UK Pensions have changed. For now...

[@michaelrussell6218]

Great article, my wife's been trying to get through for the last 2 months. It's virtually impossible 😢

[@PrinciplesPersonalFinance]

Great video and insights. Agreed that the IHT position for pensions, especially pre-75 death benefits seems to be an easy target going forward. Not heard of a 'pension nil-rate band' concept before but could see how that might work! Laughed out loud at the 'conspiracy nutters.' I feel your pain. 🙃

[@MeaningfulMoney]

It's a mark of success on KZbin that those nutters come out and slither into the comments section. So I take it as a win! (Cheers, George!)

[@maltesetony9030]

I'll never come close to a million quid in a pension fund - so I'll have to slum it on a DB civil service pension + state pension + investments. We all live on the same planet - but in very different worlds (at least financially).

[@MeaningfulMoney]

It's true, Tony - inequality is here to stay, unfortunately.

[@sopissedoff]

Tony don't be so beat up ,others work hard without the privilege of a public servent pension that I am you,

[@nicklazenby2123]

Another great video Pete thanks again !!

[@MeaningfulMoney]

Thanks, Nick!

[@andrewhead6267]

Regardless of party politics. Since 2010 the government has changed pension rules and allowances , (including the state pension), to make the situation significantly more complicated. There really should be a consensus on pensions so that there is certainty on a product that many will need to plan to pay into for 40 years or more. For most people, pensions are their most significant financial asset. Probably I think inheritance tax is the way the Treasury will go for a wealth tax gain.

[@chapman9230]

Put in the max you can before labour get in and reintroduce the LTA and hope your rights are preserved. Unless you are a doctor or Kier Starmar! Then no worries plod along as you wish.

[@outoutmtb1949]

I have a frozen pension £50000 i want to take as much as i can ie 25 percent tax free, will these changes allow me to take the whole pot without financial advice??

[@simonspencer3108]

Fabulous content! It seems to me like they are saying if you are over 55, retire in the next 18 months or so… Exacly what they are claiming to be trying to prevent…

[@albedo0point39]

Absolutely! And the higher yearly limits mean I can hit my pension targets earlier, so… 🤔 😆

[@MeaningfulMoney]

It can feel like that, right?!

[@edtheduck6219]

Or if you don’t retire, we change governments, and you are capable of triggering a BCE, do it before the first budget?

[@MrDuncl]

If they had any sense they would look at the Tax Free Lump Sum. A colleague who retired last week seemed to be obsessed by it. Not that surprising when it can be worth four or five years salary.

[@christopher554]

Out they go at the next election 🎉

[@ritakohli5557]

Love watching your videos. Learn lots! Keep it up!

[@grahamjacob97]

Due to a divorce I took money out of a UK pension (to give to my ex-wife) while I was still working in Australia and never expecting to work in the UK again, this triggered the MPAA. Months later I got offered a job in the UK! My income is such that with putting 5% in while my employer also puts in 5% (and now 7.5%) means that I'm well over the former £4000 limit. For a few years now I'm paying around £2400 in extra tax (40% of the excess over £4000). Moving this to £10K will save me most of this. I still don't understand why it needed to be so punitive. Surely if the intention was to avoid people getting the tax free benefit twice then the simplest thing to do would be to look at what was drawn down and reduce the tax benefit on the same amount going in?

[@Jeffybonbon]

Crack on I am a Landlord and the Tax changes they have used against BTL have backfired if they carry on mucking around with pensions it will do the same

[@Lord-Brett-Sinclair]

So are we, very happy with the long term hassle free, capitol growth and returns. Our bread and butter.

[@dominic8218]

Great video, clearly explained as ever 😉

[@kevinmcguire1049]

Great video and filled in the details. Really disappointing governments keep tinkering with the rules as it makes it very hard to plan and creates unforeseen consequences. The LTA makes little sense with limits on annual contributions. The mistake this chancellor has just made is the not enforcing some form of drawdown rules in retirement. In the USA there is a formula set by the tax authority that forces annual minimum distributions from a set age from the equivalent of a personal pension. This ensures people withdraw (and pay tax) on their money for the purpose they saved it for, and not a way of avoiding tax which this chancellor has just created.

