Budget 2014

[JackanorySFC]

Good news on jobs this morning. Personally resigned to level of higher rate tax not being raised from the current level so hoping that businesses get a higher entry level to NI payments and point at Tax entry band is raised from £10,000 to £10,500. Fags and booze will get hit, as always. Right to buy will be extended (a rubbish policy that has inflated house prices above their true value. Ask any mortgage broker, if you want a new house you'll need a higher deposit, almost like buying a car - depreciates as son as it leaves the forecourt!

 

Austerity will continue and the economy will hopefully keep improving. I can see decent improvements at my work anyway. Response from Labour interesting. Balls came across as right idiot last time, completely unprepared for Osborne, stuttering and shambollic really. Must improve this time, Labour are of course on dodgy ground when it comes to the economy and they need all the gravitas they can get!

 

I'm someone that has voted for Labour and the Tories btw. Hate all this partisan b*******t. Still have an open mind for 2015 and future elections as always. Keep 'em on their toes I say.

[benjii]

Utterly risible response from Milliband so far.

[trousers]

Milliband in non-response response shocker

[hypochondriac]

Wish they would stop going on about free childcare places. They aren't free, they are just subsidised by the ones who don't get free places.

[bridge too far]

The 'free' childcare 'help' won't make any difference to a lot of families as it amounts to no more than current salary sacrifice / employer voucher scheme.

 

However, from what I can see, it does mean families where both parents earn £149,000 pa will be able to receive some relief for the payment for their Norland nannies.

[Lord Duckhunter]

These things are complicated but at first glance the Pension announcement looks bad to me. Being a free market believer I instinctively believe that people should do what the hell they want with their own money, but not forcing people to buy an annuity could lead to real problems. Annuities are there to stop people ****ing their pensions up too quickly and have a consistent income coming in. The other issue that concerns me is when one Government starts dicking around with this, Balls or the next Labour chancellor wont be able to resist raiding our pension pots with some clever move in future. Brown killed off the Final Salary schemes, and I'm worried this move will have a harmful effect on money purchase ones.

[bridge too far]

Lord D, I don't pretend to understand annuities as I have an NHS pension and that meant I didn't have to consider such things. But I'm right in thinking that previously people had the option to take a percentage as a cash sum and the rest was invested to produce an annuity, aren't I?

 

I can now see, like you, that many new pensioners will take the option to take all of it in cash and maybe pay off a mortgage / go on a cruise / buy a new car or boat. Eventually they'll get to the point when the cash has gone and they then have to rely on pension credits to boost their **** poor state pension.

 

Sounds costly to me.

[Clapham Saint]

The 'free' childcare 'help' won't make any difference to a lot of families as it amounts to no more than current salary sacrifice / employer voucher scheme.

 

However, from what I can see, it does mean families where both parents earn £149,000 pa will be able to receive some relief for the payment for their Norland nannies.

 

As I understand it the most important change is that rather than being £x per working parent, the scheme now funds £2,000 per child. For one child households then the change won't make much difference but if you have 2 or 3 then it becomes quite significant.

 

 

I haven't yet had the opportunity to properly read up on this yet though so happy to be corrected if I have got the wrong end of the stick.

[Unbelievable Jeff]

These things are complicated but at first glance the Pension announcement looks bad to me. Being a free market believer I instinctively believe that people should do what the hell they want with their own money, but not forcing people to buy an annuity could lead to real problems. Annuities are there to stop people ****ing their pensions up too quickly and have a consistent income coming in. The other issue that concerns me is when one Government starts dicking around with this, Balls or the next Labour chancellor wont be able to resist raiding our pension pots with some clever move in future. Brown killed off the Final Salary schemes, and I'm worried this move will have a harmful effect on money purchase ones.

 

I disagree, if people are resonsible enough to save then they are responsible enough to use the money they wish. I know I would much prefer to look after my own money than having to buy an annuity. More people are likely to save as well.

[Clapham Saint]

Lord D, I don't pretend to understand annuities as I have an NHS pension and that meant I didn't have to consider such things. But I'm right in thinking that previously people had the option to take a percentage as a cash sum and the rest was invested to produce an annuity, aren't I?

 

Yep.

 

I can now see, like you, that many new pensioners will take the option to take all of it in cash and maybe pay off a mortgage / go on a cruise / buy a new car or boat. Eventually they'll get to the point when the cash has gone and they then have to rely on pension credits to boost their **** poor state pension.

