Savings and Investments thread

With the New State Pension looking likely to increase in line with average earnings (4.7%) due to the triple lock, in 26/27 it will almost be, on its own, at the level of the Personal Allowance, and will be above it in 27/28. 

Seeing as the Government has said it will freeze the PA until 2028 (and could be frozen longer if money needs to be found past this date) then is it time that the PA be different for different sectors of the public ? How hard would it be for the Personal Allowance to be increased to say £15000 for anyone drawing the State Pension ? 

Or do the Government want to start taxing the State Pension. And if this is the only income a pensioner has then anyone over pension age could be receiving less due to being taxed on it.

I dont fancy being Rachel Reeves over the next couple of years.

LargeAddick said:

golfaddick said:

With the New State Pension looking likely to increase in line with average earnings (4.7%) due to the triple lock, in 26/27 it will almost be, on its own, at the level of the Personal Allowance, and will be above it in 27/28. 

Seeing as the Government has said it will freeze the PA until 2028 (and could be frozen longer if money needs to be found past this date) then is it time that the PA be different for different sectors of the public ? How hard would it be for the Personal Allowance to be increased to say £15000 for anyone drawing the State Pension ? 

Or do the Government want to start taxing the State Pension. And if this is the only income a pensioner has then anyone over pension age could be receiving less due to being taxed on it.

I dont fancy being Rachel Reeves over the next couple of years.

Think I saw on the news that if the State Pension goes up 4.7% as expected then the state pension would be say £12,768 or something. If that is someone’s only income they will pay 20% tax on £198 so about £40 so hardly a major issue. However I do feel that if that is the case the threshold should be increased for those caught out by this. No one should pay tax on their state pension if that is their only income.

Can't remember exact figure but will be below the Personal Allowance for the 26/27 tax year. By a few hundred quid. 

It's not really about paying tax, but having elderly people having to fill on a tax return or similar. 

Fyi. The State Pension is never taxed. It is "taxable" like any other income, but anyone with other income that takes them over the PA threshold then that other income is taxed. 

So, if you have the State Pension & private pension, then the private pension is taxed only. You get a P60 from the Company paying the pension & that will have your tax code & amount of tax being taken.

So....no other income ?  The State Pension will have to be taxed. Not sure DWP will be set up to start taxing millions of pensioners.

My money is on some form of additional.allowance. Or the Government don't bother collecting £40 from millions of pensioners.

Yes, it might be time for the State Pension to be means tested. I know lots of "pensioners" who are higher rate taxpayers WITHOUT the State Pension. A lot of them don't spend the income they have coming in and it just builds up in their bank account....... until a nice IFA invests it into their ISA every year 😉.

golfaddick said:

Yes, it might be time for the State Pension to be means tested. I know lots of "pensioners" who are higher rate taxpayers WITHOUT the State Pension. A lot of them don't spend the income they have coming in and it just builds up in their bank account....... until a nice IFA invests it into their ISA every year 😉.

Carter said:

Ah man

A few things are clear, raising taxes for the people most likely to spend money and grow the economy cant happen. Even if its minimal, its such a bad look. There is so much legacy damage to be unpicked she is between a rock and a very hard place. 

In my own naive head I'd put a penny on income tax across the board, abolish stamp duty, cut VAT to 15%, add VAT to kids clothes over a certain price threshold, abolish the additional tax on private education if the damage is not unrecoverable. Offer 0.1% loans to start ups focusing on innovative technology and have zero rates for anyone manufacturing anything. 

Remove that fucking ridiculous additional tax burden on used vehicles who's new book price is above 40k and maybe see people spending money on cars again. 

And all being well we will have growth, actual growth by next quarter.

By all means anyone feel free to rip these ideas to shreds

I agree they should increase income tax somewhere along the line but they wont as that's one if their lines in the sand. They think if they go back on an election promise they are toast.

I dont agree on reducing VAT and then increasing it on children's clothes. Let's hammer families further ???

And if you abolish Stamp Duty you'd better have an alternative tax that will raise as much, if not more, tax that SDLT brings in.

golfaddick said:

Carter said:

Ah man

A few things are clear, raising taxes for the people most likely to spend money and grow the economy cant happen. Even if its minimal, its such a bad look. There is so much legacy damage to be unpicked she is between a rock and a very hard place. 

In my own naive head I'd put a penny on income tax across the board, abolish stamp duty, cut VAT to 15%, add VAT to kids clothes over a certain price threshold, abolish the additional tax on private education if the damage is not unrecoverable. Offer 0.1% loans to start ups focusing on innovative technology and have zero rates for anyone manufacturing anything. 