[@robertmarsh3588]

Thanks for the video!! It is so confusing knowing what to do. I have some DC funds just under the LTA and two very small DC schemes that will kick in at 60 and 65 (a few k each) that mean the total comes to just above the LTA. I've been sacrificing any spare £ to add to my pension pot since paying off my mortgage as I'm planning to retire at 60, which is next year. What on Earth should I do? Labour's announcement has left me in turmoil (and frankly lost my vote). Politicians of any party shouldn't be playing with our futures. Shouldn't these things get some cross party agreement for consistency to help us plan?

[@MeaningfulMoney]

They should absolutely be the subject of cross party agreement, you're right. I can't tell you what you should do, except to seek professional planning advice. Sounds self-serving, but having someone you trust to walk through these decisions with you will be priceless: meaningfulmoney.tv/work-with-pete

[@ghgjftythnhcfghdty]

There have been recent indications that Labour may remove some of the Inheritance Tax allowances or reduce the value of the IHT nil rate bands if they get into power in a couple of years time. This could have FAR greater consequences for millions of middle earners than these pension changes which, let's be honest, affect a relatvely small number of quite wealthy people. If Labour act as media articles suggest is possible, people's estates could be hit with much larger tax bills when trying to pass on their house and savings to their children after their death. This is worth keeping an eye on.

[@presterjohn71]

Labour won't do much. They will cap the unlimited amount down to £1.5 or £2m or something and might drop the £60k for SIPP down to £50k and for ISAs down to £30k. It will be a trimming exercise rather than throwing the baby out with the bath water.

[@MeaningfulMoney]

You may well be right - we'll see!

[@simonnewman4240]

Thanks for the taking the time to make the video and explain so clearly Pete

[@MeaningfulMoney]

Thanks for watching, Simon!

[@scotchegg6422]

In your expert opinion, what would you say the average DC pension pot is upon retiring?

[@kevingoodchild3049]

thank you Pete, very clear 👍

[@MeaningfulMoney]

Cheers, Kevin!

[@MartinHopkinson]

Thanks for addressing my question in the video, Pete. It’s very muddy water when a DC pension and a DB pension combine to give 100% LTA. Although I crystallised at 100% LTA (in 2016), I certainly haven’t had anywhere near £268275 tax free cash!

[@MeaningfulMoney]

I reckon you’ll end up being a victim of these changes, or rather your TFC entitlement will. It looks like people in your situation in future should probably take TFC from the DB scheme first. Not helpful for you though…

[@MartinHopkinson]

@@MeaningfulMoney It’s mildly disappointing but I really have to look on the bright side! I’m free from a substantial LTA charge and will get access to funds which were, for all practical purposes, locked away until age 75. No sympathy necessary!

[@UK-Property-Tax-Accountants]

The 55% tax is a great point and will be confusing to many in the future

[@enigma1000]

Thé removal of the LTA will cost the Treasury billions just to solve a problem of overly generous NHS pensions for highly paid doctors and consultants. What a mess. A person local to me has, lucky for him, a £3m pension pot. He had an LTA problem and has just been given a £0.5 million tax break. Absolute madness.

[@tonykelpie]

Very helpful, clear and timely. Thanks

[@MeaningfulMoney]

Cheers, Dan - you're welcome!

[@alangordon3283]

No change for me I’m continuing the motion . I’m unlikely to have come up against the LTA before this revolving door policy .

[@racarth1]

Hi Pete, thanks for the information as always. How do you think about saving through a savings ISA with some fixed interest rate vs saving into a sterling money market fund through e.g. vanguard stocks and shares ISA? The context here is that these are savings for the near term (~5 yrs) for a house deposit; given the short horizon, capital preservation is important and so investing into stocks and shares isn't an option.

[@PatriciaMumford-mh7oi]

Good video explaining a horrifically bad tax. I am pretty certain it was net negative from a tax take perspective. For example I retired aged 55 to avoid paying any LTA tax and now pay about 1/4 of the income tax I was paying when working. So just for me the government is about £40K a year worse off. Multiply that by all the people reducing hours or retiring early and you can see why getting rid of the LTA was a no brainier. I did write to the pension minister in 2014 telling her what would happen if they kept reducing the LTA. They eventually worked it out for themselves! The big decision for me now is to decide whether to stop drawing down pension and use ISA funds instead.

