I am in my early 60s and retired at 53. Lots of people gave me pushback because they had difficulty grasping the concept of not working if you don’t have to. I looked at my life as stages. I earned everything I have now through a lot of hard work, but I owe it to myself to “stop and smell the roses” in my final stage of life. In my case I left the country after I retired and live in Latin America. It allowed me to get away from all the negative things happening in America while appreciating my new environment. I have yet to meet anyone who regrets retirement.
Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than a million dollars by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like *Layan Talia Chokr* who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
i have a local government pension and a AVC pension why would i bother with the AVC side if there just going to take it all again ,,,,knowing them they will class me as some sort of rich guy cos i own my own house or saved all my life instead of going out to the pub ...stop sending millions in aid and fix the bloody country and leave everyone's pension alone its not your money labour !!!!!!
Foreign aid is only sent when there is an expectation of a return on the investment. It's just a different kind of investment. You're buying goodwill and future access, whilst also doing a good thing. It's such a tiny percentage of the budget I don't think that will make a difference.
Foreign aid creates future trading partners (when done well) and serves us all. It's just generally (as with everything money related) the benefits only land with the wealthy.
Yep. Dumping £550 a month into my pension and AVC now, (late 30s). If sacrificing for 35+ years in the hope of not being destitute for the last decade or so of your existence is deemed to be 'rich', then we really are sunk as a country!
Why make it less attractive for people to pay into private pensions when, let’s be honest, who can say for sure that they will receive a state pension in later life??
16:20 "You will be paying the top rate of tax on all your income". No, you don't, you only pay 40% tax on anything above £50270, anything below is taxed at 20% whether or not you are a higher rate tax payer. By paying more into your pension (the lesser of 100% of your qualifying earnings or £60,000 maximum) you can stay in the lower tax bracket. Thats also why the freeze on raising the tax thresholds is dragging more people into higher rate and basic rate taxation.
Oh if only it was so simple … once over 100k you lose your tax free lower bracket (currently £12570) at the rate if £1 per £2 earned) - which means from £100k to £125k your marginal tax rate is 60% Don’t get me started on annual allowance charges and pension allowance tapering - that can push your marginal rate above 100%, which is why so many senior doctors retired in the run up to 2019. Improved slightly post 2020 cos they had to change thresholds in the pandemic, otherwise no one could afford to do the required overtime. All labour have to do is tinker with the pension tax / AA taper thresholds again and they could have serious problems implementing their NHS plans.
@@gothmog2441 Thanks for the clarification, and you have sympathies. I'm hoping what ever Labour do in the upcoming budget comes back to bite them on the arse.
I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.
Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!
That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!
Kathie Daisy Bosco Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
Robert Peston thinks that if you cross an income tax threshold you pay the higher rate on all your income!! No. You pay the higher rate on the portion of income above the threshold. My goodness that is basic…
I noticed that error, I think that the guy is past it. His delivery seemed slow, and doddery, but perhaps it was just jetlag !! Like a lot of TH-cam at the moment all of this could have been said in 5 minutes not 21.
Came here to say this. Is Robert Peston really unaware of the concept of marginal tax rates?? So odd. He literally said "pay higher rate of tax on your entire earnings". Either he misspoke or he really has lost the plot.
It’s a poor podcast. The RIP works because you have two genuinely heavyweight intellects whose knowledge is actually insightful. Here you’ve got an “expert” (not on basic tax legislation) paired with “Stef” who looks like she’s on work experience and whose contributions is AI generated. Peston generally ignores her…
Hi Robert, do try not to confuse the audience regarding paying tax on total income if your earning move into the next tax bracket. Only the element above the £50,270 would be taxed at 40%. Cheers James
But if your earnings are already above the higher tax threshold then in actual fact ALL your earnings above this will be taxed at the higher rate. Furthermore, 8f pension tax relief is to be restricted to the basic rate, then everyone earning at the higher tax rate will effectively see a rise in the tax they pay.
It's difficult to restrict tax relief to basic only when so many pensions are done via salary sacrifice. So you'd then need to ban salary sacrifice pensions
Brown has already annually raided pension funds with tax laws that were not changed by the Tories. That is why private pensions for the normal person cannot support a pensioner and government pensions are essential.....unless your a very important person like Starmer.
My final salary scheme is in surplus, Following an Actuary evaluation. So this year our contributions (as a % of salary) will decrease. As will my employers contribution to the fund. My perception is that is the other way round. The state pension is so poor, you really have to save yourself through a private pension throughout your working life.
Did Robert Peston misspeak with his example? Someone on 54k who doesn’t pay into a pension won’t be paying the higher rate tax on all their income. Only approx 4k. This is such an elementary point I can’t believe that Peston doesn’t understand it and it must have been an error. But his copresenter didn’t correct him? The worked example was really confused to be honest. The additional tax paid by a public servant on 54k gross would be at maximum, 4k x 10% so less £40 a month. Not convinced that’s doing much work here. Is that “a very significant tax rise”? (It’s smaller than the NI cuts that Hunt oversaw) He’s also just wrong about final salary pensions. They’re all CARE in the public sector now.
A podcast about money & pensions hosted by two presenters who seem to know nothing about either! Please get a pension expert on to explain pensions in future. The misinformation here is reckless and could lead people to make poor decisions.
exactly , to say that going from 40% to 30% relief , that someone no longer has an incentive to save into their pension is nonsense. its a case of hey here's some free money yay... oh no now its slightly less free money...duh its still free money .
He said you pay 40% tax on ALL your income if you earn 54k which is incorrect - you only pay 40% on anything over the 50k threshold. These posh private school educated people really don’t have to worry about money too much as they come from silver spoon households. If they did they would know that.
Robert doesn't understand the pension tax system or even the basic maths of how tax is paid as you go through the tax bands. Can Robert give an example of getting a pension equivalent to your full final salary ? Gold plated pensions as he describes them are based on 1/60th or 1/80th per every year you work. So if you work 40 years at the council , the maximum you can get is 40/60th of your final salary.