 

Sounds costly to me.

 

Under the current rules it is common (or at least it was back in my training days when I audited a lot of pension schemes), to take the maximum cash allowance and only take the minimum annuity. I suspect that you and Lord D are right and that many people will just take the cash.

 

I'd have the same concern regarding them running out of money, however as a matter of principle I believe that people should be able to choose how to spend their own money. If they p1ss it up the wall and then find that they subsequently struggle then they will have to live with it.

 

I will object to paying more tax to bail them out though.

 

(For the avoidance of doubt and BTF's morals this is different to people who are struggling because they never had the opportunity to have a reasonable pension in the first place - it is quite right that I am taxed more to help these people and I'm happy to be).

[bridge too far]

As I understand it the most important change is that rather than being £x per working parent, the scheme now funds £2,000 per child. For one child households then the change won't make much difference but if you have 2 or 3 then it becomes quite significant.

 

 

I haven't yet had the opportunity to properly read up on this yet though so happy to be corrected if I have got the wrong end of the stick.

 

The Guardian has done a good piece on it. It seems parents with one child will be worse off. At first glance I thought my daughters would both benefit (they both have salary sacrifice schemes ATM as do their partners) as they both have two children. However, their older children are at primary school and I struggle to see how those children will require childcare (i.e. out of school hours) to the values mentioned to derive any benefit.

 

http://www.theguardian.com/money/2014/mar/18/new-childcare-vouchers-how-work

 

 

[Essruu]

At first glance I thought my daughters would both benefit (they both have salary sacrifice schemes ATM as do their partners) as they both have two children. However, their older children are at primary school and I struggle to see how those children will require childcare (i.e. out of school hours) to the values mentioned to derive any benefit.

 

You only ever seem to care how things affect you, your daughters and your grandchildren - like a true Tory.

[ecuk268]

I disagree, if people are resonsible enough to save then they are responsible enough to use the money they wish. I know I would much prefer to look after my own money than having to buy an annuity. More people are likely to save as well.

 

The current problem with annuities is that, due mainly to quantitative easing, the annuity rates have plummeted and are nearly half what they were 20 years ago.

 

As someone who's going to have to make a decision regarding my pension pot in a year or so, I think a good independent financial adviser will be needed.

[bridge too far]

You only ever seem to care how things affect you, your daughters and your grandchildren - like a true Tory.

 

:D I'd cut my throat first before becoming a Tory.

 

I was trying to explain how the childcare 'help' would affect families. I can only relate to the example of how it will affect my children because I don't know how it would affect other people.

 

I was actually more interested in the idea that this 'help' is nowhere near as generous as Gideon would have us believe - hence the link I posted.

 

And BTW childcare help doesn't affect me at all FFS! I'm a provider (unpaid) not a beneficiary.

[CB Saint]

The current problem with annuities is that, due mainly to quantitative easing, the annuity rates have plummeted and are nearly half what they were 20 years ago.

 

As someone who's going to have to make a decision regarding my pension pot in a year or so, I think a good independent financial adviser will be needed.

 

Annuity rates have been terrible for a lot longer than that. More to do with you lot (oldies) not doing the decent thing and turning up your toes 5 years after stopping work.

 

That said I am absolutely determined to take out for more years than I put in.

[Saintandy666]

Good to see that the Liberal Democrats have now more than delivered on one of their 4 core manifesto pledges at the election. £800 tax cut for millions of people is actually very impressive given original conservative opposition.

[Barry Sanchez]

Pleased but I will get screwed another way from the bastards.

Edited 19 March, 2014 by Barry Sanchez

[pap]

Good to see that the Liberal Democrats have now more than delivered on one of their 4 core manifesto pledges at the election. £800 tax cut for millions of people is actually very impressive given original conservative opposition.

 

It's over, Saintandy666. Let them go

[Lord Duckhunter]

Yep.

 

 

 

Under the current rules it is common (or at least it was back in my training days when I audited a lot of pension schemes), to take the maximum cash allowance and only take the minimum annuity. I suspect that you and Lord D are right and that many people will just take the cash.

 

I'd have the same concern regarding them running out of money, however as a matter of principle I believe that people should be able to choose how to spend their own money. If they p1ss it up the wall and then find that they subsequently struggle then they will have to live with it.

 

I will object to paying more tax to bail them out though.

