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https://www.ft.com/content/8da13a9d-f44f-4ac0-b06d-f21dca4694d4
Really really stupid move from Labour. This is exactly the sort of thing that will lose them the next election if they're not careful. Peeing off the people who will swing the vote.
Peeing off the people who will swing the vote.
The millionaires?
Really really stupid move from Labour. This is exactly the sort of thing that will lose them the next election if they’re not careful. Peeing off the people who will swing the vote.
The only way it'll swing the vote is if the vast majority of voters (i.e. the 99% who'll not benefit) let themselves be hoodwinked.
The same voters who'll also be paying for more tax, every year, for the considerable future - there's a limit to how many a gullible, and stay gullible.
Just think how helpful this has been to those struggling with the tax on their million pound pension pots! At least they will be able to get by now.
Really really stupid move from Labour.
How is this stupid?
This tax break only helps the already extremely well off.
Apparently it has also created a vehicle for dodging inheritance tax. IANAA.
Just think how helpful this has been to those struggling with the tax on their million pound pension pots! At least they will be able to get by now.
Or look at it a different way - the poorest in society who suffer health inequalities might stand a chance of now seeing a highly qualified, skilled professional who will be hopefully able to help them with their health issues..... makes you think ?
It isn't the policy itself but what it represents - a move back to the left. Labour had been managing to come across as quite normal (centrist) and sensible after their loony left folly with Corbyn. If they want to win the next election then thye have to keep all the dissaffected Tory voters onside (i.e. the ones who lean to the centre/right but have morals). This is exactly the sort of thing which will make them think twice. The Boris saga will be long forgotten in the minds of most by the time the vote comes round.
Or look at it a different way – the poorest in society who suffer health inequalities might stand a chance of now seeing a highly qualified, skilled professional who will be hopefully able to help them with their health issues….. makes you think ?
Or look at it a different way - the richest in society given a massive tax cut, which could of been spent on the NHS to help the poorest in our society, wrapped up in a policy that is posing to be about helping the NHS. Besides, it is possible to give certain professions different tax requirements, so why just target those in the NHS......makes you think?
Of course, if it is reversed by Labour and a bespoke solution is put in place for doctors, then I hope working for private healthcare providers is automatically disqualifying.
I pay quite a lot of tax and don’t begrudge it. I do object to someone looking at me and telling me that I’m not useful enough to society, so I should pay more.
I hope working for private healthcare providers is automatically disqualifying.
Well that's basically all of them then.
Peeing off the people who will swing the vote.
Don't think Rupert Murdoch is that worried about his pension tbh
if it is reversed by Labour and a bespoke solution is put in place for doctors,
Oh, so what makes them so special that the rest of us have to subsidise them?
@gobuchul It’s about 40% off the top of my head, with significant regional variation. In London, it’s more, elsewhere it’s less.
@intheborders The problem comes when, because of AA tax (or the fear of AA tax), people can’t access healthcare and waiting lists get ever longer. At some point it becomes a wider society problem. Judges have a special tax unregistered pension scheme and you might ask the same question of them?
I pay quite a lot of tax and don’t begrudge it. I do object to someone looking at me and telling me that I’m not useful enough to society, so I should pay more.
100%. This is why I'm not looking forward to Labour - they're full of idiot ideas. (Don't get me wrong, I want the Tories gone).
The lifetime limit used to be double what it is. They could easily have just reinstated that and have it grow in line with inflation. After that everybody should get told "tough sh1t" - not "well, you're not as a good as a doctor, so you can sod off".
Oh, so what makes them so special that the rest of us have to subsidise them?
i might be being really daft here, but why are we subsidising doctors?
Well that’s basically all of them then.
Really thats not my experience knowing a lot of consultant's. in fact many have stopped doing it as in recent years it hasn't been profitable unless you are prepared to work full days 7 days per week.
Judges have a special tax unregistered pension scheme and you might ask the same question of them?
Labour objected to this at the time.
Or look at it a different way – the poorest in society who suffer health inequalities might stand a chance of now seeing a highly qualified, skilled professional who will be hopefully able to help them with their health issues….. makes you think ?
Hmmm. That's a pretty tortured justification TBH.
I'd really love you to go and speak to the "poorest in society" and ask them if they agree that we grant people on 8 or 10 times their income an additional tax break to persuade them to come back to work for a few more days/ years pretty please.
