Top 5 financial things to do before labour get in?

[98elise]

mikeiow said:

98elise said:

Panamax said:

I'll be staggered if they can keep their fingers out of Council Tax for more than 30 seconds.

It'll be interesting to see if and if so from which direction they attack "widespread tax avoidance" through ISAs,
a) Lower the annual investment limit from £20k to, say, £10k? Pretty benign.
b) Apply an overall cap on a person's ISA holdings value beyond which no further inputs can be made? Pretty benign.
c) Apply an overall cap on a person's ISA holdings value beyond which all ISA benefits are lost? Seems too complex for reality.
d) Apply a cap of, say, £10k on how much can be withdrawn "tax free" from an ISA in any one year, everything above that being subject to Income Tax? OUCH!!!!!

Use it before you lose it....

I can certainly see changes to ISA's. A lifetime cap would be my guess.

Not sure I can see that….discouraging saving feels like a daft thing to put to people, regardless of political persuasion. I guess only time will tell.

I agree in principal, but the vast majority of people don't have a spare 20k a year to put away (or 40k as a couple), so it's a big benefit for those that can. The yearly allowance used to be 5k

I do very well from my ISA S&S investments (far better than property) and its all tax free. I'd love it to continue but I don't think it will.

Until recently pensions had a lifetime allowance so its not a new concept to cap tax free saving.

[Puzzles]

98elise said:

Until recently pensions had a lifetime allowance so its not a new concept to cap tax free saving.

But it was a lot higher before it was cut.

In 2006/07 it was £1,500,000 and last year it was £1,073,100.

[mikeiow]

Puzzles said:

98elise said:

Until recently pensions had a lifetime allowance so its not a new concept to cap tax free saving.

But it was a lot higher before it was cut.

In 2006/07 it was £1,500,000 and last year it was £1,073,100.

& it wasn’t Labour who reduced it

The UK is in something of a fiscal muddle, so funds will need to be gleaned from somewhere….but despite this thread, the past 14 years haven’t been covered in financial glory

[911hope]

ferret50 said:

I bought into two Structured Products that pay quarterly interest, one in a GIA in 'er indoors name and the second was a matured SP held in an ISA in my name.
'er indoors is not, yet, drawing from 'er SIPP, so this takes up a chunk of 'er Savings Allowance as far as HMRC is concerned, as I have a modest pension from the RAF I have to pay tax via PAYE so the ISA wrapper helps me out.

My fear now is that State Pension will drop into PAYE next April, thus nobbling some of 'er indoors tax free income.

I'm less concerned about Ikea Starmer becoming hated for being the PM in charge when State Pension becomes taxable for the first time in history!

State pension is already taxable, if it contributes to income beyond the tax threshold.

[98elise]

911hope said:

ferret50 said:

I bought into two Structured Products that pay quarterly interest, one in a GIA in 'er indoors name and the second was a matured SP held in an ISA in my name.
'er indoors is not, yet, drawing from 'er SIPP, so this takes up a chunk of 'er Savings Allowance as far as HMRC is concerned, as I have a modest pension from the RAF I have to pay tax via PAYE so the ISA wrapper helps me out.

My fear now is that State Pension will drop into PAYE next April, thus nobbling some of 'er indoors tax free income.

I'm less concerned about Ikea Starmer becoming hated for being the PM in charge when State Pension becomes taxable for the first time in history!

State pension is already taxable, if it contributes to income beyond the tax threshold.

Agreed. From a tax perspective its just income.

[The Leaper]

98elise said:

911hope said:

ferret50 said:

I bought into two Structured Products that pay quarterly interest, one in a GIA in 'er indoors name and the second was a matured SP held in an ISA in my name.
'er indoors is not, yet, drawing from 'er SIPP, so this takes up a chunk of 'er Savings Allowance as far as HMRC is concerned, as I have a modest pension from the RAF I have to pay tax via PAYE so the ISA wrapper helps me out.

My fear now is that State Pension will drop into PAYE next April, thus nobbling some of 'er indoors tax free income.

I'm less concerned about Ikea Starmer becoming hated for being the PM in charge when State Pension becomes taxable for the first time in history!

State pension is already taxable, if it contributes to income beyond the tax threshold.

Agreed. From a tax perspective its just income.

And that's why I paid 26% of my gross income in retirement to HMRC in 2023/4. That %age has increased most years during my near 20 years of retirement. Makes me wonder if it was worth me working hard, saving lots, planning ahead etc during my 45 years of employment.

R.

.

[mikeiow]

The Leaper said:

And that's why I paid 26% of my gross income in retirement to HMRC in 2023/4. That %age has increased most years during my near 20 years of retirement. Makes me wonder if it was worth me working hard, saving lots, planning ahead etc during my 45 years of employment.

R.

.

The real question is whether you enjoyed your world in 2023/24.
Did you?
If so, then keeping 74% of your income isn’t too bad to enable that enjoyment, surely?

Paying tax is helping the Country keep working.
Without a crazy oil wealth fund, you need to gather those taxes to ensure your bins are emptied, schools working, NHS giving you what you need, etc etc etc.

Were you paying 40% tax when working? If so, 26% sounds a steal! If not, it still doesn’t sound horrendous.

[okgo]

Is taking half of my earned income not enough for the gov?

That is what grates. More more more. Despite the fact that everything they want more of has come from almost 50% taxed income.

[Puzzles]

It doesn’t motivate people to work harder that’s for sure. If you want growth..

[ooid]

We need a quite similar system to Swiss. All taxes based on local.

[Michael_B]

ooid said:

We need a quite similar system to Swiss. All taxes based on local.

Yes. there is a lot more local tax-raising: 12% of my annual income tax goes to the federal govt, 66% goes to the canton and 22% goes to the commune/parish. 88% is a lot, but not all.

