Pension Contributions-Salary Sacrifice - Good, Bad or Ugly?

[shyVRS245]

At least the Tories delivered one promise on time as I can see when I get paid on the 10th April the taxable allowance has gone up to £12,500 per annum for us poor folk paying 20% tax.

[Ootohere]

What do those in the 20% tax band or 19% / 20% in Scotland pay in percentage for National Insurance compared to those in higher Tax Bands, is it 12%.

Obviously only when they need to pay NI.  Like when on the books, not on the grip.

 

 

Nothing like simplifying a system to get in more taxes,

and that is never going to be something any UK Government does.

Edited 7 April, 2019 by Skoffski

[bigjohn]

44 minutes ago, lol-lol said:

Well the new Tax Year has started and lots of people are going to see increased pension contributions and quite possibly lower net salary.

 

 

Yes, this is true but don't forget the employer contribution is going up as well and don't forget you get tax relief on your extra contribution. This long term is a good thing.

 

It's really worth it - Somehow I did take it seriously when I was young and foolish - fast forward to today and now in my mid fifties - this is giving me real future options ( I could bore you senseless with early retirement strategies)

Edited 7 April, 2019 by bigjohn

[lol-lol]

18 minutes ago, shyVRS245 said:

At least the Tories delivered one promise on time as I can see when I get paid on the 10th April the taxable allowance has gone up to £12,500 per annum for us poor folk paying 20% tax.

 

And the other side of the story is the starting of the higher rate of tax has leapt not just £650 per annum but £3,000 !!

(At least NI has gone up to match so more money for NHS !?!).

 

https://www.gov.uk/government/publications/income-tax-personal-allowance-and-basic-rate-limit-from-2019-to-2020/income-tax-personal-allowance-and-basic-rate-limit-from-2019-20

 

 

	2018 to 2019	2019 to 2020	.............
Personal Allowance (PA)	£11,850	£12,500	£12,500	£12,760	£13,030	£13,310
Basic Rate Limit (BRL)	£34,500	£37,500	£37,500	£38,300	£39,200	£40,100

The National Insurance contributions Upper Profits and Upper Earnings Limits are aligned to the higher rate threshold and will therefore also increase in 2019 to 2020.

Edited 7 April, 2019 by lol-lol

[lol-lol]

3 minutes ago, bigjohn said:

 

Yes, this is true but don't forget the employer contribution is going up as well and don't forget you get tax relief on your extra contribution. This long term is a good thing.

 

It's really worth it - Somehow I did take it seriously when I was young and foolish - fast forward to today and now in my mid fifties - this is giving me real future options ( I could bore you senseless with early retirement strategies)

 

This assumes that pension investments do better than inflation which they have not been doing over the last two years as world stock markets have been in the Doldrums and Bonds have been near zero or even negative.  Saving accounts interest much less than inflation. 

 

Having numerous current accounts, or using offshore like our leaders, legal ones if there are any, seems the best strategy !!  Perhaps go any live in a low tax place.

 

[shyVRS245]

2 minutes ago, lol-lol said:

 

This assumes that pension investments do better than inflation which they have not been doing over the last two years as world stock markets have been in the Doldrums and Bonds have been near zero or even negative.  Saving accounts interest much less than inflation. 

 

Having numerous current accounts, or using offshore like our leaders, legal ones if there are any, seems the best strategy !!  Perhaps go any live in a low tax place.

 

No council tax or road tax in Kenya where I will probably retire in a few years. Winter time temps dip down to 23C degrees (June) so no need for radiators just air con to keep cool at night.

[bigjohn]

1 hour ago, lol-lol said:

 

This assumes that pension investments do better than inflation which they have not been doing over the last two years

 

With pensions it's best in stocks etc as although they go up and down you need to look at the long term. The FTSE 250 has done about 7% per year over the last 4 years, and actually my Standard Life personal pension seems to have done better than that over 30 years.

 

In the last few years it is wise to move to stable ground (that's where I am at now!)

Edited 7 April, 2019 by bigjohn

[lol-lol]

32 minutes ago, bigjohn said:

 

With pensions it's best in stocks etc as although they go up and down you need to look at the long term. The FTSE 250 has done about 7% per year over the last 4 years, and actually my Standard Life personal pension seems to have done better than that over 30 years.

In the last few years it is wise to move to stable ground (that's where I am at now!)

 

April 2014 FTSE 250 was 16000 points.

April 2019 FTSE 250 is 19500 points.

4.4% so a little bit better than inflation.

I presume you include feed back dividends in to the pot ?

 

FTSE 100 not done so well as above.  FTSE 250 might not perform quite so well with BREXIT.  

 

 

 

 

[bigjohn]

3 hours ago, lol-lol said:

 

April 2014 FTSE 250 was 16000 points.

April 2019 FTSE 250 is 19500 points.

4.4% so a little bit better than inflation.

I presume you include feed back dividends in to the pot ?

 

FTSE 100 not done so well as above.  FTSE 250 might not perform quite so well with BREXIT.  

 

 

 

 

 

 

Depends on how you measure it  - granted - at either end of that time frame things were a bit fluid! However still over a long period I still think it is the place to be. Any bonds/cash stuff just goes backwards in the long run.

 

Brexit , who knows!

 

Mine has just been a Standard life Managed Pension Fund - I've just left it to it after paying into in in the late 80's/ early 90's. There have been numerous recessions etc during the life of this policy.

 

PS I was convinced by the goverment at the time to "Contract Out" - In the long run that was a mistake!

 

 

 

 

 

 

Edited 7 April, 2019 by bigjohn