Spring Budget 2014

[l444ry]

How is it subsidised by the taxpayer? Pensions are paid for by the employer and employee so I don't see how the taxpayer is losing out. 

And if people do empty their pension pots, it is all taxed surely?

Through tax breaks.

[Webbo]

Is that because you might be a beneficiary of this change? Millions of people will suddenly be allowed to empty their pension pots, subsidised by the taxpayer, just before the General Election. Never mind though, once again the younger people will lose out again and society will pick up the bill.

Why will young people lose out?

[l444ry]

The taxpayer didnt pay in, they havent paid income tax on it. Who benifits from annuity if the pension holder dies early into its life larry?

That's why I said the pension industry needed looking at in my original post, Strokes. Your point is well made.

[l444ry]

Why will young people lose out?

 

Younger people have helped to support and protect these pots of money through their taxes and through their own payments into occupational pension schemes. Many other services are on a needs must basis (social care,etc.) Older pensioners will find themselves in poverty having spent their pot too early. The "younger" taxpayer will then have to foot the bill.

[breadandcheese]

Is that because you might be a beneficiary of this change? Millions of people will suddenly be allowed to empty their pension pots, subsidised by the taxpayer, just before the General Election. Never mind though, once again the younger people will lose out again and society will pick up the bill.

I along with millions of British citizens will benefit. Why shouldn't I have the right to decide how my pension pot is invested and paid?

If I choose to draw it down or empty it as you describe it, I will be paying tax on it as income. The tax is not avoided but deferred. Any pension left in the pot upon my death then goes into my estate and is taxed under inheritance tax. There is no issue here.

[Strokes]

That's why I said the pension industry needed looking at in my original post, Strokes. Your point is well made.

Thats it, the way i see it, is its money back in families hands rarther than these companies. You might be right it may not work out for a few, but hopefully the mass will perhaps lend/give to their kids/grandkids, invest in modernising their homes (get a painter in eh webbo ), buy a new car or even purchase a house. The economy will get the stimulation it needs and it should filter down to us all in theory.

[breadandcheese]

Either of the help to buy schemes shouldn't be a problem in a properly functioning housing market where excess demand is met by increased supply. The problem in this country is lack of supply, something which this government is seriously addressing. Help to buy is also an ethical policy because requiring young people to find a 25% deposit essentially traps them in rented accommodation and at the mercy of landlords.

Let's not forget it wasn't long ago that labour presided over a time when anyone could walk in and get a 110% mortgage. Equity loans and 95% mortgages are still very risk averse schemes in comparison to the wild debt fuelled free for all of the latter labour years.

I agree that the problem in housing is entirely a supply side issue (I personally believe that we should build on the green belt but that's a whole other debate). My fear is that help to buy is a demand side response, which is helping people without strong finances to buy a house in a benign low interest rate environment. The housing market is now booming again so you have a potential subprime in the making. When interest rates rise, we could have an issue of default, with the risk entirely on the taxpayer.

[Strokes]

I agree that the problem in housing is entirely a supply side issue (I personally believe that we should build on the green belt but that's a whole other debate). My fear is that help to buy is a demand side response, which is helping people without strong finances to buy a house in a benign low interest rate environment. The housing market is now booming again so you have a potential subprime in the making. When interest rates rise, we could have an issue of default, with the risk entirely on the taxpayer.

The problem is, if they build lots of houses, prices will fall and that isnt a vote winner. Any government that really wants to solve the housing crisis, has to be honest with the electorate.

[MooseBreath]

Younger people have helped to support and protect these pots of money through their taxes and through their own payments into occupational pension schemes. Many other services are on a needs must basis (social care,etc.) Older pensioners will find themselves in poverty having spent their pot too early. The "younger" taxpayer will then have to foot the bill.

Foot what bill? Any pensioner who spends their whole pot will have to survive on the state pension which they will get whether they spend the whole pot or not. There is no extra cost to the tax payer.

As for younger people "supporting and protecting these pots of money though their taxes and their own payments", that's just completely wrong. The vast majority of pensions are invested into investment funds through private pension providers. They aren't propped up by the tax payer or through other people's payments at all. The only tax benefit of a pension is that you get tax relief on contributions. But you then get taxed on it when you take it out.

[Benji]

[Webbo]

Younger people have helped to support and protect these pots of money through their taxes and through their own payments into occupational pension schemes. Many other services are on a needs must basis (social care,etc.) Older pensioners will find themselves in poverty having spent their pot too early. The "younger" taxpayer will then have to foot the bill.

There isn't going to be a a means tested pension benefit anymore so you won't get anymore than the basic anyway.

 

Would you say that the taxing of pension funds like Gordon Brown did that led to a lot of pension schemes collapsing was leaving young people to pick up the bill?