Moreover, behind those basic figures is a complex system of 'péréquation' (or levelling up, if you like) where the federal government compensates cantons with fewer financial resources, those with geographical challenges (mountain areas with low population density), and those with socio-demographic issues (higher levels of deprivation/poverty/unemployment/etc). The central government essentially taxes certain rich cantons more in order to subsidise the poorer ones, with a total budget of about 0.7% of GDP being redistributed.

Also the Confederation does give out grants directly to cantonal governments to help fund infrastructure projects which are deemed to be beneficial to the country as a whole, so it's not quite as simple as all taxes being local.

[ooid]

Yes, the most stable country in the history of mankind,( some can say that probably the most boring). It is the reality.

What makes a CHF almost safe haven, this stability. UK has loads potential to be one, but it needs to face some fundamental issues, hard and brutal facts.

[LivLL]

okgo said:

Is taking half of my earned income not enough for the gov?

That is what grates. More more more. Despite the fact that everything they want more of has come from almost 50% taxed income.

Don't forget when you spend some of that 50% left, that is also taxed too.

One wonders just where all this money goes....

[ferret50]

The Leaper said:

98elise said:

911hope said:

ferret50 said:

I bought into two Structured Products that pay quarterly interest, one in a GIA in 'er indoors name and the second was a matured SP held in an ISA in my name.
'er indoors is not, yet, drawing from 'er SIPP, so this takes up a chunk of 'er Savings Allowance as far as HMRC is concerned, as I have a modest pension from the RAF I have to pay tax via PAYE so the ISA wrapper helps me out.

My fear now is that State Pension will drop into PAYE next April, thus nobbling some of 'er indoors tax free income.

I'm less concerned about Ikea Starmer becoming hated for being the PM in charge when State Pension becomes taxable for the first time in history!

State pension is already taxable, if it contributes to income beyond the tax threshold.

Agreed. From a tax perspective its just income.

And that's why I paid 26% of my gross income in retirement to HMRC in 2023/4. That %age has increased most years during my near 20 years of retirement. Makes me wonder if it was worth me working hard, saving lots, planning ahead etc during my 45 years of employment.

R.

.

I agree that SP is part of one's taxable income, but is currently less than Personal Allowance which is £12570. Income above this level is taxable except when it is 'Savings Interest'. We all get £1000 tax free interest....unless you are a higher rate tax payer.....but there is an additional allowance of £5000 Savings Interest available if you have no other taxable income.

Therefore.
£12570
£1000
£5000

So total tax free allowance for 'er indoors who just has State pension and Savings Interest is £18570.

Now if State Pension rises above £12570 she will lose £1 allowance for each £1 over and the tax will be collected via PAYE, in this way a pensioner will start to pay tax on just their basic State Pension.

So I stand by my original statement that if State Pension rises above £12570 next April, Ikea Starmer will be the first PM to tax basic rate pensioners.

[okgo]

LivLL said:

Don't forget when you spend some of that 50% left, that is also taxed too.

One wonders just where all this money goes....

And those crying out for me to pay more almost always contribute fk all. It drives me mad.

I think the UK is a bit st anyway, could see us moving elsewhere if it gets too silly.

[RSTurboPaul]

Michael_B said:

ooid said:

We need a quite similar system to Swiss. All taxes based on local.

Yes. there is a lot more local tax-raising: 12% of my annual income tax goes to the federal govt, 66% goes to the canton and 22% goes to the commune/parish. 88% is a lot, but not all.

Moreover, behind those basic figures is a complex system of 'péréquation' (or levelling up, if you like) where the federal government compensates cantons with fewer financial resources, those with geographical challenges (mountain areas with low population density), and those with socio-demographic issues (higher levels of deprivation/poverty/unemployment/etc). The central government essentially taxes certain rich cantons more in order to subsidise the poorer ones, with a total budget of about 0.7% of GDP being redistributed.

Also the Confederation does give out grants directly to cantonal governments to help fund infrastructure projects which are deemed to be beneficial to the country as a whole, so it's not quite as simple as all taxes being local.

I read that as saying you were paying 12% + 66% + 22% to federal and local taxes...


... but a 100% tax rate would seem a bit harsh

[Puzzles]

okgo said:

And those crying out for me to pay more almost always contribute fk all. It drives me mad.

I think the UK is a bit st anyway, could see us moving elsewhere if it gets too silly.

This was a point made by an expert i was listening to. IIRC the higher tax european countries spread the pain more evenly than the UK. If everyone were to pay in an extra 1k which improved services it would be far more palatable.

[markymarkthree]

ferret50 said:

So I stand by my original statement that if State Pension rises above £12570 next April, Ikea Starmer will be the first PM to tax basic rate pensioners.

Well you will be pleased to know that there is no chance of that happening.

[ferret50]

markymarkthree said:

ferret50 said:

So I stand by my original statement that if State Pension rises above £12570 next April, Ikea Starmer will be the first PM to tax basic rate pensioners.

Well you will be pleased to know that there is no chance of that happening.

Well, perhaps not April 25, but if personal allowances are not raised then it is certain for April 26.

And remember, Dick Turpin had the decency to wear a mask.......

[markymarkthree]

ferret50 said:

markymarkthree said:

ferret50 said:

So I stand by my original statement that if State Pension rises above £12570 next April, Ikea Starmer will be the first PM to tax basic rate pensioners.

Well you will be pleased to know that there is no chance of that happening.

Well, perhaps not April 25, but if personal allowances are not raised then it is certain for April 26.

And remember, Dick Turpin had the decency to wear a mask.......

Nah, i cant see the gov pension going up nearly £2000 in 2 years. April 2027 is a poss.