 

(For the avoidance of doubt and BTF's morals this is different to people who are struggling because they never had the opportunity to have a reasonable pension in the first place - it is quite right that I am taxed more to help these people and I'm happy to be).

 

In must circumstances I'd agree, it's people's money and it's not for governments to tell them how they must spend it. However, it is the unintended consequences that concern me.

 

I may be way off the mark and have no pension knowledge really, but some things stick out as a warning for me.

 

If pensions are to become basically a savings plan that you can access at 65, over time will the work place pension die out. At the moment employers pay a contribution towards a "salary" when you retire in the form of an annuity. Will the moral case to do so still be in place if they're funding cruises, people paying off their mortgage, season tickets at SMS ect ect?

 

What happens to the annuity industry, I always assumed that annuity rates were based on some people popping their clogs early and their pots contributing to the rates. If most people take their pots, wont that drive down the annuity rates still further as that money will be denied to the Companies as it's already been spent. The fact insurance companies share prices have gone down considerably today tells us that it's bad for the Insurance industry and at the end of the day, for all its faults we need a strong insurance sector.

 

My main worry however is Government meddling. Once you brake the model of what a money purchase pension is and turn it into a savings account it is left to the whims and political decisions of future chancellors.

 

It maybe I'm wrong and that this becomes a defining moment that improves peoples retirements, but I cant help thinking that it's the money that will be freed up and spent in the economy that GO has his eye on, rather than the long term future of the nations workers.

[Saintandy666]

It's over, Saintandy666. Let them go

 

Damnit, was my plug that obvious?!

 

Out of interest does anyone have proposed speed of deficit reduction by the Labour party figures? Pretty sure they published some when Darling was still around... would be interesting to see how close those figures were to the unfolding ones under coalition.

[Lord Duckhunter]

Good to see that the Liberal Democrats have now more than delivered on one of their 4 core manifesto pledges at the election. £800 tax cut for millions of people is actually very impressive given original conservative opposition.

 

The opposition was based on the fact that it was "unaffordable", surely they'll claim at the next election that because they managed the finances well they found they could afford it.

 

Anyway, raising it again this time is a political move from the Lib/Dumbs, not some sort of moral crusade to help the poorest workers. If you wanted to help the poorest then the best way to do that this time was to raise the rate they pay NI, not take more out of PAYE.

 

Talking of their pledges, how did the tuition fee one go?

[Saintandy666]

The opposition was based on the fact that it was "unaffordable", surely they'll claim at the next election that because they managed the finances well they found they could afford it.

 

Anyway, raising it again this time is a political move from the Lib/Dumbs, not some sort of moral crusade to help the poorest workers. If you wanted to help the poorest then the best way to do that this time was to raise the rate they pay NI, not take more out of PAYE.

 

Talking of their pledges, how did the tuition fee one go?

 

The tuition fees was *not* one of the core pledges in our manifesto at 2010. The signed placards campaign however was the sign of an immature party that has grown up a lot of the past few years. I disagreed with it at the time and indeed I marched against it and left the party for a year over it.

 

However, whilst I do still disagree with a rise in principle and an increase that still allows the rich to pay up front, it is in effect (bar that point) a graduate tax. And it is a graduate tax that is more progressive than the previous arrangement given that you now pay 9% over 21k as opposed to 9% over 15k which is a better system than the tories and labour wanted. Yes, the nature of the pledge was wrong especially when aimed at one of the more naive parts of the electorate (although I think the last few years has exposed how naive a lot of the country were to the realities of compromise and coalition), a system was delivered that in retrospect isn't as bad as it could have been and if you ignore the distracting headline figure of 9k it is in many ways fairer than the previous.

 

Indeed, on that last point it seems that the people of Britain have voted with their feet in regards to tuition fees with record numbers of applications and most importantly record numbers of applications from children from poorer backgrounds.

[Clapham Saint]

In must circumstances I'd agree, it's people's money and it's not for governments to tell them how they must spend it. However, it is the unintended consequences that concern me.

 

I may be way off the mark and have no pension knowledge really, but some things stick out as a warning for me.

 

If pensions are to become basically a savings plan that you can access at 65, over time will the work place pension die out. At the moment employers pay a contribution towards a "salary" when you retire in the form of an annuity. Will the moral case to do so still be in place if they're funding cruises, people paying off their mortgage, season tickets at SMS ect ect?

