Well we already know that the people on minimum Wage will be rolling in it with their whole 20p an hour Increase.
Basically expect a pre election budget. A smoke and mirrors trick that looks like he's doing everyone a favour while still pandering to his pals in the city by not changing the upper rate of income tax, yet again.
Well carrying on from Mr osbornes enthusiasm for the world to be cashing in on their pensions in the theory of freedom for dc/db and previously secured annuities I see no reason for that not to be extended to state pension entitlements. But hang on a minute that might mean the treasury have to cough up some reddies. I knew there was a flaw in this freedom theory!!
Well we already know that the people on minimum Wage will be rolling in it with their whole 20p an hour Increase.
Basically expect a pre election budget. A smoke and mirrors trick that looks like he's doing everyone a favour while still pandering to his pals in the city by not changing the upper rate of income tax, yet again.
Don't usually get involved in this type of thread but I just wanna pick you up on that last bit... I believe you've been sold some labour propaganda! Raising the highest rate of income tax is proven to losethe UK GDP as well as encouraging experts and professionals to leave the country losing their services.. It also reduces the tax revenue raised ie it brings in less money which is the most important factor right now! The economics clearly shows that for our economy the 45% tax rate raises the most money so why would you change that? It is also higer than labour left it for 13 years unil 3 months before an election they knew they were going to lose...
Well we already know that the people on minimum Wage will be rolling in it with their whole 20p an hour Increase.
Basically expect a pre election budget. A smoke and mirrors trick that looks like he's doing everyone a favour while still pandering to his pals in the city by not changing the upper rate of income tax, yet again.
Don't usually get involved in this type of thread but I just wanna pick you up on that last bit... I believe you've been sold some labour propaganda! Raising the highest rate of income tax is proven to losethe UK GDP as well as encouraging experts and professionals to leave the country losing their services.. It also reduces the tax revenue raised ie it brings in less money which is the most important factor right now! The economics clearly shows that for our economy the 45% tax rate raises the most money so why would you change that? It is also higer than labour left it for 13 years unil 3 months before an election they knew they were going to lose...
You're a brave man talking so much sense. You will be told on here that its not fair, tax the rich bastards because they deserve it, nothing else counts.
I like how neither the right-wingers or Osborne have even said anything yet and we've already got the usual boring lot getting their hysterical 'mates in the city' and 'frothing right-wing contingent' posts out of the way early.
Would be really nice if people could be mature enough to talk about things like the budget without stupidly wearing their ingrained left / right wing hats. Who knows, we may even get a decent thread out of it...
Well we already know that the people on minimum Wage will be rolling in it with their whole 20p an hour Increase.
Basically expect a pre election budget. A smoke and mirrors trick that looks like he's doing everyone a favour while still pandering to his pals in the city by not changing the upper rate of income tax, yet again.
Don't usually get involved in this type of thread but I just wanna pick you up on that last bit... I believe you've been sold some labour propaganda! Raising the highest rate of income tax is proven to losethe UK GDP as well as encouraging experts and professionals to leave the country losing their services.. It also reduces the tax revenue raised ie it brings in less money which is the most important factor right now! The economics clearly shows that for our economy the 45% tax rate raises the most money so why would you change that? It is also higer than labour left it for 13 years unil 3 months before an election they knew they were going to lose...
You're a brave man talking so much sense. You will be told on here that its not fair, tax the rich bastards because they deserve it, nothing else counts.
Sorry forgot sense talking and facts aren't allowed on this forum!
Would be really nice if people could be mature enough to talk about things like the budget without stupidly wearing their ingrained left / right wing hats. Who knows, we may even get a decent thread out of it...
Just because someone does't agree with caftan makes them a right wing extremist.
Despite what caftan might think, times are changing, people don't have to commit to any one side of the fence for life, the way voting habits are moving away from Labour/Tory polarisation proves that. Some people have an open mind and listen to both right and left wing propaganda. It's just that I happen to see more half-baked thinking coming from the left than half-backed thinking from the right.
OK we've got that out of the way.
It will make for a better thread later on if we just allow people to give their different views and leave the point scoring for another day. I will say the pension reforms are half-baked and politically driven now, even before I know what spin Osborne will put on them.
The expected pension reforms scare the life out of me. I spoke to a group of IFA's recently who viewed the upcoming drawdown provisions as "carnage" waiting to happen. People seriously under estimate how long they live for and how much money they will require. Providing easy access to ones pension pot is going to put many people in a very vulnerable position and at risk of getting ripped off through dodgy investment schemes, other fraud and frankly their own financial incompetence.
Osborne now is going to allow those with an existing annuity to cash it in too, therefore creating a market in poorly performing, second hand annuities. I have doubts the consumer will end up in overall credit by the end of the transaction but they may experience a short term "feel good factor" I suppose.
