Wages down 2% from April - pension

[ez8004]

As it has been stated previously, the headline 2% figure is very misleading and the money is taken from your gross pay.

 

Taking money from your pay to put into your pension is a great way to significantly reduce your tax liability. I effectively have 18% of my gross pay put into my pension so I don't get hammered by income tax.

 

Everyone is different and there is no correct way to save for your pension and at the same time become more tax efficient. If you belong to a union then see if you can get free financial advice as part of your membership. I did and it was definitely worth my time.

[truman]

Anyone started out working now is already in serious trouble because they'll go into retirement still having to pay commercial rates of rent because so many of them won't ever be able to buy a house.

 

So saving now is a good idea...

[Cyclone]

It should happen - your assumption is that the state pension will be liveable in the future ,it won't.

Anyone starting out in work now is going to be in serious trouble if they don't do something.

 

An alternative would have been to increase NI, workers and companies and then increase state pension amounts. It would have exactly the same impact and effect, but without introducing a new PFI company to manage the pensions and an entire extra raft of laws and bureaucracy.

But why utilise an existing, well understood framework, when something new that will benefit private industry can be introduced instead.

 

---------- Post added 07-04-2018 at 09:05 ----------

 

As it has been stated previously, the headline 2% figure is very misleading and the money is taken from your gross pay.

 

Taking money from your pay to put into your pension is a great way to significantly reduce your tax liability. I effectively have 18% of my gross pay put into my pension so I don't get hammered by income tax.

 

Everyone is different and there is no correct way to save for your pension and at the same time become more tax efficient. If you belong to a union then see if you can get free financial advice as part of your membership. I did and it was definitely worth my time.

 

It's fairly simple in reality, the pension contribution comes out first before tax is applied.

Of course people who are auto enrolled aren't likely to be in the upper tax bracket, which is where the largest saving is to be made.

 

---------- Post added 07-04-2018 at 09:06 ----------

 

So saving now is a good idea...

 

Unless the saving offsets being able to buy.

That's a bit of a toss up isn't it. Save for pension, or be able to save deposit and buy a house, thus saving years of rent and owning a property before retirement.

[area 51]

As it has been stated previously, the headline 2% figure is very misleading and the money is taken from your gross pay.

 

Taking money from your pay to put into your pension is a great way to significantly reduce your tax liability. I effectively have 18% of my gross pay put into my pension so I don't get hammered by income tax.

 

Everyone is different and there is no correct way to save for your pension and at the same time become more tax efficient. If you belong to a union then see if you can get free financial advice as part of your membership. I did and it was definitely worth my time.

 

You will get taxed when you start getting your pension though,dont forget that,it shocked my father when he started drawing his private pension.

 

---------- Post added 07-04-2018 at 09:28 ----------

 

I am considering withdrawing from the scheme,i will not be making a lot before i get to retirement age and with the interest rates as they are pensions are not making a lot.I just buy lots of shares each month and invest.Makes me a lot more than a savings account and a pension does.If you are young its worth doing but not when you are knocking on the door of your mid fifties.A pensions advisor at work told me that i really needed to be investing 50 percent of my wages each month to have a good retirement,i had to laugh.:hihi:

Edited April 7, 2018 by area 51

[Cyclone]

You do get a lump sum tax free of course, and the 'norm' is that you draw a pension at a lower rate than you earned, so the tax should be less, particularly if it falls down into a lower bracket.

[El Cid]

An alternative would have been to increase NI.

 

The state of politics at the moment, if they say that they are going to increase tax/NI they believe people will not vote for them.

 

They do not have the conviction to do the right thing.

[truman]

An alternative would have been to increase NI, workers and companies and then increase state pension amounts. It would have exactly the same impact and effect,

 

Not really... when I retire I can have a lump sum from my workplace pension...can't do that with the state one...using your example I might pay extra NI for years and then pop me clogs a year after I retire and get no benefit from the extra cash I've paid in...I can draw a lump sum out on day 1 and have a blast if I felt like it....

[Naive]

You will get taxed when you start getting your pension though,dont forget that,it shocked my father when he started drawing his private pension.

 

---------- Post added 07-04-2018 at 09:28 ----------

 

I am considering withdrawing from the scheme,i will not be making a lot before i get to retirement age and with the interest rates as they are pensions are not making a lot.I just buy lots of shares each month and invest.Makes me a lot more than a savings account and a pension does.If you are young its worth doing but not when you are knocking on the door of your mid fifties.A pensions advisor at work told me that i really needed to be investing 50 percent of my wages each month to have a good retirement,i had to laugh.:hihi:

 

You could leave the money in the pension scheme for now and enjoy the tax advantage and the employer contribution. Then take the pension as a lump sum later and invest the lump sum in shares. That might be more efficient

[truman]

You will get taxed when you start getting your pension though,dont forget that,it shocked my father when he started drawing his private pension.

 

---------- Post added 07-04-2018 at 09:28 ----------

 

I am considering withdrawing from the scheme,i will not be making a lot before i get to retirement age and with the interest rates as they are pensions are not making a lot.I just buy lots of shares each month and invest.Makes me a lot more than a savings account and a pension does.If you are young its worth doing but not when you are knocking on the door of your mid fifties.A pensions advisor at work told me that i really needed to be investing 50 percent of my wages each month to have a good retirement,i had to laugh.:hihi:

 

Your pension is probably invested in stocks and shares....plus you get free money from your employer..

[Car Boot]

As it has been stated previously, the headline 2% figure is very misleading and the money is taken from your gross pay.

 

Taking money from your pay to put into your pension is a great way to significantly reduce your tax liability. I effectively have 18% of my gross pay put into my pension so I don't get hammered by income tax.

 

What the government should be doing is massively increasing the tax take from affluent middle-class liberals in the higher tax bracket to pay for the pensions of the very low paid. Auto-enrolment will scarcely benefit the poorest, while reducing their already very low incomes even further.

 

We need to squeeze the rich.

Edited April 7, 2018 by Car Boot