The potential of no longer paying National Insurance.

I withdrew the comment, on the grounds that it wasn't worth the hassle of having to keep explaining what I meant

You do not need an accountant to make sure you are being tax efficient. How many people on GN have an ISA, or whatever it is now called?

There is only one reason for having an ISA and that is because there is a tax advantage from having one. Most people put their savings in an ISA without the help of an accountant. Then there are the tax advantages of saving for a pension in a pension wrapper of some kind, again accountants are rarely involved.

Ok, I have explained that I was not suggesting that anyone would evade tax, as that is, of course, illegal. I was simply saying that people with that sort of money will more than likely employ people to help them to avoid tax, which is perfectly legal, and no accountant worth her salt would allow a client to miss out on a means-tested pension if their finances could be more efficiently arranged so that they could claim it.

As nobody seems to be reading my posts, however, I will withdraw that comment.

Doodledog

Anyone with £2million is likely to pay an accountant to ensure that only £199900 is visible to any auditors. What's the point of penalising them anyway? They will, presumably, be paying a lot of tax.

In any case, that's never the way governments think. the better off are rarely penalised. It will bring in more if anyone with over £100k in assets or £20k a year in income has their pension cut, as there are far more of them than there are people with millions.

Don’t be daft anyone who is worth that much knows you don’t try to evade the tax man, only a fool does that, everything is transparent these days and has to be accounted for. They can check every Bank Account and transaction.

That’s how they caught Nadin Zahawi MP he “forgot” to declare property sold, he had to pay the tax, a fine and costs.

AARRGGHH! I didn't say there was

I was making the point that having a cutoff at that sort of level would be less profitable than making it much much lower, as there would be fewer people involved and they would ensure that if they didn't need to lose their pension they wouldn't.

And there is nothing wrong with that.

I wasn't suggesting anything illegal, but how to be 'tax efficient', which does mean moving things around so that you pay as little tax as possible. I have no doubt that ensuring that (assuming your funds are on a borderline) you don't have more than you need to qualify for a pension would come under that banner. It could be donations of a few pounds here or there, or moving money from husband to wife - that sort of thing. Not illegal, just what an accountant is paid for - maximising financial efficiency.

No, Doodledog, accountants are employed to make sure the records are correct and accomplished perfectly. Those who hide funds, imo, do it without their accountant being involved. Why would an accountant do anything illegal?

We pay an accountant. I keep perfect records, but I'm not qualified on rules, better someone who understands than me muddling.

BTW, Pensions shouldn't be cut, pensions should go up to a reasonable living standard. Or that's my opinion.

I disagree Doodledog as to the employment of accountants. I have used an accountant since I became self employed as a lawyer and I don’t do it to make anything invisible. I continue to use an accountant simply because my income is derived from a variety of sources, fluctuates, and I pay income, dividends and capital gains tax. I could do it myself but like is too short. £2m of assets isn’t a huge amount nowadays, especially if you own a house in the south east and have had a good career which enabled you to pay into a private pension and perhaps other investments. Yes, people with a fair amount of money generally also pay a lot of tax, and have done for a long time.

Anyone with £2million is likely to pay an accountant to ensure that only £199900 is visible to any auditors. What's the point of penalising them anyway? They will, presumably, be paying a lot of tax.

In any case, that's never the way governments think. the better off are rarely penalised. It will bring in more if anyone with over £100k in assets or £20k a year in income has their pension cut, as there are far more of them than there are people with millions.

MaizieD

Well, one thing you can be reasonably sure of, *MOnica', is that not one of us Gnet posters is likely to be in the 'seriously wealthy or above' category, unless we have som whose incomes exceed a £million or so per annum.

And if there is anyone in that category who thinks that they are really badly off and that we're all small mindedly green with envy of them, then they're living in cloud cuckoo land.

I wouldn’t expect many to have an income of £100k plus in retirement. Because it will be invested in pensions, property or other, so add a house, quite likely £2m in total assets.

Well, one thing you can be reasonably sure of, *MOnica', is that not one of us Gnet posters is likely to be in the 'seriously wealthy or above' category, unless we have som whose incomes exceed a £million or so per annum.

And if there is anyone in that category who thinks that they are really badly off and that we're all small mindedly green with envy of them, then they're living in cloud cuckoo land.

There isn’t an answer which everybody will agree on Monica. To me, wealthy is having enough assets so that you can maintain everything you have, replace when necessary, live a good life and still continue to accumulate wealth with no need to dip into your savings. What constitutes a good life is different for different people of course, and unless you are in that position you still have to think about your finances and prioritise what you are going to spend on.

The question that there is never an answer on, and I have aksed this question on a number of threads were peoplewrite about what should happen to 'the wealthy' and their money, is that we ever get a definition of wealth.

As I asked up thread. Is it capital or income or both and how should the balance go. Is it those earning twice the average annual income or ten times, people whose assets are twice the price of an average house or ten times?

