Iain Duncan Smith Resigns

[Buce]

Self reliance and the dignity of work. Not bringing kids up in non working households. The best kind of ideology in my opinion.

How does stripping benefits from the disabled fit with that?

Even Psyco Duncan-Smith couldn't stomach that.

[Vicki Vixen]

With finance legislation, especially pensions given they are long term financial planning instruments, it's seen as unfair to move the goalposts and reduce the benefits for someone who had already started investing based on the terms that had been set out.

So what's happened in the past is some form of transitional protection is offered to those people, pinned with certain rules - and having worked in this sector a long time myself, the way they are applied tends to be fair and balanced.

It's also important to note - those with a sizeable, actively invested pension fund do help to provide jobs in the finance sector.

I'm not suggesting they reduce accrued pensions, I am suggesting they tax them at the same rate as for the rest of the population.

[Webbo]

How does stripping benefits from the disabled fit with that?

Even Psyco Duncan-Smith couldn't stomach that.

I'm not that well informed about the current proposals, from what I understand if the govt fitted a handle next to the toilet to help you get up you used to get a weekly allowance for using that that which does seem a bit strange. These particular  cuts seem more about saving money than ideology though.

 

If you honestly think that govt ministers are psychopaths who take money off poor people for no reason other than spite then there's not much point continuing this conversation. 

[Strokes]

What happened to heating or eating this winter, did everyone decide to eat in the cold?

[Buce]

I'm not that well informed about the current proposals, from what I understand if the govt fitted a handle next to the toilet to help you get up you used to get a weekly allowance for using that that which does seem a bit strange. These particular cuts seem more about saving money than ideology though.

If you honestly think that govt ministers are psychopaths who take money off poor people for no reason other than spite then there's not much point continuing this conversation.

It's clear to anybody who isn't blinkered - even 'Psycho' himself acknowledges it.

You refuse to recognize it, in order to justify your support for them; you're a basically decent guy who couldn't handle the guilt.

[Webbo]

It's clear to anybody who isn't blinkered - even 'Psycho' himself acknowledges it.

You refuse to recognize it, in order to justify your support for them; you're a basically decent guy who couldn't handle the guilt.

Do you feel any guilt about increasing and sustaining welfare dependency? It's a known fact that people on welfare die earlier, are you proud to support that, do you want people to die? See I can come out with that type of crap too It's illogical, emotive nonsense like that that makes these discussions a waste of time.

 

Why would any party that seeks power in a democracy deliberately make a huge section of the electorate worse off for no good reason? It doesn't make any sense. If you don't like Tory policy that's fair enough but to pretend there's some evil agenda is ridiculous.

[Buce]

Do you feel any guilt about increasing and sustaining welfare dependency? It's a known fact that people on welfare die earlier, are you proud to support that, do you want people to die? See I can come out with that type of crap too It's illogical, emotive nonsense like that that makes these discussions a waste of time.

Why would any party that seeks power in a democracy deliberately make a huge section of the electorate worse off for no good reason? It doesn't make any sense. If you don't like Tory policy that's fair enough but to pretend there's some evil agenda is ridiculous.

You keep telling yourself that if it makes you feel better, Webbo.

[Webbo]

No counter argument? No reasoned response to what I've said? Bit disappointing but understandable.

[DJ Barry Hammond]

I'm not suggesting they reduce accrued pensions, I am suggesting they tax them at the same rate as for the rest of the population.

Any pension taken as income will be taxed at the normal amounts and you've mentioned reductions in Lifetime Allowance (LTA) and protections some have, but in reality that position is only fair.

I would suggest you're not exactly being clear on what you're against - and that may be due to a lack of knowledge on what is a very complex area (would that be fair?)

I should add that the tax man normally gets his cut at some point. There used to be a situation where those with very large pension pots would actually struggle getting the funds out without paying a large tax charge (recent changes have thrown everything up in the air).

In a way, the set of changes was very frustrating because Steve Webb had become pensions minister and he had a good understanding of some of the issues in the sector - and legislation was announced that fixed most of the problem areas.