 

What happens to the annuity industry, I always assumed that annuity rates were based on some people popping their clogs early and their pots contributing to the rates. If most people take their pots, wont that drive down the annuity rates still further as that money will be denied to the Companies as it's already been spent. The fact insurance companies share prices have gone down considerably today tells us that it's bad for the Insurance industry and at the end of the day, for all its faults we need a strong insurance sector.

 

My main worry however is Government meddling. Once you brake the model of what a money purchase pension is and turn it into a savings account it is left to the whims and political decisions of future chancellors.

 

It maybe I'm wrong and that this becomes a defining moment that improves peoples retirements, but I cant help thinking that it's the money that will be freed up and spent in the economy that GO has his eye on, rather than the long term future of the nations workers.

 

As I see it the annuity is effectively insurance against living for a long time.

 

Does anybody really fancy living their retirement years watching your savings slowly (hopefully slowly) decline and thinking "right, I have enough to last me another [8] years so need to die before then or live the last years of my life in poverty".

[Whitey Grandad]

As I see it the annuity is effectively insurance against living for a long time.

 

Does anybody really fancy living their retirement years watching your savings slowly (hopefully slowly) decline and thinking "right, I have enough to last me another [8] years so need to die before then or live the last years of my life in poverty".

 

The problem is that for some annuities you need to live for 30 years to get your money back. The drop in annuity rates is complicated but Brown'ms attack on dividends didn't help.

[JackFrost]

Utterly risible response from Milliband so far.

 

I think his best reason for why the 2013 Budget couldn't be trusted was because Osborne travelled on a train with the wrong ticket.

 

He's a total waste of space.

[hypochondriac]

I think his best reason for why the 2013 Budget couldn't be trusted was because Osborne travelled on a train with the wrong ticket.

 

He's a total waste of space.

 

And to think he will probably be the next Prime Minister. I despair.

[bridge too far]

And to think he will probably be the next Prime Minister. I despair.

 

He's bound to better than the current con artist

[SuperMikey]

I'm not a big Tory fan, but can't really find too much to argue with in that budget tbh. Will be interesting to see whether they actually get the deficit down to 0.8% of GDP in 17/18 though..

[hypochondriac]

He's bound to better than the current con artist

 

Being serious for a second, do you really want ed representing Britain on the world stage? It was such a facepalm moment when they chose him over his brother.

[bridge too far]

Being serious for a second, do you really want ed representing Britain on the world stage? It was such a Amoment when they chose him over his brother.

 

Well our current leader isn't too clever at representing our country internationally now, is he? Cameron and William Vague - nightmare duo. Anybody would be better than that pair quite frankly and Miliband is a least worst option.

[JackFrost]

He's bound to better than the current con artist

 

Based on what?

 

He's devoid of any substance whatsoever in a party that's in directionless limbo. Blair shifted Labour to the right and the party no longer represents who it claims to represent as it's stuck in Blair's legacy. Gordon Brown was even resorting to Thatcherism at times with some of his policies when he was PM.

 

I can just about put up with Cameron/Osborne, but the thought of Miliband/Balls in charge of the country is a car crash waiting to happen.

[The Cat]

Being serious for a second, do you really want ed representing Britain on the world stage? It was such a facepalm moment when they chose him over his brother.

 

Completely. Labour would be massively odds on for the next election if they had David as leader.

[LGTL]

Classic Tory election, fantastic if that's your thing. A nice big break for the OAP too, probably those that need it least.

[LGTL]

When is that election again?

[Whitey Grandad]

When is that election again?

 

7th May 2015

 

http://en.wikipedia.org/wiki/Next_United_Kingdom_general_election

[Wade Garrett]

Voted Labour all my life, but even I am having to have to have a real think before voting for that odious pair Milliband and Balls.

 

If David got in, and bought James Purnell back into the front line, and replaced the hapless Balls with his missus, a Labour landslide would be all but guaranteed.

[tony13579]

If you are astute with your pension it's a good budget. If you are a fool, desperate etc you could pay loads of tax, blow the cash and end up destitute and the state would end up keeping you in old age.

 

Draw your whole pension out, blow it on a dream house, boat , holidays, leave less than16k in the bank, hide the rest in gold. Claim benefits, pension credits, cheap fuel, reduced council tax.

[Lord Duckhunter]

As I see it the annuity is effectively insurance against living for a long time.

 

Does anybody really fancy living their retirement years watching your savings slowly (hopefully slowly) decline and thinking "right, I have enough to last me another [8] years so need to die before then or live the last years of my life in poverty".

