and allows more than 25% tax free.
Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account. I'm now seeking best possible areas or ways to gain wealth in today's economy.
Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.
Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual investment account or employing the services of a retirement planner/investment advisor.
Private investing is the best way to go about the market right now, especially for near retirees, I've been in touch with a wealth manager, netted 370K the last downturn, made it clear there's more to the markets than we average joes know.
I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like "Kathie Daisy Bosco" I've worked with her since the pandemic and highly recommend her. You can check if she meets your criteria.
@@markwaudbyI can’t see how the Tories have any chance of getting re-elected while they’re still rolling in the mud with Nigel Farage, fighting over 20% of the electorate.
I'm 54 too and my pension fund is on the margin of being affected. When I reach 55 in July 2025, I am inclined to take the £100k in full and take a break from work. I can see many in my position doing the same. Another own goal by Mr Starmer, but then again he knows (or at least he thinks he knows) better than the electorate. At least I did not vote for him. I would rather go to jail than vote Labour 😊
@@markwaudbythat may be the case but what if you need the cash imminently when you hit 55 for example? Will they back date those payments taken I doubt it.
Financial advisors I’ve spoken to have told me that they can’t reduce the tax free cap without first passing legislation. So you should be safe to wait until after the budget announcement. I’m 55 and can potentially take the whole £286K - so this is very pertinent to me right now.
I am 59 and about to retire. Have had £57k of my PCLS already and will use some of the remainder to pay off my mortgage when I retire 60 ish. Wish I had asked about that 30 day cooling off period now as that would have been a useful safety net for me. Oh well decision made we'll see what Rachel Thieves come up with next week.
Took my 25% at the start (2018), good wack went in ISA, over finish and start of tax years, clear debt, misc. In case of political instability. Took no income from DC pensions until about 5 years later, when the MPPA was £10k. Got a fractured hip, I hope not to much in the budget to make me laugh (no worries perhaps 😊)
I doubt it will happen as it will affect senior public workers as well and Labour does not want to upset their voters! On top of this implementation is very hard.
I'm retired with two pensions and find it easy to accrue money because I'm not a big spender. I have more than £100, 000 now and it pains me I have nothing to spend it on. I've stopped investing because the only body that will benefit from it is the government when I die.
I have little faith in the competence and integrity of financial advisors. What would be more useful would be an analysis of the potential gains and losses arising from prematurely taking the tax free cash vs leaving the money invested in a variety of scenarios. I've taken mine as IMO the potential loss if there is no change is much smaller than the loss that will occur if there is a change.
Great advice Dianne but what would help more is an explanation on affect of taking £268K tax free now and putting money into ISA’s or savings account and gaining some interest but paying tax on interest ( savings not in ISA’s) to avoid possible cap at £100K in my mind could get £150K out over next 3 years but would cost £30K in tax (assuming no other income and.taking £50K a year at 20% tax rate ) please post information on this scenario 🙏
23.20 so a potential cap on pension lump sum, Isa investment cap and extension of freezing personal allowances at an amount that isn’t enough to survive on and as a country we need growth and investment to make up for the negative growth and investment from brexit
This pisses me off I am 54 planned to take £130,000 tax free cash to pay my mortgage off when my 0.99% fix rate comes to an end in September 2026. Earliest I can get this cash is July 2025. And means I am going to have to take £30,000 taxable from pension on top reducing my retirement pot that has to last rest of my life. We knew we had this tax free cash at the start, and planned this well in advance to pay off the mortgage when I was 51 when I had to give up a well paid job to take care of my mom and dad full time 24/7, they live with me.
Look, don’t get so upset. You’ve got over half a million pounds saved up. If this change happens you’ll be £6k worse off. You’ll still be able to heat and eat.
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
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?
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with Sophia Maurine Lanting for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
Or perhaps put some into ISA's and remaining to live on (if retiring). The benefit is more liquidity, guaranteed interest (cash ISAs) and lower fund fees on an ISA.
Don't act in haste. Most people are not going to be impacted by this. You'd have to have a whopping pension pot (and those who do probably have the broadest shoulders).
On the bright side of 20% of pensions over £400k half of those belong to Civil servants so Labour will open a can of worms if they try to bring this legislation in.