I’d really love you to go and speak to the “poorest in society” and ask them if they agree that we grant people on 8 or 10 times their income an additional tax break to persuade them to come back to work for a few more days/ years pretty please.
people often don't understand market complexities, which is why we elect a government to help guide what may be the best path for people.
They might say no, I'll take the cash, but then when they're stuck on a hospital waiting list they will also moan.
Hmmm. That’s a pretty tortured justification TBH.
Yep. Its a form of trickle down economics. Let me have more cake and you might get a few more crumbs!
i might be being really daft here, but why are we subsidising doctors?
I was replying to a post where someone said that we ought to have a specific doctors scheme - try reading it again.
As it is both I and my OH will benefit from the budget changes - thanks for subsidising us.
Of course they're not really subsidising you @intheborders - they're just allowing you to save some money whilst still being a higher rate taxpayer who, if it applies to you, pays not only a much higher absolute amount in tax, but a higher proportion of your earnings.
Been a Doctor for 24 years. Consultant for 12. Have no private practice and never will. Paid to work for 52 hours a week (40 pensionable) and work an average of 60 (better than the 90-100 hours 20 years back (£4.90 an hour)). Have no control over what goes into my pension. Yes I'll have a good pension at the end (presuming I don't die young from being up all night every 8th day on call).
At 44 I got a chunky 4 figure pension tax bill as the pension input amount had exceeded the allowance. No control over it.
Predicted, until Jeremy made his changes, that this would happen every year or so until I was in my 50's then it would get rapidly silly moving into substantial 5 figure sum every year. I was planning my exit!
Would I have done what Jeremy has done. No.
Has it made my financial situation better. Yes.
What should he have done. Not sure. Perhaps more nuanced approach allowing people to control what goes in meaning the rest just goes through the normal tax system. However that would have been difficult and a cynical person might think the rather more broad based approach has allowed them to wrap up a bung to the rich as an NHS saving step!
Yes there are a good few NHS consultants who do private. In my specialty they are not common (outside the SE). I know very few who do. Many of us are driven by motivations other than money alone (There are easier ways to make it) but at the same time we want to live comfortably (who doesn't)
Hi rheaern - your “bung to the rich” comment….
As a senior consultant likely on £124k ish, your equivalent annual accrued pension benefit is worth around £67k a year - well over the £60k annual limit for people with self invested pensions or workers with a combined personal and employer contribution of £60k.
Workings:
NHS Care pension scheme is a defined benefit scheme in which you pay a bit (14.5%) and in return get 1/54 of salary as a future index linked retirement income - so 1.85% … so £124k gives £2,294 a year - index linked.
Index linked annuities are around 3% for the likes of me to buy - so £2294 / 3 X 100 gives the equivalent annual value in a defined contribution scheme.
You may not realise it but your defined benefit pension scheme gives you way more wealth at the end than someone investing £60k a year or their own money into a SIPP could ever achieve - not least because your accrued benefits completely smash the LTA threshold.
It rather seems to me that you’re actually receiving a bung on the quiet but don’t realise it.
Ps: your “money - there are easier ways to make it”. Any pointers?
Anyone who actually understood what a medical consultants job is would not make that statement hite rite. The hours and stresses are life shortening to the person working and the level of stress is both qualitatively and quantitatively different to anything outside healthcare
also again you over estimate saleries
Medical consultants are well paid. rightly so ( although they have done a lot better than other healthcare staff)
Pay scales for consultants
Didn't say it wasn't a good pension but the tax situation is clearly crazy where you have no control over what goes in and rack up massive tax bills without an option not to. As I said I wouldn't have made the choice hunt did. I'd have been happy to have been able to control my pension input and predict my taxes rather than waiting for the Brown envelope with the crazy sums in it. Re easier ways to make money I've been doing this since I was 22! I have limited experience of the world outside the NHS. However my brothers in law who are plumbers, builders and architects all make way more than me.
I've both Defined Benefit (DB) and Defined Contribution (DC) pensions as while I'm outside of the public sector I am old enough to have benefited from the 'old-fashioned' DB pensions.
So, I can look at the way both work and from my very simplistic view the DB pensions seem to pay out about twice the annual pension for the same notional value of an equivalent DC pension. My DB pensions also have spouse benefits (paying out between 1/2 * 2/3 depending on the scheme if I die first) - not sure how these factor in to either the LTA or 'value' of them. if at all.
