You need to remember the "permanent government" of the civil service. They come up with a fair few ideas the politicians have. Bear in mind that pension changes are always more likely to affect DC pensions, as all the civil servants have unfunded DB pensions.
Given Noonan's raid on pension funds, can the government be trusted?
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Dr Strangelove
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Trust me civil servants who make the policy LOVE the USC.
Levied on a broad base with few exemptions. It’s as nicely designed a tax as you’ll find outside a textbook.
Steven Barrett
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So what is your solution?
Keep your money in a jar under the bed? Or hold it all in gold bars? If no government can be trusted, you have to keep all of your money yourself...but you won't be able to earn a return from it either...unless you become a money lender...
The Irish government cannot be trusted not to make future raids on private pension funds. I don't believe any posters in this thread are suggesting that people should avoid contributing to a pension. Pension contributers do need to be aware that money is likely to be taken from their locked in investments and that they will probably be unable to remove their investments from government access.
The solution is to make it known to future election candidates that they will not receive your vote unless they introduce legislation to prevent future pension raids.
Any government can impose a levy on anything. It was as much a raid as any tax.
Gordon Gekko
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How on earth is it ‘likely’ when it was taken once during the biggest financial crisis in history?
"Pension tax relief" is in fact spreading the recognition of income for income tax purposes across your lifetime - not relief.
Yes - all else being equal you may benefit by such spreading on the basis you have lower income later in your life.
Regarding "all else being equal" - it's for each individual to form a view by looking around them at current trends in the western world (demographics, geopolitical trends, aggregate levels of debt, economic value creation, incentives to work hard vs. not work hard, the extent to which 'leaders' feel empowered to take extraordinary measures encroaching on individual rights, etc.)
Perhaps some may feel the tax regime will stay largely as it is or improve, and the "unprecedented" "biggest financial crisis in history" that began in 2008 is a one-in-200 year event. Others may not.
USC and PRSI are not deferred on employee contributions. You may end up paying these on the double.
Yes - all else being equal you may benefit by such spreading on the basis you have lower income later in your life.
Regarding "all else being equal" - it's for each individual to form a view by looking around them at current trends in the western world (demographics, geopolitical trends, aggregate levels of debt, economic value creation, incentives to work hard vs. not work hard, the extent to which 'leaders' feel empowered to take extraordinary measures encroaching on individual rights, etc.)
Perhaps some may feel the tax regime will stay largely as it is or improve, and the "unprecedented" "biggest financial crisis in history" that began in 2008 is a one-in-200 year event. Others may not.
USC and PRSI are not deferred on employee contributions. You may end up paying these on the double.
Aren't you overlooking the tax free growth within the fund and the tax free lump sum at maturity?
Dr Strangelove
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Why would if make sense to tax the growth once within the fund and again in drawdown?
This is indeed an opportunity to avoid some tax entirely.
Gordon Gekko
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This thread is like the twilight zone.
Not really. The point is a discussion surely. And giving different views. What works for some may not work for all.
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The problem is that some of the views in this thread are largely divorced from reality.
Yes, the perfect ambiance for the finance minister to swoop in again for another bite out of private pension funds. Maybe JAWS would be more apt, the department shark is swirling deep under water only to pounce and bite off another chunk of the boat , his black and dead eyes roll around to the back of his head as he bites in.
Gordon Gekko
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It’s closer to debating whether the Earth is flat.
UK savers continue to raid pensions as inflation takes its toll
£4bn withdrawn between April and June this year
www.ft.com
“Pension savings take years of dedication and hard work to build and it’s a huge concern that so many are having to dip into these savings, at potentially unsustainable rates.”
(it's pretty hard to dip into the capital of a solid asset like a house, even more so if the house value has tanked)
Governments don't do raids, they just tell you to save, give you benefits and then whoose they ........
Triple lock state pension boost to be clawed back in stealth tax raid
Taxman to reclaim one pound in every seven thanks to government freeze on thresholds
www.telegraph.co.uk
Retirees will be forced to forfeit a chunk of their state pension boost next year because of the Government’s stealth tax raid.
One pound in every seven paid out in next year’s bumper pay rise will be clawed back in tax, analysis for The Telegraph shows.
Now Ireland, being independent, well they would never copy England:
/cloudfront-us-east-2.images.arcpublishing.com/reuters/Q7O662RZOVIHTEDPQFO5RRFIOM.jpg)
www.reuters.com
Here's some helpful suggestions for the Finance Minister
www.ii.co.uk
UK to reveal stealth tax raid on pensions later this month-The Telegraph
British Prime Minister Rishi Sunak and finance minister Jeremy Hunt plan to reveal a stealth tax raid on pensions later this month, The Telegraph reported on Friday.
www.reuters.com
Here's some helpful suggestions for the Finance Minister
Warning: possible inheritance tax and pensions raid in 2023
Alice Guy examines three ways the government might target pension savers and raise more inheritance tax in 2023.
www.ii.co.uk
All these stealth tax raids relate to adjusting the rules and tax allowances applied to UK pensions.Now Ireland, being independent, well they would never copy England:
UK to reveal stealth tax raid on pensions later this month-The Telegraph
British Prime Minister Rishi Sunak and finance minister Jeremy Hunt plan to reveal a stealth tax raid on pensions later this month, The Telegraph reported on Friday.
Here's some helpful suggestions for the Finance Minister
Warning: possible inheritance tax and pensions raid in 2023
Alice Guy examines three ways the government might target pension savers and raise more inheritance tax in 2023.
Would they consider the direct theft of units from their citizens pension investments?
I would say, definitely not.
Ireland is a particularly untrustworthy country.
Dr Strangelove
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100%.
People seem to have forgotten that Irish tax receipts fell by 30% between 2007 and 2010.
There really was no alternative to broad-based increases in tax and reductions in expenditure.
An economics textbook will tell you that lump sum taxes like the levy on pension assets are the least economically harmful because they don’t impact decisions to work or consume.
You can quibble with the policy mix of course add decades later, but to ignore the economic context of the time is crazy.
As of 2023 the economic climate couldn’t be more different and the department of finance is desperately squirrelling money down the back of the sofa to stop it all being spent on the health service and the risk of new taxes, like the USC or the levy on pension assets is remote.
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