HOWEVER, lumped on the back of this was the populist 'you can take what you want' piece of legislation that just muddied the waters really - and I'd bet that this was legislation pushed for by Osborne because it made no sense combined with the other areas of legislation put through.

Anyway, the point stands, if someone is able to take a £450,000 annual pensionable income, they will be taxed at the higher rate on that income. They'd also go over the LTA very quickly so would be paying 55% tax charge on anything taken above their respective LTA.

[Buce]

No counter argument? No reasoned response to what I've said? Bit disappointing but understandable.

Not at all, Webbo.

Like you, I see no point in having the discussion. You treat your political affiliations like we do our football team - with blind loyalty.

"four legs good, two legs bad (baaaaaaa)" - Animal Farm

[DJ Barry Hammond]

Add to above - thinking about it, the £450,000 figure is more likely to be the "pension commencement lump sum" - PCLS or more commonly known as Tax Free Cash.

Everyone has a right to take a portion of their pension pot as a lump sum and not have this taxed as income - and in most cases this amount would be 25% of your fund.

however before 2006 the calculation as to what your lump sum could be was a lot more complex - and for existing pension holders, if this basis was more beneficial they could maintain that right.

BUT - even if someone could take £450,000 out in TFC, those funds then become an active liability in IHT matters, that money is likely to draw an income in some form going forward - resulting in income tax, etc - so the tax man would get a cut at some point.

[Webbo]

Not at all, Webbo.

Like you, I see no point in having the discussion. You treat your political affiliations like we do our football team - with blind loyalty.

"four legs good, two legs bad (baaaaaaa)" - Animal Farm

This is getting petty now, I'll leave it at that.

[Vicki Vixen]

Any pension taken as income will be taxed at the normal amounts and you've mentioned reductions in Lifetime Allowance (LTA) and protections some have, but in reality that position is only fair.

I would suggest you're not exactly being clear on what you're against - and that may be due to a lack of knowledge on what is a very complex area (would that be fair?)

I should add that the tax man normally gets his cut at some point. There used to be a situation where those with very large pension pots would actually struggle getting the funds out without paying a large tax charge (recent changes have thrown everything up in the air).

In a way, the set of changes was very frustrating because Steve Webb had become pensions minister and he had a good understanding of some of the issues in the sector - and legislation was announced that fixed most of the problem areas.

HOWEVER, lumped on the back of this was the populist 'you can take what you want' piece of legislation that just muddied the waters really - and I'd bet that this was legislation pushed for by Osborne because it made no sense combined with the other areas of legislation put through.

Anyway, the point stands, if someone is able to take a £450,000 annual pensionable income, they will be taxed at the higher rate on that income. They'd also go over the LTA very quickly so would be paying 55% tax charge on anything taken above their respective LTA.

My point is that you cannot have a wealth tax (which the lifetime allowance charge is) with protection for those who are already wealthy.

Imagine if the Labour government had brought in their proposed mansion tax but then exempted anyone who already owns an expensive house from the tax, and instead only applied the tax to younger people. It amounts to the same thing.

And no I don't have "a lack of knowledge" in this area, I am an actuary and have worked in the field for 15 yrs.

[DJ Barry Hammond]

My point is that you cannot have a wealth tax (which the lifetime allowance charge is) with protection for those who are already wealthy.

Imagine if the Labour government had brought in their proposed mansion tax but then exempted anyone who already owns an expensive house from the tax, and instead only applied the tax to younger people. It amounts to the same thing.

And no I don't have "a lack of knowledge" in this area, I am an actuary and have worked in the field for 15 yrs.

There is a big difference in buying property for investment and saving towards your pension which all governments have agreed is something they wish to encourage.

That's the key difference, the government set the limits for these people at that time and they took advantage of that - so to penalise people for that now with a reduced limit would be totally unfair hence 'transitional protection' arrangements are put in place.

It's the same as when there was the transition from TESSA's to ISA's - the government didn't suddenly class the TESSA's as taxable savings, there were arrangements put in place to enable these funds to flow into ISA savings for those that had them.