I'm not an expert, just someone with a load of pensions as I've had many employers and never combined them - late 90's I took over a team that had worked within one of Robert Maxwell's companies, that my employer had bought... Kinda focusses you mind to what can happen, so I've taken a less risky route that possibly has reduced their overall value.
Happy for an SME to point out I'm talking crap, but that's what my numbers look like to me - caveat, I've not yet retired so I only have the 'forecasted' numbers.
My DB pensions also have spouse benefits (paying out between 1/2 * 2/3 depending on the scheme if I die first) – not sure how these factor in to either the LTA or ‘value’ of them. if at all.
this is an odd one. I obviously have recent experience of this. Mrs TJ had applied for one ( DB) of her 5 different bits of pensions. ( she died a month after retiring and not everything got sorted) I get a small sum from that about 1/3 of her lump sum. another DB pension she had not applied for - I got her lump sum and that is all. all the DB pensions die with her. No ongoing payments. Another DB scheme - I got a small sum around half what her lump sum would have been
However the private standard life DC pension - she had not applied for it. I get the entire pot. Quite a nice sum
So again the advantages are not all one way. the DB pensions she had I got much less from and much less than she paid in. the DC pension she had I got the entire pot - a much bigger sum
So the DB pensions all died with her. there is no actual pot of money and thus nothing to leave. Its not the same as pensions savings which still exist after you die
When I die my NHS pension dies with me. Nothing I can leave to anyone
this fact of the pensions dying with the pension holder must make them less valuable that a pension pot of real money that can be left.
When looking at how much of the LTA is being used up by any one pension, the calculation is to assume 20x the DB payment ie £10k pa is equivalent to £200k. That is not what that DB scheme might be worth if it was actually converted into a DC scheme - that depends on the scheme rules, age of the person getting the transfer and, crucially, long term interest rates. Mrs BH, early middle aged woman, got 47x her pension a few years back but she wouldn’t get that now in view of the much higher interest rates. So, in a way Dc scheme can look more valuable in pot size but a DB scheme is sort of more valuable within the context of LTA.
What Hunt should have done: scrap the Annual Allowance, as it just penalises people who have irregular income (or on DB schemes, a big rise). Keep the Lifetime Limit, but instead of the 55% rate if you go over it, just remove the 25% tax free element. Most people in that range will be paying 40% on pension payments, so getting 40% relief on contributions is not unreasonable.
But the DB scheme dies with the pension holder. A DC scheme does not? With a DB scheme there is no "pot " of real money so nothing to leave to others. the DC scheme there is and that can be left to others
I got twice as much from the private DC scheme Mrs TJ paid into for ten years than I did from the 4 state run DB schemes she paid into for 25 years
But the DB scheme dies with the pension holder. A DC scheme does not? With a DB scheme there is no “pot ” of real money so nothing to leave to others. the DC scheme there is and that can be left to others
Mine don't, and neither did my Dad's as my Mum gets a spouse pension of 2/3 and not my either FIL as my MIL got 1/2 his.
Maybe it's different for public sector schemes - but this says otherwise:
"If you want your spouse or registered civil partner to receive all of your adult dependant’s pension and lump sum benefits when you die, you don’t need to nominate them. They will receive these benefits unless you have previously nominated someone else to receive them."
Thats only if you actually have someone dependent on you ( ????) and in the case of Julies DB public sector schemes they all die with her. I get a small lump sum as a one off payment
The spouses benefit in these schemes is just that - a small lump. No ongoing payments
Edit - I think instead of the lump you can get a small ongoing payment? Its all a bit fuzzy in my head and my lawyer has all rte details. All I know is that I will receive no on going payments and that in the case of my pension it dies with me completely
Maybe it’s different for public sector schemes – but this says otherwise:
The link describes how they determine who gets any dependant's pension, not that there will always be one. It says you need to look at the particular scheme to see if it's eligible - some are, some aren't, some cover partners, others may just cover dependent children.
Anyone who actually understood what a medical consultants job is would not make that statement hite rite. The hours and stresses are life shortening to the person working and the level of stress is both qualitatively and quantitatively different to anything outside healthcare
That's besides the point. If the renumeration doesn't reflect the realities of the job, then you fix that by paying more, not by making a specific pension change unique to one profession. Any shift worker will die earlier, but you aren't campaigning for them to have role-specific law changes. So why is the person working in the supermarket overnight not worthy of a special pension benefit?
