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[Finance] Should Pensioners Pay Tax?



NooBHA

Well-known member
Jan 13, 2015
8,586
Definitely. Also, worth noting final salary pensions are only multiplied at 20x to determine lifetime allowance thresholds/charges, so those CEOs and others are gaining there too……..
Some of those Pensions paid into were paid into before the Lifetime Allowance came in though . Although there will be fewer of them around these days as more and more die off
 




dazzer6666

Well-known member
NSC Patron
Mar 27, 2013
52,985
Burgess Hill
Some of those Pensions paid into were paid into before the Lifetime Allowance came in though . Although there will be fewer of them around these days as more and more die off
I know but it doesn’t change the point…….LTA has also been almost halved
 


East Staffs Gull

Well-known member
Jan 16, 2004
1,421
Birmingham and Austria
Definitely. Also, worth noting final salary pensions are only multiplied at 20x to determine lifetime allowance thresholds/charges, so those CEOs and others are gaining there too……..
The Lifetime Allowance and the basis for valuing pensions to test against the LTA were introduced simultaneously. The whole point of introducing the LTA was to reclaim tax from those with excessive highly pensions. Highly paid CEOs were the greatest impacted population. Prior to the introduction of the LTA there was an earnings cap for pension purposes. Indeed, UK Government pensions policy over the last thirty years has consistently been to impose additional taxes on the pensions of higher earners.
You had to be in a pension scheme before about 1990 to escape the earnings cap.
 


NooBHA

Well-known member
Jan 13, 2015
8,586
I know but it doesn’t change the point…….LTA has also been almost halved
I'm not really expert in Pensions but I know there's a slightly different calculation when there is an existing pension in place.

Years ago footballers had a Retirement Age of 35 so a lot of the older ones have been getting an annuity since the age of 35.

I remember I had to do a calculation for one of my football clients to account for that Pensions and it ended up increasing the Lifetime Allowance quite a bit but it's a good few years since I did the calculations so I can't remember how it worked
 






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