Let's put it this way - if a significant change like you suggested happened in the commercial world people would be outraged. They were led to believe one thing, only for the goalposts to be moved without anyway out - so there's no way a government should be acting that way.

[Vicki Vixen]

There is a big difference in buying property for investment and saving towards your pension which all governments have agreed is something they wish to encourage.

That's the key difference, the government set the limits for these people at that time and they took advantage of that - so to penalise people for that now with a reduced limit would be totally unfair hence 'transitional protection' arrangements are put in place.

It's the same as when there was the transition from TESSA's to ISA's - the government didn't suddenly class the TESSA's as taxable savings, there were arrangements put in place to enable these funds to flow into ISA savings for those that had them.

Let's put it this way - if a significant change like you suggested happened in the commercial world people would be outraged. They were led to believe one thing, only for the goalposts to be moved without anyway out - so there's no way a government should be acting that way.

We disagree, however bear in mind your attitude to this is what is stoking the huge differences in wealth between generations, and the fact retired people in the UK are now, on average, better off than the working age population. I was also not talking about investment properties, as Labour's mansion tax would have applied to the primary residence as well.

In my view, your approach is undesirable and unsustainable for society. I will end it there.

[DJ Barry Hammond]

We disagree, however bear in mind your attitude to this is what is stoking the huge differences in wealth between generations, and the fact retired people in the UK are now, on average, better off than the working age population. I was also not talking about investment properties, as Labour's mansion tax would have applied to the primary residence as well.

In my view, your approach is undesirable and unsustainable for society. I will end it there.

For me it's not an area of opinion, it's actually a key principle of decision making in this area and you train of thinking is just plain wrong - if a government offers an incentive and people take it up, you have to honour the terms you offered at outset - what we have here is essentially a contract between the government and those that took the offer up.

Another similar example is final salary pension schemes - loads of companies would love to turn round to the employees who took them up and say "sorry, we're moving you to money purchase" but they can't - they can close schemes to new entrants but they have to maintain the offer they gave to those that paid in and that's only fair.

You may not like this approach, but if you actually consider the fundamentals it is the only correct and fair approach to take - even if it leaves some undesirable situations.

In terms of the area in question (LTA) the government have introduced transitional rules, which if broken would mean those with historical preferential terms would revert to the status quo, but there has to be an offer to those that allows them to keep what they expected to receive from outset.

That's not opinion - this is something that is applied across financial services, it's fact!

[Buce]

The IDS way: Victorian morality, reforming zeal, and gross incompetence:

http://www.theguardian.com/politics/2016/mar/20/ids-victorian-morality-reforming-zeal-gross-incompetence

[Vicki Vixen]

For me it's not an area of opinion, it's actually a key principle of decision making in this area and you train of thinking is just plain wrong - if a government offers an incentive and people take it up, you have to honour the terms you offered at outset - what we have here is essentially a contract between the government and those that took the offer up.

Another similar example is final salary pension schemes - loads of companies would love to turn round to the employees who took them up and say "sorry, we're moving you to money purchase" but they can't - they can close schemes to new entrants but they have to maintain the offer they gave to those that paid in and that's only fair.

You may not like this approach, but if you actually consider the fundamentals it is the only correct and fair approach to take - even if it leaves some undesirable situations.

In terms of the area in question (LTA) the government have introduced transitional rules, which if broken would mean those with historical preferential terms would revert to the status quo, but there has to be an offer to those that allows them to keep what they expected to receive from outset.

That's not opinion - this is something that is applied across financial services, it's fact!

So how do you explain the French wealth tax? A retrospective tax on assets that were accumulated in the past under a different set of rules.

[DJ Barry Hammond]

So how do you explain the French wealth tax? A retrospective tax on assets that were accumulated in the past under a different set of rules.

I'm astonished that as an actuary you don't understand the clear difference between government taxation measures and allowable tax-efficient benefits.

The LTA forms part of non-taxable allowances the government permits on pensions because they want people to follow this action.