Flaperon
Sorry perhaps i wasnt clear. I meant nothing about pensions or wages. The comment was in response to hite rite who seemed to be downplaying the difficulties of the job and also someone else who was saying how lucky the consultants were to be able to retire early when burnt out. Its not lucky to have your psyche so damaged you cannot continue.
As an aside i think that we will see in the future few healthcare staff make it to a full retirement age of 68. I certainly could not have done 8 more years. Physically and mentally impossible. Most will retire early on grounds of health
When I die my NHS pension dies with me. Nothing I can leave to anyone
Even if you remarry, nothing for spouse? I'm surprised.
Traditionally a DC pension would be converted to annuity on retirement and there would be nothing to leave in that case either - though the annuity may also pay something to a surviving spouse. Increasingly these days the annuity is delayed and in that case there is certainly a tidy sum to leave - a very neat IHT loophole for those rich enough to make use of it.
If the renumeration doesn’t reflect the realities of the job, then you fix that by paying more,
Funnily enough i think some doctors have been asking for that just recently but the government who fix their salaries dont seem very willing to have the conversation?!
Its not lucky to have your psyche so damaged you cannot continue.
It's also not unusual across a wide range of professions. The NHS isn't special in this regard.
So Labour can eff off - we should be all in it together. It's an epic own-goal from their point of view - it's pandering to the outraged poor, but there's a shedload of people who need to vote to them going "hey! I've worked my ass off my whole life, I'm nowhere near half of the 1m lifetime allowance, but doctors are worth more than me? Eff you!"
Ultimately Tories know money talks in elections. Shamefully not the environment and stuff like that. People vote on their bottom line and fairness. And Labour have just announced that a group of people are more valued, or "better" than other people.
That's an epic own goal. And it's a streak that runs through labour. It's why I said I'm desparate to get rid of the Tories but dreading Labour getting in - because Labour is full of this sort of crap.
It’s also not unusual across a wide range of professions. The NHS isn’t special in this regard.
I wouldnt disagree, and there are probably soldiers etc who get paid substantially less who have to deal with equally traumatic situations.
However for context - Mrs FD holds clinics twice a week where she is either telling 3-4 people that unfortunately they are going to die within a short space of time, or she has made the decision to amputate a limb to extend their life. Difficult decisions when its a single Mum with no support structure at home and 2 kids, and she has to try and sort support at home. Its now complicated by the fact that she now sees people that she knows that if she had seen them quicker they would either not have lost their life, or wouldnt have needed that limb amputating. I had to pop in to her work to get the car keys one day. She was prepping to tell an 18yr old lad he was going to die, but she was trying to put everything in place to make his 'journey' as comfortable as possible. I passed him in the waiting room on the way out, thats when it hits home for me.
After having told 4 people they are going to die or have significant life changing surgery and basically counselling them, she will then have to go straight in to a management meeting where they ask why she isnt seeing more patients. Her theatre output is reducing too, because operations are taking longer as the patients are more complicated. She is then trying to pioneer new techniques and kit to improve outcomes, butt the risks of this pioneering work are high.
She comes home broken and in tears sometimes. It is her job but it effects the whole family in so many ways, and has done since she started training as a doctor.
Sorry perhaps i wasnt clear. I meant nothing about pensions or wages. The comment was in response to hite rite who seemed to be downplaying the difficulties of the job and also someone else who was saying how lucky the consultants were to be able to retire early when burnt out. Its not lucky to have your psyche so damaged you cannot continue.
Ah, I see what you mean and agree. 🙂
I totally understand that @Funkydunc - really appreciate what's going on there.
However, it doesn't trump the right for people to be treated equally. There's remuneration advantages being in different professions and we know it's massively unequal. Now to start changing the tax treatment of people to advantage certain groups over others is not a forward-looking and fair step, it's a retrograde outrage. And I'm choosing outrage very specifically. This is creating yet another inequality.
Judges have a special tax unregistered pension scheme and you might ask the same question of them?
It was probably a silly mistake to make an exclusion for one particular type of employee. I'd say its wrong to make special rules for doctors too. Its rather divisive to say, "we really want these type of people to do a valuable role". The reality is the government want to encourage us all to work as long as possible, pay as much into our pensions as possible, and have a simple scheme to administer. So actually I'm not as horrified by the change as many (and I'm not even close to worrying about a £1M limit).