Cut spending? Easy. Do away with 90% of Whitehall and all government departments and local government too. Scrap procurement regs and get stuff done without wasting 300b a year in local government procurement (paperwork) alone.
Get rid of government - what - defence, roads, environmental controls and so on? So - hire mercenaries, pay tolls everywhere you go and have an environment that would make Russia look like a garden? Excellent idea. Perhaps we could change the name of the country to ‘Hades on Thames’?
19:48 having a defined benefit (DB) pension 'equivalent to your entire in-work salary' is extremely unlikely. Most DB pensions have scheme caps for the amount of salary used for the final calculation. Additionally DB schemes tend to have caps on the amount of years that can be used for the final calculation. For example a final salary scheme may stipulate that one earns 1/60th of your pensionable salary for each year, the scheme often stipulates that the pension member can accrue no more than eg 40 years (40/60). The best case scenario is a 2/3rds pension if someone stayed with a single employer for their whole working life, which also these days is unlikely.
I agree with this assessment - I would say it is very unlikely to have a pension equally match an in work salary. Most would be over the moon to achieve 2/3rds of that. A helpful caveat would be to say that I am almost 40 and that much has changed since 2015 as far as public sector Defined Benefit schemes go. For those a little older than me arrangements were more generous before the changes came in. There is certainly no such thing as a final salary scheme for the NHS for new entrants, some retain a final salary link if they were in membership prior to 2015, but the new scheme is based on career averages and all new entrants have no final salary element any longer. Also it is worth noting everyone is paying a lot more to be in the NHS pension than was the case just 5 or so years ago. It is still a great scheme, but the cost of membership continues to rise.
Indeed the 2/3 was in place before the life time allowance was put in place then squeezed down to the £1m to stuff you. That again has been lifted not before people have made long term decisions
Labour has always loved rubbing shoulders with big money. ( financiers and big business)- makes them feel and look important- wrap a condescending arm around the working class, suck up to the elites and kick the middle class in the wallets. Classic labour
I agree it was a funny thing for him to say without any real qualifying statements. However, you have to factor in that pensioners are no longer paying large pension contributions, or National Insurance. At a stretch, you could also factor in that most will have no mortgage payments either. So, whether you are better or worse off will depend on your circumstances.
What Starmer says today is something he will deny saying tomorrow as he views the truth as flexible and not binding. In simple terms he's untrustworthy.
IMO - they should increase Employers NI for all organisations with greater than 50 employees by 5% (18.8%) (may need something different for umbrella companies) and 2% (15.8%) for less than 50. Whilst at the same time increasing the national living wage to around £14 an hour for everyone (dropping the age requirements) which would bring someone on full time hours on this rate to approximately £25,000 a year. If they could also get rid of zero hours contracts and replacing it with 30 hours a week minimum for working age people that are not in full time education - the black hole will probably be covered. Increasing people's wages, taxing companies instead of people, NI doesn't affect pensioners. Added benefit of these proposals is that companies that offshore profits will have less to offshore and more in the pockets of the working people.
CGT. The last government has already reduced the non taxable allowance to £3K from £12K and increased the CGT rates for residental property to a lower rate of 24% with a higher rate of 28%. How much higher can they go without losing revenue.
@@mattsmith1157I would be ok with that and it makes more sense and is fairer. I’m waiting to see what they do and today will determine if I stay in the U.K., or sell up and leave. There are so many great options these days
@@mattsmith1157 The fact inflation is not considered at all at present makes no sense. To make any real gain an investment has to beat inflation over the term of the investment. In the last few years many investments that appear to have made a significant gain have only just about kept pace with inflation - we did have inflation over 10% for a while.
It all reminds me of the old joke about the guy who was asked for directions to Glasgow. “If we’re going to Glasgow, I wouldn’t want to start from here..”
What many public sector people do not understand is that in the private sector to get a pension of £3000 per month you have to save up £1 million after tax. That means that if you have a pension worth £3000pcm your pension pot is £1 million and you are therefore a millionaire. And it is the private sector taxpayer that has made all these public sector workers on £3000 pcm+ pensions millionaires. Exactly how many of these millionaires are there and how much have they cost and do they cost the private sector? Ever since Gordon Brown first started dipping his fingers into private sector pensions to pay for public sector pensions private sector resentment of the public sectors privileges has grown and now that it looks like the Riever is thinking about a change which will reduce public sector benefits there is a certain sense of schadenfreude.
I must have missed Rachel Reeves saying that she intended to do a tax raid on pensions. I remember journalists like Peston speculating that she might do this, and all sorts of other things. Can you ditch something you didn't consider in the first place?
I am a hard worker, an NHS worker and am heavily involved in pensions despite being on a low salary. I would have left the NHS long ago if not for the pension as I know I could earn significantly more elsewhere. I know my pension options would also be less financially rewarding in the private sector but they would also be much more flexible. A higher salary also means I could contribute more so there is that. The NHS pension retirement age is entirely outside my control - when I signed up in my 20s my pension age was 60 - now it is 68 and will rise in line with state pension. At least in the private sector I could get my pension age down to 10 years before state pension if I invested enough. I am ok with some sacrifice for the benefit of my future. I am not what you could call a typical labour supporter but you will find public sector workers understand defined benefit pensions better than most people and know it allows for the less than stellar pay. If that changes a mass exodus of staff should be expected. If 40% tax comes down upon many staff currently paying 20% the same would likely apply.