[@MeaningfulMoney]

To your last point, IHT should be a factor here, assuming you have family to leave your estate to, and assuming you have sufficient wealth for IHT to be a problem. As things stand, pensions are outside your estate, so spending down your ISAs has the added benefit of reducing IHT.

[@silversurfer6758]

Is there any other country in the world that imposes something similar to the LTA?

[@MeaningfulMoney]

Dunno. It's a stupid idea, so maybe it's uniquely British!

[@richardperring9762]

Great video Pete. I'm happy the LTA has gone even though I'd be surprised to exceed it myself. I'd be happy to see a pension plan included in people's estate as in my opinion a pension is meant to be about saving for your own retirement not inheritance tax planning

[@MeaningfulMoney]

I think it'll happen, Richard - we'll see, eh?!

[@AMi-tp3hz]

I agree with your argument about the reintroduction of the LTA and the inheritance tax benefits. However, I fail to see how it would be more fair to have a flat rate of tax relief. Let us forget for a moment that progressive taxation is inherently unfair. If you only get say 30% tax relief but have a 47% marginal tax rate (incl. NI) that means you will pay 17% tax up front on your pension contribution. If you become a basic rate tax payer in retirement you will get a tax saving but any part of the money withdrawn at a higher rate or above in retirement will see you worse off than if you just paid the tax up front. Out of £100 you would have kept £53 but without making contributions but if you pay into a pension and pay higher rate on the withdrawn amount you only get £100*(1-0.17)*(1-0.40) = £49.8 and of course it is even worse if you are still an additional rate tax payer. It is far fairer to allow pension contributions to be made tax free and then simply charge tax when money is withdrawn.

[@jocar-1735]

Some interesting comments on the LTA and is it or isnt it going to be around in the future. I hope that it is gone and gone for good since an annual pension input maximum allowance is in place anyway. However, I think that pensions being outside of an estate for inheritance tax should only apply to a spouse and not to anybody else, so that pensions are treated similar to property, ISA etc.

[@MrDuncl]

With savings interest rates going up and income tax thresholds frozen many more people will be paying tax on their savings. That is why I am paying all of a recent pay rise into an AVC. Even if the return on the fund is 0% it is still worth over 30% to me.

[@jocar-1735]

Given that the LTA is being abolished from April 2024, if a person has multiple pension pots can the 25% tax free cash now be associated with one pension pot only ? For instance, if a DB pension were to be crystallised without taking the TFLS in order to have higher guaranteed index linked pension income would this DB pension crystallisation adversely affect the amount of TFLS that could be taken from a DC pension ? With the LTA in place I think that the above DB pension crystallisation without taking a TFLS would have used up some of the LTA and so could compromise the amount of TFLS that could be taken from a DC pension this being maximum 25% of LTA ? Grateful for your thoughts.

[@MPD90]

So frustrating how politicians constantly change the rules.. makes it impossible to optimise planning for the future. It's literally impossible to guess what the rules will look like 20+ years from now, yet we have to make decisions today to lock money away for 20+ years against an unknown ruleset. One thing I don't quite agree with in the video is @9:20 when you say they can't take the tax relief away that you get next year in the future. Seems to me they absolutely can if they reintroduce the LTA and you find yourself over the threshold. Tax relief today at 45% gets eradicated and then some by LTA tax at 55% (assuming likely to be a higher rate tax payer). Transitional arrangements may well protect those who are over the allowance at the point of the change, but not those who are on a trajectory to do so at the cost of other investment options. So if that were to happen, it would be better to have just taken the income tax hit up front arguably. Of course, crystal ball territory. Anyway thanks for the informative video, I always find your content really useful.