If people then follow this action, it would be completely wrong to turn round and penalise them at a later date as one government decides the previous allowances were wrong.

[Buce]

I know looks aren't important, and I'm sure his mother loves him, but I think I've discovered what happened to the pig's head that Cameron fvcked:

STEPHEN CRABB

[RobHawk]

For me it's not an area of opinion, it's actually a key principle of decision making in this area and you train of thinking is just plain wrong - if a government offers an incentive and people take it up, you have to honour the terms you offered at outset - what we have here is essentially a contract between the government and those that took the offer up.

Another similar example is final salary pension schemes - loads of companies would love to turn round to the employees who took them up and say "sorry, we're moving you to money purchase" but they can't - they can close schemes to new entrants but they have to maintain the offer they gave to those that paid in and that's only fair.

You may not like this approach, but if you actually consider the fundamentals it is the only correct and fair approach to take - even if it leaves some undesirable situations.

In terms of the area in question (LTA) the government have introduced transitional rules, which if broken would mean those with historical preferential terms would revert to the status quo, but there has to be an offer to those that allows them to keep what they expected to receive from outset.

That's not opinion - this is something that is applied across financial services, it's fact!

I don't want to talk pensions as its really not my field of expertise, but on this point i would like to add, that what you describe is exactly what this government has done to students in regards to their student loan repayment thresholds. The loans were taken out with the government promising to uprate the minimum repayment threshold, only to change their mind last year after 4 years worth of students had started their degree and taken on the debt under these terms. 

[Buce]

I don't want to talk pensions as its really not my field of expertise, but on this point i would like to add, that what you describe is exactly what this government has done to students in regards to their student loan repayment thresholds. The loans were taken out with the government promising to uprate the minimum repayment threshold, only to change their mind last year after 4 years worth of students had started their degree and taken on the debt under these terms.

It seems to me that it's also what they have done to the teachers.

[Vicki Vixen]

I'm astonished that as an actuary you don't understand the clear difference between government taxation measures and allowable tax-efficient benefits.

The LTA forms part of non-taxable allowances the government permits on pensions because they want people to follow this action.

If people then follow this action, it would be completely wrong to turn round and penalise them at a later date as one government decides the previous allowances were wrong.

You didn't answer my question

I don't want to talk pensions as its really not my field of expertise, but on this point i would like to add, that what you describe is exactly what this government has done to students in regards to their student loan repayment thresholds. The loans were taken out with the government promising to uprate the minimum repayment threshold, only to change their mind last year after 4 years worth of students had started their degree and taken on the debt under these terms.

Exactly

[DJ Barry Hammond]

You didn't answer my question

I did answer it, albeit indirectly by highlighting its complete irrelevance to the situation we are talking about.

Rob however, has identified an interesting area on this and the student loan change is something I feel should have been challenged harder by the appropiate circles so that any change didn't have retrospective effects. I can only assume the fact you commented "exactly" to this suggests you think this move was massively unfair... yet you were suggesting at the start of all this that it would be ok to do something similar in respect of pensions savings.

My point has been and will remain because it is only just, if the government has set out terms in relation to something it wishes the public to take up (such as investing in a pension, making savings into an ISA or similar, providing a student loan OR providing assistance with purchasing a property), they may change the terms, but those terms shouldn't adversely effect those that have already taken up the opportunity based on the previous terms and that some transitional arrangements must be contained to protect those people.

I ask you - how can you reasonably object to that!?!

[DJ Barry Hammond]

I don't want to talk pensions as its really not my field of expertise, but on this point i would like to add, that what you describe is exactly what this government has done to students in regards to their student loan repayment thresholds. The loans were taken out with the government promising to uprate the minimum repayment threshold, only to change their mind last year after 4 years worth of students had started their degree and taken on the debt under these terms.

I believe Martin Lewis was on about taking the government to court (judicial review) over this - so it may be that this policy is changed, at least to the point that it would only be implemented moving forward and not retrospectively.

It does go to show however, how much of a shit Osborne is... if you didn't know that already.