NHS workers can retire before the state pension age with a reduced pension, depending how many years early you retire. The same 55 age threshold applies for public and private pensions. This was true for my wife with her Council pension which she started drawing this year aged 58, as well as her other govt research institute pension. I've just looked up the NHS page to confirm it is true for the NHS as well. For my wife, I think we worked out that the crossover point of her waiting to start drawing the pension now vs her drawing it at the normal time would be when she's 78 years old. ie Deferring drawing would see her better off if she lives past that age. All that said, she also has a third pension which she is not drawing at the moment, which we set up as a SIPP (self-invested personal pension). I understand your comment that a low salary might restrict the ability to pay extra into a SIPP. We could afford it due to our combined salaries. As a footnote, it should be noted that the average public sector salary only recently dropped below the average private sector salary, so the public sector pension contributions are really a huge benefit. Average public sector pay + govt pension contributions is higher than average private sector pay + company contributions and has been for many years.
ROBERT PESTON DOESN'T UNDERSTAND HOW INCOME TAX WORKS! I'm sorry but this channel is now unlistenable and frankly a joke. To not understand marginal tax rate increases as a supposed economic commentator is utterly ridiculous and amateur. Pathetic.
A bit misleading on how income tax works (unless I misheard you); you don't pay higher rate tax on all your income, you pay higher rate tax on income above the higher rate threshold. The policy of a flat rate for pension tax relief is inherently unfair, a better approach would be to make pensioners pay national insurance (although quite unlikely given the winter fuel payment!), and / or introduce national insurance for employer pension contributions. I just hope they leave pensions alone, we desperately need to encourage more people, especially the young and self employed, to contribute as much to their retirement as possible.
The seemingly obvious and speculated way to reduce higher rate tax relief is to reduce the annual allowance from its current £60k pa. back down to its prior £40k p.a, but as hinted in this piece , that’s would impact the NHS doctors and consultants ( and was arguably one of the main reasons the last govt. introduced it). Also hampering the chancellor is the sheer complexity of introducing a lower ( say 30%) flat pension relief in terms of the employers who administer the salary sacrifice and pensions companies that administer the relief on direct contributions, it would be a lot to cope with either if implemented on 30/10 or even the following tax year. Agreed that NI on employer contributions is easy to implement and likely to be hard to counter. However if that inlcuded employers having to pay NI on salary sacrifice, that would also hit the ‘working people’ as most employers pass a part of this NI saving onto the employee as an enhanced contribution, that would likely cease and so hit those working people.
I think journalists play dumb with pensions. They forget that you are still getting tax relief and all the growth in the pension is tax free. Capping tax relief to 30% would have little or no impact for the majority. As for the defined benefit government pensions, they should give them the choice to opt out for more pay. I think they’ll soon realise what’s best for them in the long term.
On the contrary. It means that people can put in up to 50K and get 30% tax relief instead of 20. Its a good policy actually. Those on 50k plus can afford the extra tax
The growth on a pension like an AVC is not tax-free. 25% nominally can be taken tax-free on uncrystallised amounts but the rest is taxed at your highest marginal rate. If you die before 75 your estate, including the growth, currently passes tax-free (but watch this space). After 75, marginal rates of beneficiaries applies again.
He’s wrong at 16:20. You wouldn’t pay 40% tax on ALL your income. Just on the marginal income above the higher rate tax bracket (and until the 45pc bracket). It’s progressive. He also seems to be treating the other host in a very condescending way. Whenever she makes a comment he seems annoyed.
There are no Final Salary Pension schemes in the public sector. Not the NHS or Local Government. There are in the private sector. I have one. However pension reform will make public sector middle earners like doctors poorer. So that point is right. But really you need to update your knowledge on public sector pensions. The NHS for example has had many changes in the last 16 years.
Disagree. The unions have been clever in telling us they have been reformed. But look at how much taxpayers are propping up the train drivers pensions, for example. Think people would be horrified if this was covered more.
The young people are just brainwashed to be Labour voters at school and university. They don't want to go and study in Europe. Which they can easily do.
Unless i am mistaken You only pay the 40% rate of tax on the money earned over the 40% tax threshold. So you only get 40% tax relief on the money you have earned above the 40% tax thresold. If you earn £10k over the 40% threshold you would only yake £6k of that home in your pay but if you put it into you pension you currently get 40% tax relief on that £10k. if you put it into your pensin by salery sacrifice you would get £10k going into your pension not £6k. the next £10k you put into you pension, you get 20% tax relief on it as you would have only paid 20% tax on it if you had taken it home in you pay. By reducing the higher rate tax relief to 30%, if you tried put the £10k earned over the 40% tax limit into your pension through salery sacrifice would only actally put £9k into your pension the other £1k would get paid in tax. This is a very simplistic view of it, but it would work pretty much like this. Or am i missing something major.
not quite, Its not simple. And there are mnay varaibles that raise your threshold. P11d etc. Basic rate tax reilef of 20%vis added by your pension provider. if you earn £60 gross, ecause 40%tax is taken off above £5270, if you put £8k into a pension it gets made up to £10 gross and you get the benifit of £10 k in your pension. in other words 20% of your basic tax is added to your pension., and then the other 20% is refunded. so if you pay £8k into a penion it becomes £10k, but only costs you £6k in the end to get the £10K . Note that you have to reclaim the 2nd 20% either by contacting HMRC with proof of a pension payment or do a self assesment. This gets really benifical once you earn over £100K abd say invested £8k because that gives you £10k in the pension and 4k refund so only costs £4k to get a £10k pension. If you can do salary sacrifice via your employer you also get the 2% Ni (over £50K) back as well
its complex because pension paymentsare added gross to your salary and raise the tax threshold, but in summary the tax relief is gross, and only earnings above £50,270 get 40% relief. note that unless its salary sacrifice you need to claim the addional 20% from hmrc its not automaticly refunded
Because rich powerful people want freedom to lobby government to make advantageous laws for their benefit, this includes most newspaper & media owners, so population is brainwashed to hate foreigners and blame them for everything, no politician wants to touch it for now. Demography is changing though, brexiters are mainly older / boomers, and the young are pro EU, so fingers crossed for future
@@widebleek8138 Fake information. The UK is saving 10 Billion Euros of NET contributions a year, now its out of the unelected dictatorship. But now we are under an elected dictatorship Sir Two Tier Keir
If Labour continues on this path with regards Taxation the big money will just up sticks and live elsewhere. when I retire in 7 years I am selling up and living in Thailand as soon as I can. If the government carry on as they are all the money will leave the country and then they will tax the rest of us. It's better to have a small slice of cake then rich people taking the cake and leaving the country. I can't wait to leave this country and live in Thailand better Health care . Fairer Taxation and cost of living cheaper.
