Pensions ,Prescriptions & Racheal Reeve’s

We've heard the rumour, no idea who started it, that being able to take 25% of your pension pot tax free is going to be done away with.

If and when it's announced, there's going to be an awful lot of people drawing it out while they can and we'll be among them.

Uproars tend to wash over them though. As GG said upthread - they are hopeless at reading the room and getting what matters to the people who elected them.

I am a natural Tory voter but had great hopes for this new government. I am so disappointed in their performance already. I hope the budget restores my faith but I very much doubt it will.

kittylester you have summed up my feelings perfectly.

GrannyGravy13

There has been a trend for many, many years to leak proposed budget changes/cuts to get the measure of public response.

Unfortunately the current cohort appear to be exceptionally inept at ^reading the room^

I guess it depends on which room 'the current cohort' is reading.

Many younger people (check out Mumsnet) who have crippling mortgages, low wages and high childcare costs can see no reason why people of all income levels should get a benefit to pay their fuel bills, or why people of working age should get free prescriptions based purely on age when younger people have to pay for them.

There has been a shift from the Tories desperately clinging to votes from the over 65s to the new government trying to be fairer to everyone of all ages. That is not 'targeting pensioners'.

Anyway, it's not even been announced yet, and nor has anything been said about bus passes.

OK, lets be clear about the "who started"the rumour

Its in the front page of the Telegraph today.

Everyday I player news shows the front pages and gives a summary so:

"The paper's top story says the government is looking at making cuts to the tax-free lump sum savers can withdraw from their pensions (per annum).

It says the government has asked one of the country's leading pension providers to assess the impact of cutting it from a maximum of £268,275 to £100,000."

so if all this actually comes to be as opposed to speculation then its not down to "being done away with"

but setting an amount as opposed to a percentage of non-tax withdrawals.

rosie1959

NotSpaghetti

I never understood why prescriptions are free at 60.
Why?

It does seem a bit odd now the pension age has increased. I don’t have any regular prescription items but my DH has a few and he used to pay the yearly certificate which was around £100 he was a bit bemused when he reached 60 and no longer had to pay when he didn’t retire until he was 66
But I suspect anything is far game in regards to the budget never thought I would see Labour remove the WFA but they have.
I suspect they may alter the tax free drawdown on pension pots but this will have to be on larger amounts or there will be one hell of an uproar.

As far as pensions are concerned, I think it's possible that people over the 40% tax threshold when they pay into their pensions won't receive the full exemption from tax. It's about time something was done about this because higher earners are effectively receiving a higher subsidy from the government on their contributions.

Wyllow3

😂 here we go, "rumour has it".....

"I've heard that"

"I read that"

I came off X to get away from that nonsense but clearly it’s prevalent on here now, such a shame.

Would cutting the tax free sum limit mean that fewer people would take out a lot of money and leave themselves without enough to live on, so end up claiming benefits? Or is it that pension contributions are tax free when made, so the idea is that you pay tax when it becomes income?

Sorry if that's nonsense, but I didn't need to think about that sort of thing as my occupational pension was a fixed amount based on salary, and I had no say over how much lump sum I took (Mr D's was the same). I don't really understand the motive behind possible cuts to the lump sum, and think it's important to understand that before deciding whether I think it's a good idea or not.

To repeat: the Telegraph rumour is not suggesting tax would be paid on all withdrawals from pension pots.

The speculation is that instead of the tax free withdrawals being 25%, it is £100.000, which works in favour of those on the lowest pension pots.

but its still all speculation!

I'd like to ask the O/P what she means by

"I personally think she should be looking at long term dole dossses & while families who rely solely on benefits!"

In practical terms, what are you suggesting, NanaTuesday?

Isn't putting money in your pension tax free? If so I'm not sure why it should come out tax free as well. Seems like a tax advantage to those who could afford to put money away so very different to the WFA.

Making free prescription age line up with SPA seems reasonable.