It seems the government have taken a very short term view on this rather than sort out a market that is not working in the interests of its customers on many occasions.
Don't all governments take the short term view? After all it's mostly about courting floating voters and winning votes. Osbourne has said there will be no give-aways in this budget so it will be fascinating to see if this is indeed the case. I wonder if the tories are quietly confident that Ed Milliband is so unpopular with many voters, that they don't really need to do a lot to win the next election.
The expected pension reforms scare the life out of me. I spoke to a group of IFA's recently who viewed the upcoming drawdown provisions as "carnage" waiting to happen. People seriously under estimate how long they live for and how much money they will require. Providing easy access to ones pension pot is going to put many people in a very vulnerable position and at risk of getting ripped off through dodgy investment schemes, other fraud and frankly their own financial incompetence.
Osborne now is going to allow those with an existing annuity to cash it in too, therefore creating a market in poorly performing, second hand annuities. I have doubts the consumer will end up in overall credit by the end of the transaction but they may experience a short term "feel good factor" I suppose.
It seems the government have taken a very short term view on this rather than sort out a market that it not working in the interests of its customers on many occasions.
I couldn't disagree more. Freedom includes the freedom to make bad choices. I find it abhorrent that the Government should tell me that I have no choice what I do with the money I have saved from my wages because somebody else might make a poor decision. Annuities are good for some people and bad for others. With rates so low, for most people an annuity is a poor choice, in my opinion. It's not the Government's job to force everyone to take them whatever their circumstances.
The expected pension reforms scare the life out of me. I spoke to a group of IFA's recently who viewed the upcoming drawdown provisions as "carnage" waiting to happen. People seriously under estimate how long they live for and how much money they will require. Providing easy access to ones pension pot is going to put many people in a very vulnerable position and at risk of getting ripped off through dodgy investment schemes, other fraud and frankly their own financial incompetence.
Osborne now is going to allow those with an existing annuity to cash it in too, therefore creating a market in poorly performing, second hand annuities. I have doubts the consumer will end up in overall credit by the end of the transaction but they may experience a short term "feel good factor" I suppose.
It seems the government have taken a very short term view on this rather than sort out a market that it not working in the interests of its customers on many occasions.
I couldn't disagree more. Freedom includes the freedom to make bad choices. I find it abhorrent that the Government should tell me that I have no choice what I do with the money I have saved from my wages because somebody else might make a poor decision. Annuities are good for some people and bad for others. With rates so low, for most people an annuity is a poor choice, in my opinion. It's not the Government's job to force everyone to take them whatever their circumstances.
I agree with your general principle of 'it's my money, don't tell me what to do with it'.
But (there's always a 'but') pension savings have been made in reality out of your gross earnings, not net - with tax relief at your highest rate. I believe that does give the authorities the right to apply some conditions on how that pot is used.
The expected pension reforms scare the life out of me. I spoke to a group of IFA's recently who viewed the upcoming drawdown provisions as "carnage" waiting to happen. People seriously under estimate how long they live for and how much money they will require. Providing easy access to ones pension pot is going to put many people in a very vulnerable position and at risk of getting ripped off through dodgy investment schemes, other fraud and frankly their own financial incompetence.
Osborne now is going to allow those with an existing annuity to cash it in too, therefore creating a market in poorly performing, second hand annuities. I have doubts the consumer will end up in overall credit by the end of the transaction but they may experience a short term "feel good factor" I suppose.
It seems the government have taken a very short term view on this rather than sort out a market that it not working in the interests of its customers on many occasions.
I couldn't disagree more. Freedom includes the freedom to make bad choices. I find it abhorrent that the Government should tell me that I have no choice what I do with the money I have saved from my wages because somebody else might make a poor decision. Annuities are good for some people and bad for others. With rates so low, for most people an annuity is a poor choice, in my opinion. It's not the Government's job to force everyone to take them whatever their circumstances.
I get the argument that it's the persons money and they should be able to invest it how they wish. I really do. But equally is it not the governments responsibility to a) make sure the market is working properly in the first place, allowing consumers to make an informed choice across all potential investments and b) make sure that consumers are sufficiently financially aware of all the implications of their choice?
We have a long history of mis-selling financial products in the UK. That's not my opinion that's a fact. These reforms appear to me to be a short term "workaround" of a problem which, to me anyway, creates an unnecessary degree of risk. A risk I would add that may well end up adding an extra burden on the public purse a little way down the road.
What it may well do to the buy-to-let market also needs to be seen.
I couldn't disagree more. Freedom includes the freedom to make bad choices. I find it abhorrent that the Government should tell me that I have no choice what I do with the money I have saved from my wages because somebody else might make a poor decision. Annuities are good for some people and bad for others. With rates so low, for most people an annuity is a poor choice, in my opinion. It's not the Government's job to force everyone to take them whatever their circumstances.