I am amazed that anyone might have thought Rachel Reeves would make a good chancellor or know how to run the economy is a mystery to me and i suspect others. Aside from having a voice best suited to silent movies and a screen presence suited to radio, her CV isn't great either. The Bank of England has a woeful track record of forecasting and an equally woeful record in its main task of managing inflation. After that she went to work for the retail mortgage division of HBOS the second worst failure in British banking history, caused by a misundestanding of the world's mortgage market. She is academically bright though or at least hard working but there is nothing in her past or in her speeches that gives any indication that she has the slightest idea what might be needed to encourage investment needed to make the economy grow. £22bn splurged on Carboin caopture and storage which has never been made to work so far certainl;y won't cut it.
Nobody in the public sector now gets a final salary pension, they are now in CARE schemes. And nearly all public sector pensions give you 50% of your salary after working for 40 years. Maybe you should get your facts right before talking
Interesting that both of the presenters voices are very annoying. One is cod upper class gent-Peston comes from London working class and the other…let’s not go there. I cannot listen to this programme despite being in their target market
I am in my early 60s and retired at 53. Lots of people gave me pushback because they had difficulty grasping the concept of not working if you don’t have to. I looked at my life as stages. I earned everything I have now through a lot of hard work, but I owe it to myself to “stop and smell the roses” in my final stage of life. In my case I left the country after I retired and live in Latin America. It allowed me to get away from all the negative things happening in America while appreciating my new environment. I have yet to meet anyone who regrets retirement.
Nice way to retire. For me, I believe retirees who struggle to meet their basic needs are the ones who could not accumulate enough money during their active years to meet their needs. Retirement choices determine a lot of things. My wife and I both spent same number of years in the civil service, she invested through a wealth manager and myself through the 401k. We both still earning after our retirement fund has grown way more than it would have with just the 401(k). Haha.
It's unfortunate most people don't have such information. I don't really blame people who panic. Lack of information can be a big hurdle. I've been making more than a million dollars by just investing through an advisor, and I don't have to do much work. Doesn't matter if the economy is misbehaving; great wealth managers will always make returns.
I think this is something I should do, but I've been stalling for a long time now. I don't really know which firm to work with; I feel they are all the same but it seems you’ve got it all worked out with the firm you work with so i surely wouldn’t mind a recommendation.
I definitely share your sentiment about these firms. Finding financial advisors like *Layan Talia Chokr* who can assist you shape your portfolio would be a very creative option. There will be difficult times ahead, and prudent personal money management will be essential to navigating them.
Thank you for this Pointer. It was easy to find your handler, She seems very proficient and flexible. I booked a call session with her.
i have a local government pension and a AVC pension why would i bother with the AVC side if there just going to take it all again ,,,,knowing them they will class me as some sort of rich guy cos i own my own house or saved all my life instead of going out to the pub ...stop sending millions in aid and fix the bloody country and leave everyone's pension alone its not your money labour !!!!!!
Please take a 10/10 for that comment Sir
Foreign aid is only sent when there is an expectation of a return on the investment. It's just a different kind of investment. You're buying goodwill and future access, whilst also doing a good thing. It's such a tiny percentage of the budget I don't think that will make a difference.
Bloody pensioners, bet you have no problem paying for your TV license, land line, and energy burning CRT TVs 😂
Foreign aid creates future trading partners (when done well) and serves us all. It's just generally (as with everything money related) the benefits only land with the wealthy.
Yep.
Dumping £550 a month into my pension and AVC now, (late 30s).
If sacrificing for 35+ years in the hope of not being destitute for the last decade or so of your existence is deemed to be 'rich', then we really are sunk as a country!
Why make it less attractive for people to pay into private pensions when, let’s be honest, who can say for sure that they will receive a state pension in later life??
Enslaving the younger generations..... to pay for older generations taking pension ... its a gigantic ponzi scheme.... WAKEY wokey
16:20 "You will be paying the top rate of tax on all your income". No, you don't, you only pay 40% tax on anything above £50270, anything below is taxed at 20% whether or not you are a higher rate tax payer. By paying more into your pension (the lesser of 100% of your qualifying earnings or £60,000 maximum) you can stay in the lower tax bracket. Thats also why the freeze on raising the tax thresholds is dragging more people into higher rate and basic rate taxation.
Couldn't believe that it was explained like this. Tax brackets aren't that hard!!
Oh if only it was so simple … once over 100k you lose your tax free lower bracket (currently £12570) at the rate if £1 per £2 earned) - which means from £100k to £125k your marginal tax rate is 60%
Don’t get me started on annual allowance charges and pension allowance tapering - that can push your marginal rate above 100%, which is why so many senior doctors retired in the run up to 2019. Improved slightly post 2020 cos they had to change thresholds in the pandemic, otherwise no one could afford to do the required overtime. All labour have to do is tinker with the pension tax / AA taper thresholds again and they could have serious problems implementing their NHS plans.
@@gothmog2441 Thanks for the clarification, and you have sympathies.
I'm hoping what ever Labour do in the upcoming budget comes back to bite them on the arse.
I believe the retirement crisis will get even worse. Many struggle to save due to low wages, rising prices, and exorbitant rents. With homeownership becoming unattainable for middle-class Americans, they may not have a home to rely on for retirement either.