[@MAXERNEST]

It seems to me the prudent people who don`t want to rely on the state get penalised for doing so, I used to work in Industry full time, went into the service sector due to redundancy, with Half the hours , didn`t pay any tax just token NI , this was to preserve my state pension ,to get the full amount , even so i will pay tax on this modest amount, not working :} as i have a small pocket money local authority pension, its gold foil not plated :} as for Labour don`t get me started ,i will never vote for Bendy knee ever :}

[@Alex-ek5fb]

Is the £268,275 still limited to 25% of the pension pot (so only £268,275 if you have £1,073,100 in your pension pot), or is it now possible to take that full amount on smaller pots?

[@MeaningfulMoney]

No, the maximum is 25% of your pot, or £268.275 whichever is lower.

[@minimad8793]

Gotta love the "whatever colour" quote. No chance of hitting the "LTA" unless someone gives me the winning lottery ticket but yes agree, have to work with what is dealt in the now rather than worry later on. Thanks Pete :)

[@MeaningfulMoney]

Thank you, as ever, Mini Mad!

[@tancreddehauteville764]

Pensions should not be exempt from IHT. This is a ridiculous situation - for the simple reason that personal pensions should not be a vehicle for IHT avoidance and I look forward to this loophole being closed. Other taxpayers should not have to pay for a tax avoidance scam that benefits the wealthy. What a lot of people forget is that there is no such thing as a 'free lunch' when it comes to tax - any giveaway needs to be made up for somewhere else.

[@MeaningfulMoney]

That last point is true enough - any tax advantages given somewhere are paid for elsewhere.

[@Mr35000000]

Makes me wonder if its worth exceeding the LTA, even though you can. Upto the LTA you can get 25% tax free, once its exceeded all withdrawals are potentially taxable. Would be good to know if it's worth going for a bigger pension pot or aiming to hit the LTA and look at funding other investments instead. Obviously ISA's, but maybe VCT, if they are fully funded?

[@narinderahluwalia4774]

Fabulous.

[@MeaningfulMoney]

Thank you Narinder!

[@pw3591]

So am I right in saying for somebody who earns say £35k per year, this has not helped them one bit, as they can still only put in upto 100% of their salary (£35k). ie. they couldn't transfer any additional cash from other savings into their SIPP over and above what they earn ? So this really has only helped people that are already very well off / earn well above the national average salary.

[@MeaningfulMoney]

That's always been the case, though - nothing has changed on that score...

[@arlefsuarez]

Are NHS and State pension the same?

[@geowallace9758]

UK has the worst pension scheme in the EU. HOW IS THAT????

[@jamesorr8297]

hi pete can you do a video on short term money market funds as a way to hold cash in a sipp?

[@kevinpreston5794]

Many thanks for the video Pete. Loved the comment about it being madness not to take advantage of the changes where/if you can just because of what may or may not happen in the future. Like investing, none of us can predict what is going to happen further down the line; we can only act on what we know now. Time in the market not timing the market 😉

[@MeaningfulMoney]

Preach, Kevin! (And thanks for watching!)

[@rogerandout808]

Thanks for the great summary - I can't see much has changed though for accumulators ... just lump in!. Personally speaking I'd think the IHT benefits would come under pressure in the future as I think the IFS did a hit piece on this earlier in the year. I'm not sure that a flat rate would be applied on reliefs - so many people (including govt DC schemes I think) contribute through salary sacrifice and already bloated and inefficient tax system would become even more bureaucratic. I was chatting to an overseas friend and they have minimum withdrawal rates on their retirement plan, if a government want's to ensure its tax take it might do that.

[@MeaningfulMoney]

Minimum withdrawal rates is an interesting idea - i can see that working...

[@simoneade2819]

As an expat who has benefited from the Swiss private pension system for many years. The changes mean I now have the option of returning to the UK and becoming tax resident there, as I approach retirement. Before the buget the Lifetime Allowance tax treatment made that financially prohibitive. Unintended consequence, I’m sure. I never understood why you limit both annual contributions and then investment success at the same time, was always an illogical system!

[@alastor543]

LTA doesn't apply to foreign pensions unless the foreign pension received UK tax relief. In your case, it doesn't sound like your Swiss pension would have.

[@chapman9230]

The changes to the LTA over the years are so annoying. So difficult to plan. I let slip to my friends that I was heading towards it. I was so shocked by their hostility towards me. Funny thing is that they are in bigger houses with more expensive cars, earn more and yet are resentful that I have built up such a pot. I paid in so much extra way back to improve my position and it was rather difficult at times. When I explained the tax for the exceeding LTA and its potential impactnon me they were very happy indeed. Presently they are annoyed and supportive of labour’s position to reintroduce it. Green eyed monsters!

