Thanks Chris. There seems to be an error in the higher rate SIPP column - it applies the 42% relief against column "D" instead of column "B" meaning that it is stacking the 28% and 42% relief. It would be pretty crazy if it really worked this way!
Also, I would be interested if LISA could be added to the comparison. Perhaps it could be better for basic rate tax payers if the pension lump sum is restricted?
There are quite a few scammers in the comments stating how great their investments are and name dropping their advisors, they also have loads of fake replies congratulating them or repeating the advisors name. BE VERY CAREFUL!
I'm 55 and ready to retire anytime depending on the budget. If they tinker with pensions then they are asking for trouble. I will spend mine before 67.
Recently bought some recommended stocks and now they are just penny stocks. There seems to be more negative portfolios in the last 3rd half of 2023 and first half of this year with markets tumbling, soaring inflation, and banks going out of business. My concern is how can the rapid interest-rate hike be of favor to a value investor, or is it better avoiding stocks for a while?
I think for most people paying into a SIPP then it will be post tax income. So if you take the £200 that you would have put into your ISA and put it into a SIPP account you would get a £50 uplift (25%). So based on that you would have a pot of £409k and not £495k. As for removing the lump sum I'm doubtful it will ever happen. They just won't move the allowance. So if you have a £3m pot you will be stuck at £268k allowance or about 9% tax free. So it encourages regular people to save to try and hit the £1m pot size but taxing people who are wealthier and have even bigger pots. It will get them investing in businesses and spending which earns the government tax revenue through corporation tax and VAT.
People in the UK really need to be planning to retire aged 50-55. Waiting till 60 or later means they risk a retirement with poorer health. To get many years out of a good retirement where they still have good health, people should aim to retire much earlier. Statistically people's health starts to deteriorate from 63 in the UK.
That, or factoring in sabbaticals into their work life. A month every couple of years, or two months every job hop. That's making the most of life when you have to work.
I hope all the Labour voters are happy. Labour are going to do their best to stop people building generational wealth. Gotta keep the plebs poor. We can't have people retiring early.
@@JW-se7br So you hate poor people and want to stop them from building generational wealth and retiring before they're 70. Well, at least you're honest for a Leftist.
I didn’t think you pay NI contributions from a pension, no matter what age you retire, providing you have enough qualifying years of NI payments? NI contributions are paid from employment and self-employment and not on payments from a pension??
For £478.93 in Year 1 of the higher rate tax SIPP to be equivalent to £200 after tax & NI implies the person's Tax & NI total about 58%, which seems wrong (200 / 0.42 = 476.19). For the basic rate SIPP I see that 200 / 0.72 = £277.78, which looks right for 20% tax + 8% NI leaving the person with 72%. Where is my mistake?
You haven’t made a mistake. When he’ll have done the formula he’ll have linked it to the basic rate tax field rather than the post tax 200. Ie he did 277.78 / 0.58 =478.93. The mistake is that he based the tax relief on top of the 20% tax relief which is why the higher rate tax looks so good in his example due to double counting tax relief
I spotted it too as £478 sounded much too high - I think 0.58 should have been used instead of 0.42 at 9:30 in the video - unfortunately this makes such a massive difference to the 40% comparison that I think those sections of the video should really be sliced out if practical
The higher rate tax payer's year 1 SIPP amount of £478.93 implies they pay total tax + NI of ~58%, which seems wrong (£200 / 0.42 = £476.19). What mistake have I made?
Agreed, I'm not sure about that figure. I also thought you couldn't get an NI rebate on pension contributions, so the %s should be straight 20% and 40%.
@@chrisarkwright1313 You can't get a rebate, however you can get NI exemption at source for pension contributions. It depends how your employer processes your pension contributions. At least this is how it works for the next few hours...
I don't think they would go for pensions as they want us to provide this for ourselves.. They may go for state pension as they want to steer us to take out our own pensions
yeah coz tories have been doing so well lol the other options are ass too. Lets atleast give labour time to make changes and see how it does before moaning bwt em
Yeah, 100 days of Labour continuing the Tory Economic Plan as their first budget is tomorrow. If the economy is poor, it's down to the party in power the previous 14 years.
The whole point of the tax free lump sum is to encourage people to save very long term Take that away and no one will save into a pension (and this will impact public sector workers too as they receive a lump sum equivalent so that will go too)
I don't think it's going to happen, a reduction to 20% over a few years sure, but this sum forms part of people's retirement plans - paying off debts before retirement, helping the kids, etc. You can't easily adjust your plans at short notice to cope with the loss of such a lump sum. I understand this is a What If? though.
Do you have a link for that Labour response that they’ll keep the 25% TFLS? I’ve not seen that anywhere. Also, they could say that they’re keeping it… but still reduce its maximum to £100k - that was the rumour wasn’t it?
@@user-pd6pb2uq8r IMHO I don't think it would work (or that they would do it)...due to fiscal drag those in higher tax brackets could put more into their SIPP to reduce the tax bill and then take out when retired keeping their income below the thresholds, reducing the governments tax take.
I don't think they will, I feel they were disabused of the notion very early on, at least at the stupid low level it was set at by the Tories for a while until the dildo of consequences showed up and they panic-cancelled it entirely. £2m+ perhaps I could see.
All the bullshit from loads of RU-vidrs . So embarrassing to hear all that crap . Luckily most people with a brain doesn't take any crap from unqualified RU-vidrs 🙉🙈🙊😡😡😡😡😡😡