Annuities are seen as poor value because they are compared to an investment. That’s a bit like saying house insurance is poor value because you paid your premium, your house didn’t burn down and you’ve lost your money. An annuity is insurance against living too long.
What was wrong, was forcing annuities on people where the income would be enough to cover the annual milk bill, but little more. The cash you were forced to pass over could have been used more usefully to pay off the credit card. Currently the average pension pot is around £30k. It does not provide sufficient income above pocket money so many will take the cash and feel better off. So agree that releasing the chains of an annuity will benefit many.
The less known reform is allowing final salary pensions to be cashed in. The average pension pot is nearer £250k. This is being encouraged for two reasons: 1. Pensions are taxed as earned income so tax is paid for as long as you live. Cashing it in means HMRC get say 20 years of income tax overnight. 2. Companies with huge pension deficits get rid of the problem if their members cash in and go elsewhere.
The reform to allow existing annuities to be cashed in is pure politics. A market for buying annuities does not exist. So annuities cannot be cashed in yet. A market has to be formed from investors who want a guaranteed income. An annuity is guaranteed by an insurance company, but only for as long as you live. So if no one knows how long you are going to live, how would a buyer know how much he will be getting in income, and how much he should pay for it.
The market will have to be formed of institutions who buy up annuities in bulk to spread the risk. Their profit comes from making an assumption that everyone dies earlier than mortality statistics predict. In addition they have to hedge against the risk of inflation eroding the value of the future income, so will factor in a safety margin. All of this guarantees poor value for selling an annuity. At the small end of the market, getting some cash in return for losing your pocket money will seem attractive, but it will still be atrocious value. It is being offered not because it makes financial sense, but because it stifles the criticism from those who bought an annuity before the Autumn budget.
The expected pension reforms scare the life out of me. I spoke to a group of IFA's recently who viewed the upcoming drawdown provisions as "carnage" waiting to happen. People seriously under estimate how long they live for and how much money they will require. Providing easy access to ones pension pot is going to put many people in a very vulnerable position and at risk of getting ripped off through dodgy investment schemes, other fraud and frankly their own financial incompetence.
Osborne now is going to allow those with an existing annuity to cash it in too, therefore creating a market in poorly performing, second hand annuities. I have doubts the consumer will end up in overall credit by the end of the transaction but they may experience a short term "feel good factor" I suppose.
It seems the government have taken a very short term view on this rather than sort out a market that it not working in the interests of its customers on many occasions.
I couldn't disagree more. Freedom includes the freedom to make bad choices. I find it abhorrent that the Government should tell me that I have no choice what I do with the money I have saved from my wages because somebody else might make a poor decision. Annuities are good for some people and bad for others. With rates so low, for most people an annuity is a poor choice, in my opinion. It's not the Government's job to force everyone to take them whatever their circumstances.
I get the argument that it's the persons money and they should be able to invest it how they wish. I really do. But equally is it not the governments responsibility to a) make sure the market is working properly in the first place, allowing consumers to make an informed choice across all potential investments and b) make sure that consumers are sufficiently financially aware of all the implications of their choice?
We have a long history of mis-selling financial products in the UK. That's not my opinion that's a fact. These reforms appear to me to be a short term "workaround" of a problem which, to me anyway, creates an unnecessary degree of risk. A risk I would add that may well end up adding an extra burden on the public purse a little way down the road.
What it may well do to the buy-to-let market also needs to be seen.
Sure. I have no problem with the Government setting up an advice service or even make people jump through some hoops before cashing in their pensions. But if, having taken advice and either thought about it or ignored it, the pensioner wants to buy a Ferrari, go on cruise, pay a deposit on their kid's house or invest in shares that is their choice.
Agree with Dippenhall, about cashing in existing annuities. Will almost certainly be a bad deal for most, although much the same applies for new annuities, where the grantor always seeks to make a profit (of course it's doubled when you sell an annuity).
Guardian's collection of predictions from the press, based on briefings
A new system for filing tax returns Raising the personal allowance to £11,000 A £40m fund to repair church and cathedral roofs Loans of up to £25,000 for PhD students An increase in the levy on banks Cut in the lifetime pension allowance from £1.25m to £1m Relaxing defict reduction plans, to stop Labour being able to claim he would take spending down to 1930s levels An extra £25m for the security services
I'm expecting a clever, political (but reasonably subtle) budget. Since the omnishambles budget of a few years ago, Osborne has risen in my opinion as an imaginative political operator. There's no doubt that he is as powerful in this Government as Brown was in Blair's. Along with May, I think he is the most interesting and effective Tory cabinet member.
I think he is the most interesting and effective Tory cabinet member.
Yeah but he still looks like the smelly kid at school who used to shit himself.