 

That's exactly as my Dad explained in to me over 30 years ago. He said its the opposite of life insurance. You take out life insurance in case you die and an annuity in case you live a long time.

 

There's a ticking timebomb and its people in their 30's and 40's facing a real drop in living standards once they retire . Browns vandalism of final salary pensions will haunt us for generations, and what for? So he could **** our money away like a drunken sailor on leave.

[CB Saint]

He's bound to better than the current con artist

 

Would rather have basil brush as pm than the chance that balls might be chancellor.

 

the man is a buffoon

 

if Ed had any sense then he will dump him fast

[trousers]

Well our current leader isn't too clever at representing our country internationally now, is he? Cameron and William Vague - nightmare duo. Anybody would be better than that pair quite frankly and Miliband is a least worst option.

 

That'll teach me to eat a bowl of milky cornflakes whilst reading a political thread on the Saints Web Forum #newscreenandkeyboard

[Special K]

As I see it the annuity is effectively insurance against living for a long time.

 

Does anybody really fancy living their retirement years watching your savings slowly (hopefully slowly) decline and thinking "right, I have enough to last me another [8] years so need to die before then or live the last years of my life in poverty".

 

But unlike insurance policies, once you had selected (or been forced into) an annuity scheme, you could not change provider and were stuck with it. Annuity rates were at their best around the year 2000, but have been declining since then and represent poor value for money and a lot of people have been badly "advised" when taking out annuities. I would also be very suprised in those poor b****rs who karked it with money left "in the pot" propped up those who lived longer than predicted. More likely it went on more short term gloss like dividends to shareholders, office relocations and management bonuses!

 

Personally I think it's a good thing. It gives people choice and for those anticipating a maelstrom of pensioners squandering their money as soon as they retire, I prefer to think virtually all will be sensible enough to plan a pension drawdown scheme that will be adequate for their needs. Of course, this assumes that there is enough in the pots in the first place and from my recent pension review, the people investing my money are doing a pretty ****-poor job at the moment.

[Johnny Bognor]

There has been a lot of negative press recently about annuities. How many people actually never get their money back and the finance industry are creaming big profits off of hidden charges and/or excessive charges and ripping people off.

[eurosaint]

The Milliband response was classic 'politics of envy', pure negativity and pathetic name calling !

He is supposed to analyse the statement and offer credible alternatives but instead prattled on about Eton chums and millionaires !

It really was as embarrassing as it was unstatesmanlike IMHO !

[bridge too far]

The Milliband response was classic 'politics of envy', pure negativity and pathetic name calling !

He is supposed to analyse the statement and offer credible alternatives but instead prattled on about Eton chums and millionaires !

It really was as embarrassing as it was unstatesmanlike IMHO !

 

The difficulty ANY shadow leader has is that, unlike normal government statements, they don't get the chance to see the Budget statement before it's announced.

[KK the 2nd]

Not keen on the proposed new pound coin but then again I've never been one for change.

[Lord Duckhunter]

The difficulty ANY shadow leader has is that, unlike normal government statements, they don't get the chance to see the Budget statement before it's announced.

 

But all the others have managed to present some arguments against the budget proposals. Being a bit of a geek I've watched or listened to well over 20 of them and Red Ed's response was by far and away the worst I've ever seen.Dan Hodges claims that had Kinnock's or Blair's aides given them that speech or advised that speech, they'd have been sacked in an instant.

[Whitey Grandad]

If you are astute with your pension it's a good budget. If you are a fool, desperate etc you could pay loads of tax, blow the cash and end up destitute and the state would end up keeping you in old age.

 

Draw your whole pension out, blow it on a dream house, boat , holidays, leave less than16k in the bank, hide the rest in gold. Claim benefits, pension credits, cheap fuel, reduced council tax.

 

That's the best advice I've read so far. The only problem is that you'd need a bloody big pension fund to buy all that stuff.

[pap]

Enjoy your bingo and beer, plebs.

 

http://www.bbc.co.uk/news/uk-politics-26660530

 

Incredible.

[ecuk268]

There has been a lot of negative press recently about annuities. How many people actually never get their money back and the finance industry are creaming big profits off of hidden charges and/or excessive charges and ripping people off.

 

Could go either way.

 

As the insurance companies make a lot of profit from annuities, if people are taking cash instead, it'll either drive annuity rates down further or the industry will have to make them more attractive and flexible to maintain their business.

[pap]