So Will This Appease Middle England Enough ?

[youngmafbog]

He is damned whatever he does, but will this help allay fears from Middle England that the Tories dont care about them, after all that is what must be top of GO mind.

http://news.sky.com/story/1228287/budget-2014-the-key-points-you-need-to-know


:: No income tax on first £10,500 of income

::New annual Isa limit for savers of £15,000, from July 1

:: 40% higher rate threshold up to £41,865 from next month

:: Fuel duty rise planned for September "will not take place"

:: Married couples tax allowance up to £1,050

:: Tobacco duty to continue to rise 2% above inflation; beer duty to be cut by 1%; other alcohol duties to rise in line with inflation

:: Inheritance tax scrapped for emergency services

:: Tax on homes owned through a company to be extended from those worth £2m to those worth more than £500,000

:: 15% stamp duty on homes worth more than £500,000 bought through companies

[carolegif]

Nothing for pensioners. Only ones with money to save.

[New Judge]

What type of advantages for pensioners who have no money to save are you suggesting that the Chancellor might introduce, carolegif?

[rockyracoon]

That married couples allowance, is it for all married couples or just when one of them is born before 1935?

[carolegif]

No tax threshold increase, it has been frozen for 3 years. I get less than the basic pension, so next year I could let my OH use some of my tax allowance, but not until 2015.

[Canary42]

Typical end-of-term Tory Budget - con the voters then after the election - BLAM again.

[New Judge]

The allowance that is being mentioned is not an "allowance" in the true sense of the word. What is being proposed (and what I believe the government has ruled out just yet, though I may be proved wrong) is the facility for one person in the marriage to transfer up to £1,000 of the tax free allowance to their partner. So (for example) the husband of a couple where the wife does not work will be able to acquire £1k of her tax-free allowance to boost his, thus saving him £200 pa (assuming he is a basic rate taxpayer).

[carolegif]

I don't pay tax. oH has a small private pension he pays tax on. I will be able to help him with my allowance.

Also, what about duty on wine? Never mentioned!

[mikey4444]

Very little for the poorer people in our country, and precious little for the majority, whether they live in Middle England, Middle Wales, or Middle Scotland. The cost of living is rising and is out-pacing the rise in incomes, so are we better off ? No, not really.

I am particularly worried about his plans for pensions. The whole point of saving into a pension plan whilst in work, is that there a pension when you retire. The carrot is the generous tax relief on contributions and the stick is that you have to use at least 75% of your pension pot to buy an annuity, ie a pension for life. Now he proposes to allow people to squander all their pension pot on retirement, leaving them very little income in retirement. The possible consequence of this is that people will then be reliant on state aid to exist in their old age, and thus a further burden on the tax payer.

This makes no sense whatsoever. Even Mrs Voldemort's Chancellors never went that far.

[rockyracoon]

Thank you NJ

[youngmafbog]

The problem is Mickey with annuities the majority will never get the pot back, even though the insurance company has a big pot for many years to invest. I understand where you are coming from but the current situation is dire and skewed in favour of rip off insurance companies.

Poorer people have a higher tax threshold. Better than a kick in the teeth I would suggest?

thank you for your contribution canary, I would have expected no less.

[emmie]

don't councils have an obligation to fix potholes, why do they need more money, or does it come out of another type of tax?

[emmie]

i have a pension, it's so small to be almost invisible, i was obliged to take it out whilst in work, sadly it didn't last long, as i was out of work before i could say bobs your whatsit, however the returns of the money i paid into the pension scheme wouldn't keep a budgie alive never mind me. the pension people pay me a startlingly low amount per annum, and has cost me more problems that i care to think on, if i could have taken the lot when i had the chance i would have done, they didn't allow it, so my little bi annual pension is paid, not worth spit

[mikey4444]

My sympathies emmie on your tiny pension, although it seems the main reason why it is so small is that you paid very little into it, for a very little time. But of course I understand your circumstances didn't allow you any other path.

New pension rulings, passed a few years ago, would probably have defined it as a "trivial pension pot" and would have allowed it to be commuted to a lump sum, and paid out to as single payment.

The difficulty with this newly announced chang is that it blows a hole in what a pension was originally designed to do. If people are going to be allowed to blow their whole pension pot in one go, then the raison d'etre will be lost forever. I worked as a Financial Adviser for many years and it was obvious to me then that nowhere enough people in the UK were saving anything like enough for retirement. its a ticking time bomb, and today's announcement has only made it worse.

The days of final salary Company pension schemes are largely gone now, so what remains are pretty much the same as personal pension plans. At retirement age you have a pot of money, of which you can take 25% as a tax-free lump sum. You are encouraged to save into a pension by the tax relief on your contributions, which for a higher-rate tax payer is a very generous 40%. But it has always been the rule that you have to convert the remaining 75% into an annuity, or in plain English, a pension for life.

What the Chancellor appears to have announced today cuts through the whole point of pensions. The details have yet to emerge fully but its a retrograde step and will only build up problems for the future.

[emmie]

i would have paid more but i was got rid of, made redundant in other words.

[mikey4444]

NJ...he could have helped pensioners by increasing the personal tax allowances for older people, sometimes called age allowance. He could also have announced an increase in basic State Pensions.

[emmie]

i had been in pension schemes before but this one was going to keep me in luxury, well not quite, but i can only dream, i was not allowed to take the money as a lump sum, so they pay out twice a year,

[mikey4444]

I understand emmie and I sympathise.

I am too much of a gentleman to ask a lady her age but do you have the State Pension coming in ? The Chancellor could have helped OAP's by raising the basic State Pension. At present it barely keeps pace with inflation and actually fails to keep pace when some expenditure is taken into account. This is not a Party Political point but price controls on the huge raises in gas and electric bills would go a long way to help everybody, not just AOP's, especially in the winter months.

In the course of my job a Social Survey Interviewer, its a complaint I come across all the time when conducting the Family Income Survey, for the DWP. High energy bills for poorer people really hurts.

[Boto]

Carolegif, what do you mean by 'No tax threshold increase, it has been frozen for 3 years'?
Wine will come under 'other alcohol' -rise in line with inflation.

[emmie]

i was only interested in this because i read the other day that he was going to change the rules, that anyone with a low pension pot, say in my case, might be able to cash in, its not worth much, but anything helps.

[mikey4444]

The rule on "trivial" pensions has been in force for a few years now emmie. In order to qualify to be defined as trivial, there are a lot of boxes that need to be ticked, and yours may not have qualified as such...its impossible to decide without knowing your exact details. But if the pension pot was very small, and it was your only pension, its likely that you would have qualified. But it couldn't have been applied retrospectively.

But the "trivial" regulations, and this new change are not the same thing.