[@Deedeevenice]

Time to re-evaluate the friendship weight! Time to let a few go😂. Seriously though, there’s constant stream of people whose mantra is “it’s alright for some”! HOW? How is it alright for some? Everyone, every SINGLE PERSON has a choice of what and how to handle their finances! My grandad is old school, with zero political correctness, and had drummed into us “to be born poor is neither a sin nor your fault, but to die poor is solely your own fault and a sin to have ignored advice and waste opportunities “! Four siblings, all have been enrolled in Private pensions, from 21 years old! No ifs or buts, 1/3rd of your wages are your savings! Don’t keep up with the Jones’? Let them buy a brand new car, you do YOU! My brother retired at 55, my sister ay 56, and they now look after our parents needs, and they play golf 3 days a week! All because THEY planned their future! We are all a working class family from East End of London! Yes, it’s alright for US, nobody gave it to us on a gold plate! So, change your friends, they are not!

[@MeaningfulMoney]

I bloody love this, Deedee! 👊🏻

[@UK-Property-Tax-Accountants]

Another good video thank you

[@MeaningfulMoney]

Glad you enjoyed it - thank you!

[@simonlees6314]

Thanks Pete another great video, you mention paying into pension from your business - do you still need equivalent relevant income if you are making gross contributions as a company director?

[@MeaningfulMoney]

You're not limited to net relevant earnings when making company contributions, no.

[@MGE0007]

What happens when you live (and work) in another country..but have the bulk of your pension in the UK.. How does the tax work if you leave your pension in the UK?

[@MeaningfulMoney]

Always keep a UK bank account, for a start. Have your UK pension paid into that. Any tax you pay will likely be the subject of a double taxation agreement, so you shouldn’t also then be taxed in your adopted country

[@alastor543]

Generally speaking by way of the tax treaties, your new resident country has exclusive taxing rights to the pension. Best to look at individual treaty to confirm.

[@shanecrosby3492]

The £10000 limit on contributions due to accessing your pension already does that include employer contributions?

[@MeaningfulMoney]

Yes, it does

[@gordoncooper9105]

Excellent video as always. I have fixed protection at the old £1.25 limit. To preserve this I havent contributed to a pension for 6 years. Do I now start paying into a pension again , abandon the fixed protection, and hope labour dont reintroduce it? I work for a Local authority so am missing out on a valuable final salary pension, but reluctant to sacrifice the protection I have.

[@malcolmshelley4999]

I have exceeded the LTA in my SIPP, and don’t need to utilise the pension. To mitigate my IHT liability, will I be allowed to once again make payments into my SIPP?

[@MeaningfulMoney]

Yes, subject to you having the earnings to justify the contributions

[@jckvideostv2874]

Why my grandma not recieving state pension?from january 2023 to present..😢😢

[@juliawigger9796]

Something is really wrong here. May I suggest you contact Age Concern, they give free help and advice, will even fill in forms for her. I presume she's over 66 years old .?

[@Dazzy1107]

Great informative video uncle Pete, so no LTA police for the moment!

[@MeaningfulMoney]

Nope - good news!

[@Msmdis26]

I think the tax relief on pension contributions is tempting, especially as a business owner with the ability to make employer contributions as well. However, I think the advice that people ‘should’ do this is overly simplistic for those of us under a certain age. I’m in my 30s and I wouldn’t trust the government to make the age of being able to claim on a pension significantly north of 57 by the time I actually get there! As always, pensions should only be one consideration as part of a diversified investment portfolio

[@pataleno]

Great video. Yea the LTA is a nice problem to have. I’d love a million in my pension. inheritance tax on pensions would be a bigger grab and kicker for me. I’m also saving into my pension so my family are secure.