Got it! Buying stocks during a recession when prices are down could be a good move. You might get them at a lower price and sell later when they go up. Just do your homework and be aware of the risks before diving in!
That's awesome! Investing in stocks with a reliable trading system can lead to great outcomes. It's fantastic that you've been working with a financial advisor for a year now. Starting with less than $200K and being just $19,000 away from making half a million in profit is impressive! Keep up the good work!
Mind if I ask you to recommend this particular coach you using their service?
Kathie Daisy Bosco Constable is the licensed fiduciary I use. Just research the name. You’d find necessary details to work with a correspondence to set up an appointment..
She appears to be well-educated and well-read. I ran a Google search for her name and came across her website; thank you for sharing.
Robert Peston thinks that if you cross an income tax threshold you pay the higher rate on all your income!! No. You pay the higher rate on the portion of income above the threshold. My goodness that is basic…
It's hard to take anything he says seriously after that howler
Scary stuff, considering he used to be the economics editor at the BBC .
I noticed that error, I think that the guy is past it. His delivery seemed slow, and doddery, but perhaps it was just jetlag !! Like a lot of TH-cam at the moment all of this could have been said in 5 minutes not 21.
Came here to say this. Is Robert Peston really unaware of the concept of marginal tax rates?? So odd. He literally said "pay higher rate of tax on your entire earnings". Either he misspoke or he really has lost the plot.
It’s a poor podcast. The RIP works because you have two genuinely heavyweight intellects whose knowledge is actually insightful. Here you’ve got an “expert” (not on basic tax legislation) paired with “Stef” who looks like she’s on work experience and whose contributions is AI generated. Peston generally ignores her…
16:10 That's a very fundamental mistake. You would only pay 40% at the margin (over 50200 or whatever it is) not your entire income.
yes complete lack of understanding of basic tax rules
@@tomlloyd1965 Well they are the BBC and ITV aren't they so clueless
Hi Robert, do try not to confuse the audience regarding paying tax on total income if your earning move into the next tax bracket. Only the element above the £50,270 would be taxed at 40%. Cheers James
But if your earnings are already above the higher tax threshold then in actual fact ALL your earnings above this will be taxed at the higher rate. Furthermore, 8f pension tax relief is to be restricted to the basic rate, then everyone earning at the higher tax rate will effectively see a rise in the tax they pay.
You won't ' pay ' more Tax , you'd get less Tax relief , which is different.
@@johnristheanswergood job your not running the UK finances
@@johnsmith-bb1cl Good job * you're * not running the Education department.
It's difficult to restrict tax relief to basic only when so many pensions are done via salary sacrifice. So you'd then need to ban salary sacrifice pensions
19:30 public sector pensions is where the savings and reform should be happening.
Some how I don't think it will happen 😂
I agree
Brown has already annually raided pension funds with tax laws that were not changed by the Tories. That is why private pensions for the normal person cannot support a pensioner and government pensions are essential.....unless your a very important person like Starmer.
My final salary scheme is in surplus, Following an Actuary evaluation. So this year our contributions (as a % of salary) will decrease. As will my employers contribution to the fund. My perception is that is the other way round. The state pension is so poor, you really have to save yourself through a private pension throughout your working life.
To cut the winter fuel allowance is a terrible thing especially for people who are just over the limit.
Nasty party 2.0
Did Robert Peston misspeak with his example? Someone on 54k who doesn’t pay into a pension won’t be paying the higher rate tax on all their income. Only approx 4k. This is such an elementary point I can’t believe that Peston doesn’t understand it and it must have been an error. But his copresenter didn’t correct him?
The worked example was really confused to be honest. The additional tax paid by a public servant on 54k gross would be at maximum, 4k x 10% so less £40 a month. Not convinced that’s doing much work here. Is that “a very significant tax rise”? (It’s smaller than the NI cuts that Hunt oversaw)
He’s also just wrong about final salary pensions. They’re all CARE in the public sector now.
A podcast about money & pensions hosted by two presenters who seem to know nothing about either! Please get a pension expert on to explain pensions in future. The misinformation here is reckless and could lead people to make poor decisions.
Reeve's options are, 1). Office cleaner, 2). Road sweeper, 3). Food delivery on a bike. Any of the above will fully challenge her ability.
That is true of the whole of the Labour party apart from Kate Hooey
you only pay income tax at 40% on the amount over the threshold.
exactly , to say that going from 40% to 30% relief , that someone no longer has an incentive to save into their pension is nonsense. its a case of hey here's some free money yay... oh no now its slightly less free money...duh its still free money .
He said you pay 40% tax on ALL your income if you earn 54k which is incorrect - you only pay 40% on anything over the 50k threshold.
These posh private school educated people really don’t have to worry about money too much as they come from silver spoon households. If they did they would know that.
Cannot believe this came out of Pestons mouth. He should know better.
@@Mr.GeeKhan786 I thought only dumb Americans don't understand income tax brackets but it seems that it eludes Oxford graduates too
Typical Peston, wanting to labour on a main point and never lets facts get in the way.
Robert doesn't understand the pension tax system or even the basic maths of how tax is paid as you go through the tax bands. Can Robert give an example of getting a pension equivalent to your full final salary ? Gold plated pensions as he describes them are based on 1/60th or 1/80th per every year you work. So if you work 40 years at the council , the maximum you can get is 40/60th of your final salary.
Cut spending? Easy.
Do away with 90% of Whitehall and all government departments and local government too.
Scrap procurement regs and get stuff done without wasting 300b a year in local government procurement (paperwork) alone.
Bloody well said. Politicians, read this and implement it.
Get rid of government - what - defence, roads, environmental controls and so on? So - hire mercenaries, pay tolls everywhere you go and have an environment that would make Russia look like a garden? Excellent idea. Perhaps we could change the name of the country to ‘Hades on Thames’?