Katie59

M0nica

There is no justification for paying a state pension to those with wealth

I presume, in that circumstance, all contributions, with interest, would be paid back to those who had contributed to their pension, but were too wealthy to get one.

What is your definition of wealthy, is it based on capital or income or a mixture of the two?

It’s already been spent hasnt it and new contributions are partially funding current pensions.

The only place that more can be directed to those in need is from those the have more than they need. Nobody likes wealth taken away it’s always someone else that should pay.

You may as well say that if your house catches fire and you 'can afford' to make good your losses that you shouldn't expect to be able to claim on your insurance, as the money is needed to fund those who haven't insured their own houses and find themselves in trouble.

I am fully aware, as no doubt are most of us, that the money has already been spent. That is not the point, though. The expectation was that we would pay for the previous generation, the next would pay for us, and that the government would manage the system so that this would remain possible, as they had the knowledge of demographics and so on that would make our contributions safe in our hands. That they have failed to do so is not the fault of individuals, but of the governments who have mismanaged things and refused to do anything about the mismanagement.

Of course taking money from everyone who works and giving it to those who don't removes incentive. It really doesn't matter whether one believes that taxation funds spending or not (although in my previous post I made a special footnote to acknowledge that point of view) as it is the practicality that matters. If having £X in the bank makes someone ineligible for a pension despite their having paid in for decades, why wouldn't they stop working when they reach £X-1? Doctors are doing that all the time with private pensions. The sums are much smaller where state pensions are concerned, but the principle is the same.

Nor does it matter whether NI is ring-fenced for pensions or social care - again, the principle is the same as if it were simply added to taxation. It is those who work who pay it, and on the whole those people are also contributing to society by producing 'things' or providing services.

To me, it is perfectly fair that those who earn more pay more, but it is not fair that those who don't work pay nothing (with exclusions as per previous post) yet are given money which is denied to those who contribute, or to means-test contributors both when they pay in and when they take out. A pension should be a universal benefit. If this proves too expensive then steps should be taken to take contributions from those opting out of work or to means-test those who haven't contributed, not those who have. I don't know how anyone can believe that it would be fair to means-test contributors in order to pay pensions to those who have not contributed.

I agree that we need the incentive to work and improve ourselves but property price inflation is not work it is a windfall. That’s what make us “boomers” so much better off than our children and especially grandchildren

It's just academic, though. An amount on paper.
And who will benefit from this property price inflation? Unless it goes in care home fees, then our children and/or grandchildren.

Or the cats' and dogs' home if they whinge too much about the wealth of baby boomers.

TinSoldier

The Australian state pension system operates on a non-contributory basis.

And means-tested.

nanna8

We don’t get a penny from the Australian state pension despite the fact that we have worked 40 years in my case, similar for husband. We rely on our private pension. If you don’t work or had a very low income you get everything including reduced council rates, free medical things etc.Moral being, don’t work too hard !

I know someone who worked extremely hard all her life from the age of 14; most of their 'wealth' went in his care home fees.

Luckily, after her husband died, she was able to afford a retirement property, and she received the Australian state pension (much more generous than ours) but then that property was sold for her care home fees.

TinSoldier

You are changing the subject.

You said:

There is no justification for paying a state pension to those with wealth.

but are silent on what you believe constitutes "wealth" for those who have spent a long working life contributing to both state and workplace pensions.

You argue that the UK should means test like Australia but that country's state pension is not contributory so that comparison does not hold water.

I am proposing that the UK could have a non contributory pension but is that not the case in the UK now, NH contributions are only extra taxation, if we accept that taxation does not fund spending.

Wealth is your entire assets, property, pensions, investments, and cash in hand.

I agree that we need the incentive to work and improve ourselves but property price inflation is not work it is a windfall. That’s what make us “boomers” so much better off than our children and especially grandchildren.

We don’t get a penny from the Australian state pension despite the fact that we have worked 40 years in my case, similar for husband. We rely on our private pension. If you don’t work or had a very low income you get everything including reduced council rates, free medical things etc.Moral being, don’t work too hard !

(or money creation - in case Maizie is reading).

😂

I'm reading, growstuff, but it's pointless joining in when everyone is having so much fun with a discussion based on the 'taxation funds spending' myth...

It’s always the same on GN - people talk about ‘wealth’ but are never willing to define it. Is anyone who owns their house and is mortgage-free ‘wealthy’ even if they have no savings? The reality is that ‘wealth’ is entirely subjective.

You are changing the subject.

You said:

There is no justification for paying a state pension to those with wealth.

but are silent on what you believe constitutes "wealth" for those who have spent a long working life contributing to both state and workplace pensions.

You argue that the UK should means test like Australia but that country's state pension is not contributory so that comparison does not hold water.

“You are arguing to dissuade people from working and making provision for their old age.”

There are a lot who are feckless, avoid work and live off benefits now. Most of the low waged do work because they want to improve their lives, none of us know what the future will bring but most of us try to improve.

Regardless of capital taxation a better income enables a better standard of living, there is plenty of incentive to work.

The Australian state pension system operates on a non-contributory basis.