Remove that fucking ridiculous additional tax burden on used vehicles who's new book price is above 40k and maybe see people spending money on cars again. 

And all being well we will have growth, actual growth by next quarter.

By all means anyone feel free to rip these ideas to shreds

I agree they should increase income tax somewhere along the line but they wont as that's one if their lines in the sand. They think if they go back on an election promise they are toast.

I dont agree on reducing VAT and then increasing it on children's clothes. Let's hammer families further ???

And if you abolish Stamp Duty you'd better have an alternative tax that will raise as much, if not more, tax that SDLT brings in.

I knew you wouldn't let me down 

I don't mean all kids clothes, a bloke at work gave me the idea when the silly prick was telling me about his brother in law who spent a ridiculous amount of money when Giorgio Armani died on a tracksuit for his nephew, a 4 figure sum! Kids clothes don't need to be that expensive but anyone who has the desire to be parted with that much money for a child's tracksuit isn't going to not do that for the sake of an extra 15% 

The money pulled in from income tax is the trade off on stamp duty and the subsequent tax pulled in from the money that gets spent with house sales that isnt at the moment. Furniture, carpets, home improvements all of which pull in tax revenue and people will tangibly feel better off and more inclined to spend money. 

I'd also raise CGT threshold, it was 13k for too long then reduced, now the treasury are mincing and squeezing things like premium bonds. People who are in the enviable position of actually making a decent profit from investments need to be incentivised to take the profits and buy cars with them, book holidays, take their mates out for a steak, go for a long weekend with a barmaid they fancy to the lake district. Not worry about more tax and only take out the bare minimum 

I agree with whoever said as much as they don't like Kier Starmer prefers him to all the labour alternatives but something he is consistent in is his willingness to change his mind with the wind. They have a massive majority, there isnt going to be an election for years so do some stuff, if he is in politics for the philanthropical reasons he would have us believe then he should enact some changes for the good of the country as opposed to him having one eye on the next general election. And I'd say that for whoever was in government 

blackpool72 said:

golfaddick said:

LargeAddick said:

golfaddick said:

LargeAddick said:

golfaddick said:

With the New State Pension looking likely to increase in line with average earnings (4.7%) due to the triple lock, in 26/27 it will almost be, on its own, at the level of the Personal Allowance, and will be above it in 27/28. 

Seeing as the Government has said it will freeze the PA until 2028 (and could be frozen longer if money needs to be found past this date) then is it time that the PA be different for different sectors of the public ? How hard would it be for the Personal Allowance to be increased to say £15000 for anyone drawing the State Pension ? 

Or do the Government want to start taxing the State Pension. And if this is the only income a pensioner has then anyone over pension age could be receiving less due to being taxed on it.

I dont fancy being Rachel Reeves over the next couple of years.

Think I saw on the news that if the State Pension goes up 4.7% as expected then the state pension would be say £12,768 or something. If that is someone’s only income they will pay 20% tax on £198 so about £40 so hardly a major issue. However I do feel that if that is the case the threshold should be increased for those caught out by this. No one should pay tax on their state pension if that is their only income.

Can't remember exact figure but will be below the Personal Allowance for the 26/27 tax year. By a few hundred quid. 

It's not really about paying tax, but having elderly people having to fill on a tax return or similar. 

Fyi. The State Pension is never taxed. It is "taxable" like any other income, but anyone with other income that takes them over the PA threshold then that other income is taxed. 

So, if you have the State Pension & private pension, then the private pension is taxed only. You get a P60 from the Company paying the pension & that will have your tax code & amount of tax being taken.

So....no other income ?  The State Pension will have to be taxed. Not sure DWP will be set up to start taxing millions of pensioners.

My money is on some form of additional.allowance. Or the Government don't bother collecting £40 from millions of pensioners.

I realise all of that. I was talking about if the State Pension was someone’s only income then no way should any of it be taxed, in my opinion.

We all agree on that, but if the Personal Allowance is not increased soon then the State Pension will be taxed. The triple lock has made sure of that. 

It's freezing the tax threshold that has made sure of that.
If the tax threshold had been rising in line with inflation as it should be then the problem would never arise. 