[@MeaningfulMoney]

Watch this speaker then, Pat. We’ll see what transpires in the coming years…

[@C-L66]

Great info as always, very pleased with changes as I had gone over LTA, and plan to start taking pensions Feb 25, so should be OK. Very interested how it effects tax free cash as will have 2 x DB’s plus AVC’s attached to both, plus DC pension. Could I take all the DC as the tax free part? Chris

[@MeaningfulMoney]

I think you'll need to be taking the DC scheme first and lock in the tax-free cash that way. There's still lots of detail to be worked out with this - watch this space over the coming months!

[@janeknight3597]

I think you are right about pensions IHT. I have recently discovered that capital inside a pension does not count when being assessed for care costs. This seems unfair to those of us taking an income from money saved in an ISA. Should any future govt have the “b…..s” to grapple with social care they may consider this another low hanging fruit. Great video as always.

[@MeaningfulMoney]

Hi Jane - it's a difficult path to walk for any government. Problem is that none of them look any further ahead than the next election!

[@MrDuncl]

Recently I was looking through some old video tapes (Betamax!). There was some news recorded after a film and one of the news headlines was proposals to sort out social care. That was at the tail end of John Major's Government in 1997 !

[@geoffhunter5049]

Great vid. I'm still confused about the MPAA. Does the state pension count as earnings for purpose of MPAA? Can I now put £10,000 into my SIPP if I get £10,000 in state pension but no other earnings and is it £10,000 gross? I'm currently living off savings but have drawndown from SIPP before the state pension kicked-in.

[@MeaningfulMoney]

The MPAA is not triggered by the state pension, only by drawing non-tax-free-cash from a DC pension. If you just took TFC from your SIPP, then the MPAA has not been triggered and you can pay up to £10k into your pension, as long as you have more than £10k of relevant earnings. Note, state pension does not count as relevant earnings.

[@shahinali71]

Thanks, great video. There is one scenario that you may not be covering and I’d appreciate your views on this. There are quite a few people who are below the old LTA, eg around the £600k-£700k mark, even with no further contribution the pot would grow past the LTA. These individual may have been redirecting funds to ISA’s or spouses pensions ahead of their own. Given the the LTA could be introduced in 2 years time, these individuals will still be below the new LTA, wont qualify for protection but are now much closer to the LTA and missed to opportunity to invest elsewhere. Is this a valid decision point we should be concerned about?

[@MrDuncl]

Good point. In the career average DB scheme I am in the existing pension will increase by 6% if CPI is over 5%. Over five years that would be a 33% increase before making any contributions.

[@AMi-tp3hz]

My understanding is that you can still get the protection even if you are under the new threshold you just cannot put more into your pension. However, it might still be worth it if growth will take you well above and the tax benefit outweighs any lost contributions etc. But probably worth running some sims first.

[@shahinali71]

@@AMi-tp3hz agreed, still be protected on anything below new threshold but it’s the growth I’m concerned about. Previous calculations the tax benefits on the way in become neutral on the way out if hit by the LTA. At which point ISA’s become the better option as you are not limited in what and when you withdraw with no tax to pay. I fear switching from isa to pensions now and the LTA being reestablished could put us in an worse position. Appreciate it’s not so simple, there are other things to consider such as IHT, but again there’s no guarantee pensions will provide a safe haven for that in the future. Perhaps hedge your bets, not going all in on pensions, spare some for ISA’s for those in this situation.

[@davidanderson7093]

Brilliant as always. Bit of a random one, however I have a SIPP which owns a lot of commercial property and growing; I know the protection around cash etc is a mixed bag, but in general if my SIPP provider was to go bust, would my properties still be safe, or would they be jeopardised in any way? Thanks for the info.

[@MeaningfulMoney]

Your properties would be fine, David, as you own them. Your SIPP provider going bust would be a pain, but your money is not theirs, and could not be used to prop up their operations.

[@davidanderson7093]

@@MeaningfulMoney really appreciate the reply, as well as all the very helpful advice you put out on this channel. Thank you 👍🏻

[@marcusnelson3520]

Is the personal allowance how much the employee can contribute or is it the sum of the employer and employee contribution? Thanks.

[@MeaningfulMoney]

If you mean the annual allowance then it’s the combination of the two. But if your income is below £40,000 (or £60,000 from 6th April) then personal contributions are limited to 100% of your relevant earnings.