Starmer is a proven lier , the public simply won't believe that he isn't intent on reversing brexit.
Yes, I bet that's in his mind, he's a traitor.
The only truth is that Starmer is a liar
* liar
19:48 having a defined benefit (DB) pension 'equivalent to your entire in-work salary' is extremely unlikely. Most DB pensions have scheme caps for the amount of salary used for the final calculation. Additionally DB schemes tend to have caps on the amount of years that can be used for the final calculation. For example a final salary scheme may stipulate that one earns 1/60th of your pensionable salary for each year, the scheme often stipulates that the pension member can accrue no more than eg 40 years (40/60). The best case scenario is a 2/3rds pension if someone stayed with a single employer for their whole working life, which also these days is unlikely.
I think you might be wrong when it comes to nhs etc.
I agree with this assessment - I would say it is very unlikely to have a pension equally match an in work salary. Most would be over the moon to achieve 2/3rds of that.
A helpful caveat would be to say that I am almost 40 and that much has changed since 2015 as far as public sector Defined Benefit schemes go. For those a little older than me arrangements were more generous before the changes came in.
There is certainly no such thing as a final salary scheme for the NHS for new entrants, some retain a final salary link if they were in membership prior to 2015, but the new scheme is based on career averages and all new entrants have no final salary element any longer.
Also it is worth noting everyone is paying a lot more to be in the NHS pension than was the case just 5 or so years ago. It is still a great scheme, but the cost of membership continues to rise.
Indeed the 2/3 was in place before the life time allowance was put in place then squeezed down to the £1m to stuff you. That again has been lifted not before people have made long term decisions
Labour has always loved rubbing shoulders with big money. ( financiers and big business)- makes them feel and look important- wrap a condescending arm around the working class, suck up to the elites and kick the middle class in the wallets. Classic labour
I agree it was a funny thing for him to say without any real qualifying statements. However, you have to factor in that pensioners are no longer paying large pension contributions, or National Insurance. At a stretch, you could also factor in that most will have no mortgage payments either. So, whether you are better or worse off will depend on your circumstances.
What Starmer says today is something he will deny saying tomorrow as he views the truth as
flexible and not binding. In simple terms he's untrustworthy.
Higher rate taxpayers lose quite a few benefits as well. It's not just the 40% you start to pay on the small part of your earnings.
IMO - they should increase Employers NI for all organisations with greater than 50 employees by 5% (18.8%) (may need something different for umbrella companies) and 2% (15.8%) for less than 50. Whilst at the same time increasing the national living wage to around £14 an hour for everyone (dropping the age requirements) which would bring someone on full time hours on this rate to approximately £25,000 a year. If they could also get rid of zero hours contracts and replacing it with 30 hours a week minimum for working age people that are not in full time education - the black hole will probably be covered. Increasing people's wages, taxing companies instead of people, NI doesn't affect pensioners. Added benefit of these proposals is that companies that offshore profits will have less to offshore and more in the pockets of the working people.
Cab they stop BD pensions for public sector?
Petrol, Cigarettes and Beer. Labours favorite tax targets.
And all the idiots sitting in the bowling clubs vote for them as staunch Labour supporters
CGT. The last government has already reduced the non taxable allowance to £3K from £12K and increased the CGT rates for residental property to a lower rate of 24% with a higher rate of 28%. How much higher can they go without losing revenue.
Bring them in line with income tax rates and reintroduce the allowance for inflation just as in the past.
@@mattsmith1157I would be ok with that and it makes more sense and is fairer. I’m waiting to see what they do and today will determine if I stay in the U.K., or sell up and leave. There are so many great options these days
@@mattsmith1157
The fact inflation is not considered at all at present makes no sense.
To make any real gain an investment has to beat inflation over the term of the investment.
In the last few years many investments that appear to have made a significant gain have only just about kept pace with inflation - we did have inflation over 10% for a while.
Universaties here are already advertising for immigrants plus they get £10,000 tax free and accommodation.
But fees have been put up for Brits kids.
That’s not true is it?
No. It’s another native reliant on welfare blaming immigrants that are paying for said benefit.
They could always find ways to reduce spending?
It all reminds me of the old joke about the guy who was asked for directions to Glasgow. “If we’re going to Glasgow, I wouldn’t want to start from here..”
What many public sector people do not understand is that in the private sector to get a pension of £3000 per month you have to save up £1 million after tax. That means that if you have a pension worth £3000pcm your pension pot is £1 million and you are therefore a millionaire. And it is the private sector taxpayer that has made all these public sector workers on £3000 pcm+ pensions millionaires. Exactly how many of these millionaires are there and how much have they cost and do they cost the private sector?
Ever since Gordon Brown first started dipping his fingers into private sector pensions to pay for public sector pensions private sector resentment of the public sectors privileges has grown and now that it looks like the Riever is thinking about a change which will reduce public sector benefits there is a certain sense of schadenfreude.
I must have missed Rachel Reeves saying that she intended to do a tax raid on pensions. I remember journalists like Peston speculating that she might do this, and all sorts of other things. Can you ditch something you didn't consider in the first place?
Really wanted this message but Peston makes my skin crawl to the point I only lasted seconds.!
I am a hard worker, an NHS worker and am heavily involved in pensions despite being on a low salary.
I would have left the NHS long ago if not for the pension as I know I could earn significantly more elsewhere. I know my pension options would also be less financially rewarding in the private sector but they would also be much more flexible. A higher salary also means I could contribute more so there is that. The NHS pension retirement age is entirely outside my control - when I signed up in my 20s my pension age was 60 - now it is 68 and will rise in line with state pension. At least in the private sector I could get my pension age down to 10 years before state pension if I invested enough. I am ok with some sacrifice for the benefit of my future.
I am not what you could call a typical labour supporter but you will find public sector workers understand defined benefit pensions better than most people and know it allows for the less than stellar pay. If that changes a mass exodus of staff should be expected. If 40% tax comes down upon many staff currently paying 20% the same would likely apply.