The main thing to remember is that whatever is said in the budget doesn't become immediate law! Whatever they say has to still be voted on by parliament, yes it will win but it means you have time between the budget and anything actually happening so why try to guess?? Also, and this is something important no matter your 'allegiance' the papers in the UK are almost all heavily pro-tory so they will do all they can to scare 'us' into getting their nephews back in power and try to make you forget the last 15 years where the UK has gone backwards whilst the rest of the world has grown. Up to you who you vote for but for your own decision making remember everything you read/hear will have some kind of bias one way or the other. There's a reason that global stocks average 10% a year but the average investor only averages only 3% is because they get scared into selling, then don't get back in until after big gains
I can remember rushing to buy a "section 226" pension in May 1988 because it allowed 33% of its value to be taken tax free, and this was going to be restricted to 25%. But at some point it got restricted to 25% anyway.
I think it is immoral when chancellors change the tax rules of pensions and ISAs etc into which tax payers have already contributed.
I would have no issue if they applied their changes for new contributions (admittedly a bit complicated for the pension providers), but sometimes they seem to enjoy pulling the rug from under the feet of people who live frugally and invest.
Are you sure you don’t have any protected rights? Just mentioning it because I have a small old pension that has protected rights and allows more than 25% tax free.
Increasing tax rates are the reason I rolled over my 401k to a Roth. I don’t want to be 59 paying taxes on current income on withdrawals made from my retirement account. I'm now seeking best possible areas or ways to gain wealth in today's economy.
Pre-tax contributions may help reduce income taxes in your pre-retirement years while after-tax contributions may help reduce your income tax burden during retirement.
Both have their perks but you can also save for retirement outside of a retirement plan, such as in an individual investment account or employing the services of a retirement planner/investment advisor.
Private investing is the best way to go about the market right now, especially for near retirees, I've been in touch with a wealth manager, netted 370K the last downturn, made it clear there's more to the markets than we average joes know.
Who is this Adviser or investor you use? I lost over 35000 already this year, I’m in need of a planner going forward.
I'm cautious about giving specific recommendations as everyone's situation varies. Consider independent financial advisors like "Kathie Daisy Bosco" I've worked with her since the pandemic and highly recommend her. You can check if she meets your criteria.
I don't think they were rumours ... ... I think they were tax policy sounding boards.
I'm 54 unfortunately. So can just wait and see if I get completely screwed next week.
I wouldnt worry about it, in a few years when a new government is in ( not Labour ) all the current rules will be re-instated again anyway!!
@@markwaudby Then they will screw you in more hidden ways.
@@markwaudbyI can’t see how the Tories have any chance of getting re-elected while they’re still rolling in the mud with Nigel Farage, fighting over 20% of the electorate.
I'm 54 too and my pension fund is on the margin of being affected. When I reach 55 in July 2025, I am inclined to take the £100k in full and take a break from work. I can see many in my position doing the same. Another own goal by Mr Starmer, but then again he knows (or at least he thinks he knows) better than the electorate. At least I did not vote for him. I would rather go to jail than vote Labour 😊
@@markwaudbythat may be the case but what if you need the cash imminently when you hit 55 for example? Will they back date those payments taken I doubt it.
Excellent advice regarding the cooling off period, I was going to pull mine this week 3 years early.
Financial advisors I’ve spoken to have told me that they can’t reduce the tax free cap without first passing legislation. So you should be safe to wait until after the budget announcement.
I’m 55 and can potentially take the whole £286K - so this is very pertinent to me right now.
Actually, legislation can be passed in a day if need be.
I am 59 and about to retire. Have had £57k of my PCLS already and will use some of the remainder to pay off my mortgage when I retire 60 ish. Wish I had asked about that 30 day cooling off period now as that would have been a useful safety net for me. Oh well decision made we'll see what Rachel Thieves come up with next week.
Took my 25% at the start (2018), good wack went in ISA, over finish and start of tax years, clear debt, misc. In case of political instability. Took no income from DC pensions until about 5 years later, when the MPPA was £10k.
Got a fractured hip, I hope not to much in the budget to make me laugh (no worries perhaps 😊)
Thank you dianne x
I doubt it will happen as it will affect senior public workers as well and Labour does not want to upset their voters! On top of this implementation is very hard.