[@marcusnelson3520]

@@MeaningfulMoney thanks, so employer contribution + employee contribution is going to be capped at £60k.

[@markkenyon8760]

Labour saying they will scrap the LTA only for Doctors is funny. They have to define "Doctor" first. Does a Research Doctor count? Doctor of Chemistry? well if they are biochemists maybe haha

[@itsmesaltax]

Is there a limit to how much tax free lump sum you can get? Do you get 25% even on 10 million if you have it?

[@MeaningfulMoney]

Nope - total tax free cash will be limited to £268,275

[@itsmesaltax]

@@MeaningfulMoney interesting thanks! I’m 27 and have 50K in my SIPP. Currently contributing approx 2000 a month atmo. Should I scale down?

[@stevem9754]

Great detail - "deep-end" indeed! Thanks :) but one question - the budget increased the annual pensions contribution allowance for earners from £40k to £60k pa (or from £4k to £10k pa if MPAA triggered) but has the pension contributions allowance of NON-EARNERS (including retirees making pension contributions in retirement) increased or stayed the same at only £2880 pa (=£3600 with tax relief)? Also can non-earners now also carry forward their pensions contribution allowance for up to three years as earners can?

[@MeaningfulMoney]

Allowance for non-earners still £3,600 gross and no, carry forward cannot be used. Even for earners, you can only use carry forward if you have sufficient salary in THIS year.

[@156dave]

Can you pay 100% of your state pension into your company DC scheme is this counted as income for mpaa Will this trigger pension recycling rules?

[@MeaningfulMoney]

State pension doesn’t count as relevant earnings, so you’d have to have another income to justify paying your state pension in. The state pension paying out does not trigger the MPAA. And it wouldn’t fall foul of recycling rules. HTH!

[@anjieismyname]

Should I sell my gilts?

[@terrymoney9718]

Good god , I've never been money orientated, but pensions are a minefield for me

[@MeaningfulMoney]

They are for most people, Terry! It’s why I have a job I s’pose…

[@terrymoney9718]

​@@MeaningfulMoney how do I contact you via email?

[@gufpott]

The Labour Party will not re-introduce the LTA because it carries too much baggage. Not only because it was originally a Tory idea (thanks George!), but because bringing it back will cause too much special pleading around historic protections which historically. Much easier for Labour to start with a clean slate and their own scheme to claw money from the pockets of people they deem to be "able to pay a bit more". So where would they pitch this test of "can afford to pay a bit more"? Let's be realistic, it's not £2M. There is not much difference between £2M and no limit. So is it £1.5M? Probably not - same argument applies. And then we get into a circular argument. Not £1M. Maybe not £700k. Maybe £500k. After all, people who can save £500k will most likely have been higher rate taxpayers, and they are in range of the "can afford to pay more" test. So that's my guess: something new and in the £500k-£700k range.

[@MeaningfulMoney]

We'll see, eh?!

[@alastor543]

Labour introduced the LTA in 2006. It wasn't introduced by the Tories. Osbourne did however keep cutting it following 2010.

[@gufpott]

@@alastor543 Thanks for the correction. For some reason, I seem to have accidentally associated the LTA with the Pension Freedoms over the years.

[@terrybrown3486]

Could I retire, buy an annuity to give me £10k p.a. and say that is income and pay it in to my SIPP?

[@MeaningfulMoney]

Nope. Pension income, including annuity income, does not count as Relevant UK earnings, so you’d be limited to contributing the £3,600 limit for non earners

[@davechandradasa6130]

Just rang inland revenue regarding Annual Allowance and earning . It was suggested that any monies where tax is applied is counted as earnings. Inland revenue said uk rentals count as earnings. Is this correct. Thanks for Video , I am using Jacksons after seeing you videos and podcasts.

[@MeaningfulMoney]

That’s definitely NOT correct. The definition of UK relevant earnings are in this page: www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100 Scroll down to the bit headed ‘Earnings that attract tax relief’

[@chrisking3595]

Pete, have you got any comments on pension contributions for higher rate tax payers in Scotland who start paying higher rate tax at a much lower amount than than the rest of the uk and also pay higher rate tax at a higher %

[@MeaningfulMoney]

I'm sketchy on that, Chris, sorry!