NHS workers can retire before the state pension age with a reduced pension, depending how many years early you retire. The same 55 age threshold applies for public and private pensions. This was true for my wife with her Council pension which she started drawing this year aged 58, as well as her other govt research institute pension. I've just looked up the NHS page to confirm it is true for the NHS as well.
For my wife, I think we worked out that the crossover point of her waiting to start drawing the pension now vs her drawing it at the normal time would be when she's 78 years old. ie Deferring drawing would see her better off if she lives past that age. All that said, she also has a third pension which she is not drawing at the moment, which we set up as a SIPP (self-invested personal pension). I understand your comment that a low salary might restrict the ability to pay extra into a SIPP. We could afford it due to our combined salaries.
As a footnote, it should be noted that the average public sector salary only recently dropped below the average private sector salary, so the public sector pension contributions are really a huge benefit. Average public sector pay + govt pension contributions is higher than average private sector pay + company contributions and has been for many years.
So... where in the podcast did they say RR has ditched anything??
Even before the budget we have cut out earnings. Not nice to be hated for working hard and saving.
ROBERT PESTON DOESN'T UNDERSTAND HOW INCOME TAX WORKS! I'm sorry but this channel is now unlistenable and frankly a joke. To not understand marginal tax rate increases as a supposed economic commentator is utterly ridiculous and amateur. Pathetic.
A bit misleading on how income tax works (unless I misheard you); you don't pay higher rate tax on all your income, you pay higher rate tax on income above the higher rate threshold. The policy of a flat rate for pension tax relief is inherently unfair, a better approach would be to make pensioners pay national insurance (although quite unlikely given the winter fuel payment!), and / or introduce national insurance for employer pension contributions. I just hope they leave pensions alone, we desperately need to encourage more people, especially the young and self employed, to contribute as much to their retirement as possible.
After the Lion, the witch and the designer wardrobe of the Blair / Prescott era could history be repeating itself?
got sacked off from the BofE for ‘incompetence’ after a six month tenure 😂
Chapter headings would help
The seemingly obvious and speculated way to reduce higher rate tax relief is to reduce the annual allowance from its current £60k pa. back down to its prior £40k p.a, but as hinted in this piece , that’s would impact the NHS doctors and consultants ( and was arguably one of the main reasons the last govt. introduced it). Also hampering the chancellor is the sheer complexity of introducing a lower ( say 30%) flat pension relief in terms of the employers who administer the salary sacrifice and pensions companies that administer the relief on direct contributions, it would be a lot to cope with either if implemented on 30/10 or even the following tax year. Agreed that NI on employer contributions is easy to implement and likely to be hard to counter. However if that inlcuded employers having to pay NI on salary sacrifice, that would also hit the ‘working people’ as most employers pass a part of this NI saving onto the employee as an enhanced contribution, that would likely cease and so hit those working people.
Does anyone think this PM would go back on the EU fishing reduction due in 2026
I think journalists play dumb with pensions. They forget that you are still getting tax relief and all the growth in the pension is tax free. Capping tax relief to 30% would have little or no impact for the majority. As for the defined benefit government pensions, they should give them the choice to opt out for more pay. I think they’ll soon realise what’s best for them in the long term.
On the contrary. It means that people can put in up to 50K and get 30% tax relief instead of 20. Its a good policy actually. Those on 50k plus can afford the extra tax
@@voice.of.reason but if you only earn below the higher rate threshold you’re unlikely to have £50k to put in a pension.
The growth on a pension like an AVC is not tax-free. 25% nominally can be taken tax-free on uncrystallised amounts but the rest is taxed at your highest marginal rate. If you die before 75 your estate, including the growth, currently passes tax-free (but watch this space). After 75, marginal rates of beneficiaries applies again.
@@Nobodyknowsmeanymore-n4f so does the pension pay cgt or income tax on gains or investment income?
He’s wrong at 16:20. You wouldn’t pay 40% tax on ALL your income. Just on the marginal income above the higher rate tax bracket (and until the 45pc bracket). It’s progressive.
He also seems to be treating the other host in a very condescending way. Whenever she makes a comment he seems annoyed.
It's never that hard for the Tories to come back, that's why they are jolly. They have the entire weight of the establishment behind them.
But didn’t Labour say all their manifesto pledges were fully funded?
Hmm RP didn't actually touch the issue of the 25% tax-free sum from the pension-pot, which is the big deal we all want to know about.
There are no Final Salary Pension schemes in the public sector. Not the NHS or Local Government. There are in the private sector. I have one. However pension reform will make public sector middle earners like doctors poorer. So that point is right. But really you need to update your knowledge on public sector pensions. The NHS for example has had many changes in the last 16 years.
Disagree. The unions have been clever in telling us they have been reformed. But look at how much taxpayers are propping up the train drivers pensions, for example. Think people would be horrified if this was covered more.
@jaaguitar most train drivers aren't truly public sector anymore though are they?
I’m 45 with a £6M net worth. I’m already looking to leave the UK.
We've already left. get on your bike.
Most young British people would love to live and work in the EU? We mix in very different circles 😂😂😂
You need a visa to do that, and that was true before Brexit too.
The young people are just brainwashed to be Labour voters at school and university. They don't want to go and study in Europe. Which they can easily do.
As others have commented there are numerous sweeping statements here that are just plain wrong.
Most 'young British people' I suspect don't give any thought to living and working in the EU.
There are far too many jobs worths in all levels of government stopping growth while getting paid way over they were worth.
Is this a BBC or ITV programme?
Unless i am mistaken You only pay the 40% rate of tax on the money earned over the 40% tax threshold.
So you only get 40% tax relief on the money you have earned above the 40% tax thresold.
