UK Pensions

Prakhonchai Nick said:
Never going to happen. The poorest people, who rely solely on the state pension would not benefit at all They don't pay any tax now!
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I agree but it shouldn't just be considered to help the poorest

Isn't it unfair for those who bothered to fund private pensions/investments for the future to have to pay tax on private pensions/investments made with already taxed income?
 
CharlesLittle said:
I agree but it shouldn't just be considered to help the poorest

Isn't it unfair for those who bothered to fund private pensions/investments for the future to have to pay tax on private pensions/investments made with already taxed income?
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Those who fund private pensions in the UK have their basic rate of income tax paid into their pension fund, and can also reclaim the difference between it and the 40% higher rate. The income that is paid into their pensions is therefore not taxed. On retirement, (or on achieving retirement age) 25% of the pension fund's value can normally be taken as a tax-free lump sum, while the balance can be taken as tax-free income subject to personal tax allowances.

There are also other areas of investment where the gain is not taxed up to a certain level: for example, for stocks and shares ISAs or cash ISA tax free investments, the tax-free allowance is £20,000. In addition, the Lifetime ISA is a longer-term tax-free savings account that will let you save up to £4,000 per year and get a government bonus of 25% (up to £1,000). As with other ISAs, you won’t pay tax on any interest, income or capital gains from cash or investments held within a Lifetime ISA.

If that's not enough, Junior ISAs are available to any child under 18 living in the UK who doesn’t qualify for a Child Trust Fund.
Family and friends can put up to £9,000 into the account on behalf of the child in the 2023/24 tax year. There’s no Income Tax or Capital Gains Tax to pay on the interest or investment gains.
 
Merlin said:
Those who fund private pensions in the UK have their basic rate of income tax paid into their pension fund, and can also reclaim the difference between it and the 40% higher rate. The income that is paid into their pensions is therefore not taxed. On retirement, (or on achieving retirement age) 25% of the pension fund's value can normally be taken as a tax-free lump sum, while the balance can be taken as tax-free income subject to personal tax allowances.

There are also other areas of investment where the gain is not taxed up to a certain level: for example, for stocks and shares ISAs or cash ISA tax free investments, the tax-free allowance is £20,000. In addition, the Lifetime ISA is a longer-term tax-free savings account that will let you save up to £4,000 per year and get a government bonus of 25% (up to £1,000). As with other ISAs, you won’t pay tax on any interest, income or capital gains from cash or investments held within a Lifetime ISA.

If that's not enough, Junior ISAs are available to any child under 18 living in the UK who doesn’t qualify for a Child Trust Fund.
Family and friends can put up to £9,000 into the account on behalf of the child in the 2023/24 tax year. There’s no Income Tax or Capital Gains Tax to pay on the interest or investment gains.
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You've missed the point. Maybe I did not make myself clear.

Those living solely on a government pension are unlikely to reach the tax threshold.

Those with private pensions will. Therefore they will pay tax, despite having paid tax all their working life.

They are being penalised for planning ahead.
 
CharlesLittle said:
You've missed the point. Maybe I did not make myself clear.

Those living solely on a government pension are unlikely to reach the tax threshold.

Those with private pensions will. Therefore they will pay tax, despite having paid tax all their working life.

They are being penalised for planning ahead.
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In other words.
Damned if you do and damned if you don't.
 
CharlesLittle said:
You've missed the point. Maybe I did not make myself clear.

Those living solely on a government pension are unlikely to reach the tax threshold.

Those with private pensions will. Therefore they will pay tax, despite having paid tax all their working life.

They are being penalised for planning ahead.
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The point I made is that we receive back the income tax deducted from pension contributions, so we are NOT paying for the pensions using tax already deducted from our incomes AND then paying tax on the pension income when that is received.
 
CO-CO said:
Everything, I would say.

Many expats in Thailand are here because they cannot afford the cost of living in their home country.
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Do you think so?

Most expats I've met arrived in Thailand before state pension age. Living off their personal wealth. Investments, private pensions, rent from properties in their own countries.

I'd never really considered people living here on govt pension alone. I'd have thought immigration rules would be an issue, for those from UK anyway.
 
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