Correct - if inflation had been applied to the personal allowance since the freeze in 2021 at £12,570 it would today stand at £16,385

Earlier in the year there was talk of the £85000 limit being increased has anything more happened 

Ok thanks

blackpool72 said:

golfaddick said:

LargeAddick said:

golfaddick said:

LargeAddick said:

golfaddick said:

With the New State Pension looking likely to increase in line with average earnings (4.7%) due to the triple lock, in 26/27 it will almost be, on its own, at the level of the Personal Allowance, and will be above it in 27/28. 

Seeing as the Government has said it will freeze the PA until 2028 (and could be frozen longer if money needs to be found past this date) then is it time that the PA be different for different sectors of the public ? How hard would it be for the Personal Allowance to be increased to say £15000 for anyone drawing the State Pension ? 

Or do the Government want to start taxing the State Pension. And if this is the only income a pensioner has then anyone over pension age could be receiving less due to being taxed on it.

I dont fancy being Rachel Reeves over the next couple of years.

Think I saw on the news that if the State Pension goes up 4.7% as expected then the state pension would be say £12,768 or something. If that is someone’s only income they will pay 20% tax on £198 so about £40 so hardly a major issue. However I do feel that if that is the case the threshold should be increased for those caught out by this. No one should pay tax on their state pension if that is their only income.

Can't remember exact figure but will be below the Personal Allowance for the 26/27 tax year. By a few hundred quid. 

It's not really about paying tax, but having elderly people having to fill on a tax return or similar. 

Fyi. The State Pension is never taxed. It is "taxable" like any other income, but anyone with other income that takes them over the PA threshold then that other income is taxed. 

So, if you have the State Pension & private pension, then the private pension is taxed only. You get a P60 from the Company paying the pension & that will have your tax code & amount of tax being taken.

So....no other income ?  The State Pension will have to be taxed. Not sure DWP will be set up to start taxing millions of pensioners.

My money is on some form of additional.allowance. Or the Government don't bother collecting £40 from millions of pensioners.

I realise all of that. I was talking about if the State Pension was someone’s only income then no way should any of it be taxed, in my opinion.

We all agree on that, but if the Personal Allowance is not increased soon then the State Pension will be taxed. The triple lock has made sure of that. 

It's freezing the tax threshold that has made sure of that.
If the tax threshold had been rising in line with inflation as it should be then the problem would never arise. 

I don't disagree. But when the Government has pledged to keep the Personal Allowance frozen (and not just this one, the Tories did it before them) then any inflation proofing of pensions & benefits will see more & more dragged into varying tax brackets. Fiscal drag they call it.

Iirc Boris said he wanted to see the PA at 15k in one announcement when he was PM. 

Thats why I said somethings gotta give. 

I was chatting with my dad about this when the 4.7% increase was reported. His view is that he has no issue with paying income tax if the triple lock means he exceeds the threshold at some point.  

I’ve long said the personal allowance should be more like £20k, then raise the 20p/40p/45p rate. You could also tie that in with lowering in work benefits.

i don’t think state pensioners should have a different allowance. They are already ‘better off’ than someone working on the same money due to no NI.

IdleHans said:

golfaddick said:

FTSE100 just jumped 20 points in 5 mins, which is a big spike in normal times. No idea why as there has not been any market sensitive announcements. 

It's Rob7Lee investing his PB winnings

lol, I’ve just massively cut my SIPP holdings into cash, maybe it was my sell off that brought it back down…..

Rob7Lee said:

I’ve long said the personal allowance should be more like £20k, then raise the 20p/40p/45p rate. You could also tie that in with lowering in work benefits.

i don’t think state pensioners should have a different allowance. They are already ‘better off’ than someone working on the same money due to no NI.

IdleHans said:

golfaddick said:

FTSE100 just jumped 20 points in 5 mins, which is a big spike in normal times. No idea why as there has not been any market sensitive announcements. 

It's Rob7Lee investing his PB winnings

lol, I’ve just massively cut my SIPP holdings into cash, maybe it was my sell off that brought it back down…..

I wouldn't hold your breath on that one!

Rob7Lee said:

PragueAddick said:

@golfaddick  Not sure why you are suggesting the State pension is not taxed? Of course it is. It was in my taxable income for the last 8 years or so. If I had made 12k on, say, rental only in a year, and not had a state pension, I wouldn't have paid any tax. 

It's only "not taxed" if you don't have to declare it, surely?

Exactly your last point, it’s not taxed (at source), but generally you simply pay the tax on it via your other income, if you have any.

Yes, via tax code. If you have no other 'income' other than investment earnings above £10k then by self-assessment. If the state pension is your only income and interest on savings is less than £10k then no need to do a self-assessment - HMRC will write to you with the calculation.