Yes I’ll have a good pension at the end (presuming I don’t die young from being up all night every 8th day on call).
At 44 I got a chunky 4 figure pension tax bill as the pension input amount had exceeded the allowance. No control over it.
Predicted, until Jeremy made his changes, that this would happen every year or so until I was in my 50’s then it would get rapidly silly moving into substantial 5 figure sum every year. I was planning my exit!
Is there something special that makes doctors more likely to hit this problem than other NHS staff? e.g. a consultant pharmacist would be earning significant chunks but I've never heard them complaining of this. Are their pensions just "shitter"? The judges situation I think was because the sort of barrister who makes it to Judge usually has a career option to become a partner in the law firm and so potentially had whole different routes for making lifetime earnings but we don't want Judges to have conflicts of interest so face an issue with getting the best talent (as I understand it).
TJ - I'm not for one second suggesting you've got the situation with Julie's DB schemes wrong, but my wife has a DB scheme from a few years at a private employer early in her career. It DOES pay 1/2 to me if she goes first [that was an employer where it was very much male employees and the scheme was established in an era when women would not have been expected to work]. I very briefly had a stint in public sector and if I remember correctly that pension would not have automatically paid to my wife, but there was a personal contribution you could make that enabled it to do so (I was young, naive, and left 1 week to early to qualify for pension because pensions were not even on my radar). Now my DC pot, if I convert to an annuity I have to make a decision then if I want bigger monthly just for me, or smaller payment that partially transfers to wife on my death. If I do the former and die the following week she gets nothing. If we both die then our (by then adult) children get nothing. I don't think the difference between DB and DC is that radical in that sense.
Is there something special that makes doctors more likely to hit this problem than other NHS staff? e.g. a consultant pharmacist would be earning significant chunks but I’ve never heard them complaining of this
Is it not just the specific issue that the NHS needs more hours worked by consultant level clinicians and the previous arrangements meant that those staff were effectively financially penalised for working overtime / continuing to work to a greater age, even if they were happy to work more hours
BTW - you shouldn't be able to punt your pension pot onto your kids. They need to bloody work for their own living.
You should be able to move your house on, split between them, and nothing else. Rest should go to the democratically elected government of the day to spend on social goods that we all vote on. That goes for billionaires too, and that would be transformative.
People baulk at that. It's seemingly "natural" to want to give your kids a free ride in life. So there should be a cap - the super rich should be able to pass on the cost of an average house in the country they reside in, plus £100k. If your kids can't make a go of their life with that massive advantage in their pockets then they're useless layabouts - and clearing the ground in this way levels the playing field for people who are capable of making something of their own lives.
That's what a capitalist economy should look like - a not-completely-equal playing field, but real opportunity for all and comparatively miniscule levels of inherited wealth for the mega-rich.
Perhaps more nuanced approach allowing people to control what goes in meaning the rest just goes through the normal tax system
This system is available in the private sector to limit such tax liabilities. You take any sum over the liability as salary and pay tax accordingly. Or it is deducted from the pension pot. Or you can pay the bill yourself. But in the public sector, and I'll say it again, There. Is. No. Money. It's a Ponzi scheme paid out of public taxation. Hence taking, say 27k of your £67k annual pension "contribution" and paying it to you in salary to keep you under the Annual Allowance would add to the NHS salary bill (real money from taxation) of an additional £27k. My BIL faces the same annual tax bill for his pension "contributions" in the MOD.
chevychase
Full Member
BTW – you shouldn’t be able to punt your pension pot onto your kids.
Why ever not? It's just a savings account, like any other asset. Admittedly with some nice tax benefits for saving (that are maintained only if one dies early), but it's a real asset like a house. Can you pass on a car? A watch? A bike? What is the difference? If you only pass on houses, guess what people will buy with their pension pots? Think what that will do to the housing market!
@tired - read what I actually wrote.
Average house price for the country you live in. Whether you're a billionaire or a pauper. That would seriously level it for all - whilst fixing the NHS, social services, mental health, our distorted democracy, inequalities of opportunity and education etc. etc.
Mwaaaah! I want to pass it all onto my kids!!!! Tough titties. They need to work for a living like everyone else. They'll be good -they have a house and 100k. But that's it. They need to get a job. If you're earning loads - spend it, or it goes to the government. That's the best thing for the economy anyway.