If you earn £10k over the 40% threshold you would only yake £6k of that home in your pay but if you put it into you pension you currently get 40% tax relief on that £10k. if you put it into your pensin by salery sacrifice you would get £10k going into your pension not £6k.
the next £10k you put into you pension, you get 20% tax relief on it as you would have only paid 20% tax on it if you had taken it home in you pay.
By reducing the higher rate tax relief to 30%, if you tried put the £10k earned over the 40% tax limit into your pension through salery sacrifice would only actally put £9k into your pension the other £1k would get paid in tax.
This is a very simplistic view of it, but it would work pretty much like this.
Or am i missing something major.
not quite, Its not simple. And there are mnay varaibles that raise your threshold. P11d etc. Basic rate tax reilef of 20%vis added by your pension provider. if you earn £60 gross, ecause 40%tax is taken off above £5270, if you put £8k into a pension it gets made up to £10 gross and you get the benifit of £10 k in your pension. in other words 20% of your basic tax is added to your pension., and then the other 20% is refunded. so if you pay £8k into a penion it becomes £10k, but only costs you £6k in the end to get the £10K . Note that you have to reclaim the 2nd 20% either by contacting HMRC with proof of a pension payment or do a self assesment. This gets really benifical once you earn over £100K abd say invested £8k because that gives you £10k in the pension and 4k refund so only costs £4k to get a £10k pension. If you can do salary sacrifice via your employer you also get the 2% Ni (over £50K) back as well
Putting CGT up won't generate any money. To do it would be purely political and incredibly short sighted. I expect they'll do it.
Starmer openly stated he preferred Davos to Westminster
Headline little to do with actual discussion
Can’t believe a word labour says
He really doesn’t get tax relief on pensions or salary sacrifice does he?!
Of course immigration from EU is immigration. They aren't British! Factchecker might help in preparing this show.
Is the 40% pensions relief on your TOTAL pensions contribution? Believe it is now, and that's the point being made.
its complex because pension paymentsare added gross to your salary and raise the tax threshold, but in summary the tax relief is gross, and only earnings above £50,270 get 40% relief. note that unless its salary sacrifice you need to claim the addional 20% from hmrc its not automaticly refunded
These two always worth listening to.
You are not paying 40% tax on all your income, at a salary of £54000.
I thought Peston loved Labour???????
Who are these people, what rubbish they talk
350 a month for me if 30% is imposed.
Peston announced he left the Tories. ?!?
Not accurate, final salary scheme was stopped for civil servants in 2015, we are now defined benefit
Final salary is a defined benefit as is career average (CARE) the current civil service pensions
Why don’t you guys rejoin the EU?
Referendum decided the issue. can’t try and undo that for decades. EU would give us a terrible deal , force the euro on us and political rules.
@@coderider3022 Well it’s got to be better than this! This country is losing 140 billion pounds a year.
Is Brexit a success?
Because rich powerful people want freedom to lobby government to make advantageous laws for their benefit, this includes most newspaper & media owners, so population is brainwashed to hate foreigners and blame them for everything, no politician wants to touch it for now.
Demography is changing though, brexiters are mainly older / boomers, and the young are pro EU, so fingers crossed for future
@@widebleek8138 Fake information. The UK is saving 10 Billion Euros of NET contributions a year, now its out of the unelected dictatorship. But now we are under an elected dictatorship Sir Two Tier Keir
If Labour continues on this path with regards Taxation the big money will just up sticks and live elsewhere. when I retire in 7 years I am selling up and living in Thailand as soon as I can. If the government carry on as they are all the money will leave the country and then they will tax the rest of us. It's better to have a small slice of cake then rich people taking the cake and leaving the country. I can't wait to leave this country and live in Thailand better Health care . Fairer Taxation and cost of living cheaper.
Facts wrong about final pension for public servants. This has changed. Do your homework, Peston.
A bit of ramble. Doesn't talk about pensions until 15 minutes and only says it might not happen
Less explicit than the daily mail this morning
Some of the basics were so off, he may be a sound political reporter, but an economist he is not
The playlist is not being updated th-cam.com/play/PLyOElNKytnZsWIxo5idnhexzLta075aDh.html
I am amazed that anyone might have thought Rachel Reeves would make a good chancellor or know how to run the economy is a mystery to me and i suspect others. Aside from having a voice best suited to silent movies and a screen presence suited to radio, her CV isn't great either. The Bank of England has a woeful track record of forecasting and an equally woeful record in its main task of managing inflation. After that she went to work for the retail mortgage division of HBOS the second worst failure in British banking history, caused by a misundestanding of the world's mortgage market. She is academically bright though or at least hard working but there is nothing in her past or in her speeches that gives any indication that she has the slightest idea what might be needed to encourage investment needed to make the economy grow. £22bn splurged on Carboin caopture and storage which has never been made to work so far certainl;y won't cut it.
She speaks like a commoner
But Starmer is a lier
* liar
@@johnristheanswer yes he’s the lier
@@johnristheanswer yes he is
@@johnristheanswer oh yes he is 🤣🤣🤣
@
Think again
Does anyone believe or trust two tier Kia
Nobody in the public sector now gets a final salary pension, they are now in CARE schemes. And nearly all public sector pensions give you 50% of your salary after working for 40 years. Maybe you should get your facts right before talking
This is why I stopped listening to their podcast. It's almost content free, and invariably factually incorrect.
Conservatives, partying,never??.????😂
Interesting that both of the presenters voices are very annoying. One is cod upper class gent-Peston comes from London working class and the other…let’s not go there. I cannot listen to this programme despite being in their target market
Increasing tax won’t do much for growth will it, these two are clueless btw.
How does this guy not know that higher rate tax is only paid on part of a 54k salary-surely someone reviews this. Unprofessional
Especially when he used to be Businees and Economics editor at the BBC.
It's a pretty lazy explanation that could easily be interpreted wrongly! That's his BBC training 😂