We will have to wait and see. Some of my friends are concerned that she may remove the 25% discount on council tax for sole occupancy homes.
Free prescriptions should come in line with retirement.
I have a friend who has lived in Calpe, Spain for many years and will get the full WFA as the Government say they cannot means test ex-pats. Not sure why but as she hardly bothers putting the heating on she will use it for Christmas presents, thanks very much!!!

theworriedwell

Isn't putting money in your pension tax free? If so I'm not sure why it should come out tax free as well. Seems like a tax advantage to those who could afford to put money away so very different to the WFA.

Making free prescription age line up with SPA seems reasonable.

That's what I was asking unthread. If that's the case it seems fair enough.

I know it's all speculation, but it is still important to understand what motivates possible moves. Failure to understand that can lead to the sort of paranoia that makes people talk about 'attacks on pensioners'.

Doodledog

theworriedwell

Isn't putting money in your pension tax free? If so I'm not sure why it should come out tax free as well. Seems like a tax advantage to those who could afford to put money away so very different to the WFA.

Making free prescription age line up with SPA seems reasonable.

That's what I was asking unthread. If that's the case it seems fair enough.

I know it's all speculation, but it is still important to understand what motivates possible moves. Failure to understand that can lead to the sort of paranoia that makes people talk about 'attacks on pensioners'.

Sorry, I must have missed your post. Postman came to the door so maybe I skipped a few.

I agree with you that we do need to understand properly what is being proposed, if it is proposed. I don't think the media is always very clear about this and then you hear all the rumours which aren't always very factual.

kittylester

Uproars tend to wash over them though. As GG said upthread - they are hopeless at reading the room and getting what matters to the people who elected them.

I am a natural Tory voter but had great hopes for this new government. I am so disappointed in their performance already. I hope the budget restores my faith but I very much doubt it will.

My feelings too.
To see the same snouts in the trough was on unthinkable but I don’t see any upward movement in our economy, in confidence in the £ or even confidence in our handling of international affairs.
Nobody could expect miracles in 12 (?) weeks but it’s all downhill from what I read.

Some of my friends are concerned that she may remove the 25% discount on council tax for sole occupancy homes

What information has this speculation been based on?

See Telegraph report 22nd September

uk.news.yahoo.com/rachel-reeves-won-t-scrap-154942874.html

theworriedwell

Doodledog

theworriedwell

Isn't putting money in your pension tax free? If so I'm not sure why it should come out tax free as well. Seems like a tax advantage to those who could afford to put money away so very different to the WFA.

Making free prescription age line up with SPA seems reasonable.

That's what I was asking unthread. If that's the case it seems fair enough.

I know it's all speculation, but it is still important to understand what motivates possible moves. Failure to understand that can lead to the sort of paranoia that makes people talk about 'attacks on pensioners'.

Sorry, I must have missed your post. Postman came to the door so maybe I skipped a few.

I agree with you that we do need to understand properly what is being proposed, if it is proposed. I don't think the media is always very clear about this and then you hear all the rumours which aren't always very factual.

I wasn't having a go, theworriedwell, I was saying that I agree .

I understand about leaking things to gauge reaction, but nothing has been announced, and even if things like paying for prescriptions came to pass they wouldn't be 'attacks on pensioners' - they would be levelling things up so that pensioners don't get special treatment just for being older. I think that when prescriptions became free at 60 people were comparatively 'older' then - my grandmother seemed like an old lady at 60, when these days 60 year olds are only slightly past their prime.

It can't be right that a young mum with something like asthma has to pay for inhalers and drugs to sort the chest infections that often go with the territory when she is also paying high housing costs, childcare and so on and the 60 year old sitting next to her at work gets them free, despite having a higher salary, a house that is paid for and no dependents. Removing that inequality would not be an 'attack on pensioners' - 60 year olds are not pensioners for another 6 or 7 years (and the 30 year old will have to work for even longer). It would be (if it happens) a removal of an advantage based simply on age - and why not? Nobody is suggesting that actual pensioners pay for prescriptions, are they? Although who knows - if we are expected to believe 'I heard', 'I saw' and 'they say' all the time, pretty much all possibilities will be taken as read.

NotSpaghetti

But they aren't generally so here in England Allira - though I know there are lots of "exceptions".