[@ReluctantBackpacker]

Hi Pete. How much protection would I get from the FSCS if my SIPP platform (eg Fidelity, Vanguard, AJ Bell etc) failed? Is the compensation capped at £85,000 or would I get up to £85,000 for every fund held? Or if the platform failed, would my individual funds remain intact, be ring-fenced and transferred to another provider? Does the “ring-fencing” of invested funds really work in practice? Is it wise to use multiple providers for big pots, spreading the risk of failure?

[@MeaningfulMoney]

That would work on an individual fund basis. If the platform went under, then the funds would be intact, up to £85k for each fund provider. If the fund provider went under, your funds should still be ringfenced away from their operating fund, barring massive fraud. I think it’s worth having as many accounts as it takes to feel comfortable.

[@davidanderson7093]

Brilliant as always. Bit of a random one, however I have a SIPP which owns a lot of commercial property and growing; I know the protection around cash etc is a mixed bag, but in general if my SIPP provider was to go bust, would my properties still be safe, or would they be jeopardised in any way? Thanks for the info.

[@albedo0point39]

One interesting point about the Tories completely removing the LTA, is that this is a ‘destructive’ action which will effectively remove the mechanisms and procedures for enforcing an LTA. If they’d just increased it to (say) 1.5 million, all those mechanisms would remain in place. So I don’t think Labour will have the capability to immediately re-impose it. I think they’d need at least a year’s run up for that capability to be rebuilt. The Tories did it this way on purpose.

[@MeaningfulMoney]

Fascinating point, this and I'm very much inclined to agree. Thanks for watching!

[@caparn100]

Do you think these increases will help push up share prices as a lot of the money will be used to purchase shares?

[@garyboi9779]

Very slightly but it wouldn't be enough to make any very large changes in the market.

[@MeaningfulMoney]

What Gary Boi said. Probably not enough to make a material impact on markets. There are far bigger macro factors that move markets.

[@chapman9230]

Is this a solution to the lta being re introduced. I am five years from retirement. By retirement, I will be overlife time allowance say by 150 k. So if Labour get in and LTA announced to be reintroduced, then crystalise 150 k before it is introduced? How long does it take to crystallise a pension pot?

[@tonykelpie]

The application process is relatively simple. In the past it has been dependent on stopping further pension contributions

[@albedo0point39]

I wonder how quickly they’ll be able to reintroduce the LTA. The Tories removed it on purpose (instead of just doubling it) - and they’ve got two years to disassemble the apparatus that collects it. I don’t think Labour will be able to immediately reimplement.

[@MeaningfulMoney]

I absolutely agree with this. I can't see it being reintroduced at all, and certainly not quickly.

[@MeaningfulMoney]

Crystallising a pension doesn't need to take long. If it's on a decent platform, it could only take a day or so. The LTA is currently cumulative though, so if you crystallised £150k - well within the LTA - then crystallised the rest, you'd still go over. Not an issue from 6/4/23 of course!

[@MartinHopkinson]

@@albedo0point39 I agree. I can’t begin to work out how they could re-introduce all the BCEs when the pension companies should, by then, have given up keeping records on crystallisation. For instance, in theory, no-one will know what my pot was worth when I crystallised it in 2016! So how will they test it at age 75 for growth? Besides which, I don’t think the announcement to re-instate it is nearly as popular as Labour thought it might be.

[@RossHbn]

👍

[@anth5122]

Pension Funds get bigger 😂

[@alexm7310]

Conspiracy nutters! Haha, excellent 😂

[@MeaningfulMoney]

Lol!

[@stuartb3690]

This is why I would never vote labour

[@EtonieE25]

Unfortunately l think we’re going to find because the conservatives reputation is now finished with the constant lies etc. once labour get back into power that’ll be it! They’ll be in power forever because of certain bodies of people who are growing rapidly in the UK who will keep voting them in 🤔 Then heaven help the rest of us with a few bob in our pockets ☹️

[@PDCRed]

Allowing the wealthy to hide away even more from tax at a time when the disabled adults and children have been oppressed for a decade is appalling. Depends what you value most I suppose.