They all do though don't they? Modern politicians pah. I do not differentiate between left, right or middle, I just want to punch them in their smug faces...
I think he is the most interesting and effective Tory cabinet member.
Yeah but he still looks like the smelly kid at school who used to shit himself.
They all do though don't they? Modern politicians pah. I do not differentiate between left, right or middle, I just want to punch them in their smug faces...
Comments
Basically expect a pre election budget. A smoke and mirrors trick that looks like he's doing everyone a favour while still pandering to his pals in the city by not changing the upper rate of income tax, yet again.
Thought I'd get this in early. You know what us 'lefty, Guardianista' are like, wouldn't want to disappoint any of our frothing right wing contingent
If you're going to try an insult someone at least don't make yourself look a thicko when you do it.
Despite what caftan might think, times are changing, people don't have to commit to any one side of the fence for life, the way voting habits are moving away from Labour/Tory polarisation proves that. Some people have an open mind and listen to both right and left wing propaganda. It's just that I happen to see more half-baked thinking coming from the left than half-backed thinking from the right.
OK we've got that out of the way.
It will make for a better thread later on if we just allow people to give their different views and leave the point scoring for another day. I will say the pension reforms are half-baked and politically driven now, even before I know what spin Osborne will put on them.
Osborne now is going to allow those with an existing annuity to cash it in too, therefore creating a market in poorly performing, second hand annuities. I have doubts the consumer will end up in overall credit by the end of the transaction but they may experience a short term "feel good factor" I suppose.
It seems the government have taken a very short term view on this rather than sort out a market that is not working in the interests of its customers on many occasions.
But (there's always a 'but') pension savings have been made in reality out of your gross earnings, not net - with tax relief at your highest rate. I believe that does give the authorities the right to apply some conditions on how that pot is used.
Brings money into HMRC and some suddenly cash rich pensioners spending their hard earned pension pot helping drive the economy forward.
This is not available for certain pesnion schemes though (like final salary/defined benefit) is it?
A few pence on a litre is not really going to be noticed.
We have a long history of mis-selling financial products in the UK. That's not my opinion that's a fact. These reforms appear to me to be a short term "workaround" of a problem which, to me anyway, creates an unnecessary degree of risk. A risk I would add that may well end up adding an extra burden on the public purse a little way down the road.
What it may well do to the buy-to-let market also needs to be seen.
What was wrong, was forcing annuities on people where the income would be enough to cover the annual milk bill, but little more. The cash you were forced to pass over could have been used more usefully to pay off the credit card. Currently the average pension pot is around £30k. It does not provide sufficient income above pocket money so many will take the cash and feel better off. So agree that releasing the chains of an annuity will benefit many.
The less known reform is allowing final salary pensions to be cashed in. The average pension pot is nearer £250k. This is being encouraged for two reasons:
1. Pensions are taxed as earned income so tax is paid for as long as you live. Cashing it in means HMRC get say 20 years of income tax overnight.
2. Companies with huge pension deficits get rid of the problem if their members cash in and go elsewhere.
The reform to allow existing annuities to be cashed in is pure politics. A market for buying annuities does not exist. So annuities cannot be cashed in yet. A market has to be formed from investors who want a guaranteed income. An annuity is guaranteed by an insurance company, but only for as long as you live. So if no one knows how long you are going to live, how would a buyer know how much he will be getting in income, and how much he should pay for it.
The market will have to be formed of institutions who buy up annuities in bulk to spread the risk. Their profit comes from making an assumption that everyone dies earlier than mortality statistics predict. In addition they have to hedge against the risk of inflation eroding the value of the future income, so will factor in a safety margin. All of this guarantees poor value for selling an annuity. At the small end of the market, getting some cash in return for losing your pocket money will seem attractive, but it will still be atrocious value. It is being offered not because it makes financial sense, but because it stifles the criticism from those who bought an annuity before the Autumn budget.
Agree with Dippenhall, about cashing in existing annuities. Will almost certainly be a bad deal for most, although much the same applies for new annuities, where the grantor always seeks to make a profit (of course it's doubled when you sell an annuity).
A new system for filing tax returns
Raising the personal allowance to £11,000
A £40m fund to repair church and cathedral roofs
Loans of up to £25,000 for PhD students
An increase in the levy on banks
Cut in the lifetime pension allowance from £1.25m to £1m
Relaxing defict reduction plans, to stop Labour being able to claim he would take spending down to 1930s levels
An extra £25m for the security services
I'm expecting a clever, political (but reasonably subtle) budget. Since the omnishambles budget of a few years ago, Osborne has risen in my opinion as an imaginative political operator. There's no doubt that he is as powerful in this Government as Brown was in Blair's. Along with May, I think he is the most interesting and effective Tory cabinet member.