What about the Capital Gains Tax rumours? Will you do a video on that?
I'm retired with two pensions and find it easy to accrue money because I'm not a big spender. I have more than £100, 000 now and it pains me I have nothing to spend it on. I've stopped investing because the only body that will benefit from it is the government when I die.
I have little faith in the competence and integrity of financial advisors. What would be more useful would be an analysis of the potential gains and losses arising from prematurely taking the tax free cash vs leaving the money invested in a variety of scenarios. I've taken mine as IMO the potential loss if there is no change is much smaller than the loss that will occur if there is a change.
This is going to cause chaos as it will impact public sector pensions too (or there will be a discrimination case on the table next day)
Great advice Dianne but what would help more is an explanation on affect of taking £268K tax free now and putting money into ISA’s or savings account and gaining some interest but paying tax on interest ( savings not in ISA’s) to avoid possible cap at £100K in my mind could get £150K out over next 3 years but would cost £30K in tax (assuming no other income and.taking £50K a year at 20% tax rate ) please post information on this scenario 🙏
23.20 so a potential cap on pension lump sum, Isa investment cap and extension of freezing personal allowances at an amount that isn’t enough to survive on and as a country we need growth and investment to make up for the negative growth and investment from brexit
Exactly why you have to have a purpose for the money eg paying off your mortgage
Dianne, what would be the situation if you had taken protection in 2012/ 14/16 at 1.8m 1.6m or 1.25m ?
This pisses me off I am 54 planned to take £130,000 tax free cash to pay my mortgage off when my 0.99% fix rate comes to an end in September 2026. Earliest I can get this cash is July 2025. And means I am going to have to take £30,000 taxable from pension on top reducing my retirement pot that has to last rest of my life. We knew we had this tax free cash at the start, and planned this well in advance to pay off the mortgage when I was 51 when I had to give up a well paid job to take care of my mom and dad full time 24/7, they live with me.
Look, don’t get so upset. You’ve got over half a million pounds saved up. If this change happens you’ll be £6k worse off. You’ll still be able to heat and eat.
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
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?
Certainly, there are a handful of experts in the field. I've experimented with a few over the past years, but I've stuck with Sophia Maurine Lanting for about five years now, and her performance has been consistently impressive.She’s quite known in her field, look-her up.
I just looked up Sophia online and researched her accreditation. She seem very proficient, I wrote her detailing my Fin-market goals.
Why do people say they will withdraw the 25% and put it into ISA's, you can only invest £20k per year at £268275 it would take13.5 years.
Good point. Because for many people 25% of their pension is under £20k unfortunately.
Or perhaps put some into ISA's and remaining to live on (if retiring). The benefit is more liquidity, guaranteed interest (cash ISAs) and lower fund fees on an ISA.
Don't act in haste. Most people are not going to be impacted by this. You'd have to have a whopping pension pot (and those who do probably have the broadest shoulders).
Yes £400k is a decent pension pot size but I don’t agree it’s whopping if you are single/sole pension in your household.
On the bright side of 20% of pensions over £400k half of those belong to Civil servants so Labour will open a can of worms if they try to bring this legislation in.
If you can leave the U.K. I’d do it.
I believe it’s on a permanent decline.
Brexit certainly hasn't helped.
Please don’t update us until there is fact to base it on
Even if this came to pass, would you expect it to be law they day after the budget ? I wouldn't have thought so ?
I would hope so, but who knows with this government.
I would expect it would be immediate or there would be a mad rush of people withdrawing funds.
The main thing to remember is that whatever is said in the budget doesn't become immediate law!
Whatever they say has to still be voted on by parliament, yes it will win but it means you have time between the budget and anything actually happening so why try to guess??
Also, and this is something important no matter your 'allegiance' the papers in the UK are almost all heavily pro-tory so they will do all they can to scare 'us' into getting their nephews back in power and try to make you forget the last 15 years where the UK has gone backwards whilst the rest of the world has grown.
Up to you who you vote for but for your own decision making remember everything you read/hear will have some kind of bias one way or the other. There's a reason that global stocks average 10% a year but the average investor only averages only 3% is because they get scared into selling, then don't get back in until after big gains