I know, it's an anomoly.

Many younger people (check out Mumsnet) who have crippling mortgages, low wages and high childcare costs can see no reason why people of all income levels should get a benefit to pay their fuel bills, or why people of working age should get free prescriptions based purely on age when younger people have to pay for them.

I can understand that point of view BUT the crux of the matter is that the WFA being taken away from the majority of pensioners means a reduction in income. How many other groups are having a reduction in their salaries or wages?
That is what is unfair.

Crippling mortgages? Oh yes, I remember those in the 1980s.

kittylester

Uproars tend to wash over them though. As GG said upthread - they are hopeless at reading the room and getting what matters to the people who elected them.

I am a natural Tory voter but had great hopes for this new government. I am so disappointed in their performance already. I hope the budget restores my faith but I very much doubt it will.

I'm disappointed so far too, kittylester, having voted for them in the hopes and expectation of change for the better.

Early days? Well, it's not been a promising start so far.

Prescriptions are free after 60 because that was the retirement age for women some years ago. It was when I finally retired 4 years later in 2007.

Sarnia

We will have to wait and see. Some of my friends are concerned that she may remove the 25% discount on council tax for sole occupancy homes.
Free prescriptions should come in line with retirement.
I have a friend who has lived in Calpe, Spain for many years and will get the full WFA as the Government say they cannot means test ex-pats. Not sure why but as she hardly bothers putting the heating on she will use it for Christmas presents, thanks very much!!!

I am not sure that your friend will get her WFA, according to Gov.uk
www.gov.uk/winter-fuel-payment/if-you-live-abroad

If I have read it correctly?

Doodledog

theworriedwell

Doodledog

theworriedwell

Isn't putting money in your pension tax free? If so I'm not sure why it should come out tax free as well. Seems like a tax advantage to those who could afford to put money away so very different to the WFA.

Making free prescription age line up with SPA seems reasonable.

That's what I was asking unthread. If that's the case it seems fair enough.

I know it's all speculation, but it is still important to understand what motivates possible moves. Failure to understand that can lead to the sort of paranoia that makes people talk about 'attacks on pensioners'.

Sorry, I must have missed your post. Postman came to the door so maybe I skipped a few.

I agree with you that we do need to understand properly what is being proposed, if it is proposed. I don't think the media is always very clear about this and then you hear all the rumours which aren't always very factual.

I wasn't having a go, theworriedwell, I was saying that I agree .

I understand about leaking things to gauge reaction, but nothing has been announced, and even if things like paying for prescriptions came to pass they wouldn't be 'attacks on pensioners' - they would be levelling things up so that pensioners don't get special treatment just for being older. I think that when prescriptions became free at 60 people were comparatively 'older' then - my grandmother seemed like an old lady at 60, when these days 60 year olds are only slightly past their prime.

It can't be right that a young mum with something like asthma has to pay for inhalers and drugs to sort the chest infections that often go with the territory when she is also paying high housing costs, childcare and so on and the 60 year old sitting next to her at work gets them free, despite having a higher salary, a house that is paid for and no dependents. Removing that inequality would not be an 'attack on pensioners' - 60 year olds are not pensioners for another 6 or 7 years (and the 30 year old will have to work for even longer). It would be (if it happens) a removal of an advantage based simply on age - and why not? Nobody is suggesting that actual pensioners pay for prescriptions, are they? Although who knows - if we are expected to believe 'I heard', 'I saw' and 'they say' all the time, pretty much all possibilities will be taken as read.

The main difference between a young couple and retired couple Doodledog is that the young couple can work, change jobs, get promotion, move etc.

The options for many retired people are limited. We have all had the high mortgages, childcare costs, juggling work when we were young, fit and able.

Once retired if one had made what was thought as adequate provision for retirement and along comes a new Government changing the rules there is little scope to earn more money, move etc.

I never understood why if you were still working when you got to pension age, you stopped paying NI. personally I, and my later hubby, would have been very happy to continued paying this until we stopped work.

Most of this is speculation fed by Tory press scaremongering