Not sure whether you're right there. But I'm sure he'll be interested in Peter Daszak's self-justifying "for the record" letter to the Telegraph today.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
Like senior doctors, then?
Astute.
Yes. Osborne introduced the LTA to specifically target large public sector DB schemes, though he didn't of course frame it as such. This was intended to level the playing field - at least a tiny bit - with regard to public versus private sector pension provisions. But this produced the unintended consequence of early public sector retirees.
An alternative to what Hunt has done today would have been to make public sector pension membership opt-outable with a cash alternative.
However, the cash alternative would hit government coffers immediately whereas what Hunt has done is deferred this tax hit by way of even larger pensions to these lucky people years down the road. A kind of accounting trick.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
Yes, I'd noticed that. It seems very sensible, and somewhat compensates for what on the face of it looks like an extravagantly generous change in abolishing the LTA. And, yes, you are probably right that this heralds the gradual reduction of the maximum tax-free sum.
Someone who paid a LTA tax charge recently is going to be mightily pissed-off that they could have delayed until the LTA was abolished.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
Yes, I'd noticed that. It seems very sensible, and somewhat compensates for what on the face of it looks like an extravagantly generous change in abolishing the LTA. And, yes, you are probably right that this heralds the gradual reduction of the maximum tax-free sum.
Someone who paid a LTA tax charge recently is going to be mightily pissed-off that they could have delayed until the LTA was abolished.
Yes. A friend of mine who I had dinner with last night is exactly in that position. Somehow I don't think he is going to get a rebate!
HSBC branch in Loughborough is currently a raging inferno and looks like it might spread to the town hall and Primark. A metaphor for the looming bank meltown, maybe?
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
Politically only of use if it is all spent within 10 miles of MY home.
Even then, the LibDems will have a picture of a pointing councillor taking the credit for filling it!
Will that help?
Much of the issue is due to the too many groups who can dig up roads, and the poor quality of repairs.
It will just spin the merry-go-round a bit faster.
I've got the numbers for Cheshire East:
Actionable potholes identified in last 12 months: 20484. How many repairs are inspected: Dunno - don't collect data. How many repairs were below standard? Dunno - don't collect data. How many repairs fail in one year? Dunno - don't collect data. Does the contractor guarantee quality? We would expect repairs to last 12 months, Does the contractor correct poor work free of charge? Yes (.. and how are they supposed to find out if they don't inspect?)
Sounds as though the contractor will have a business strategy for repairs to last one year and one day.
Like illegal migrants, the system needs fixing, not a stickyplaster.
One of the issues with 'potholes' is that the sorts of repairs a contractor (or the local council) will do will never be able to last more than a year or so. Potholes often (but of course not always) develop where heavy vehicles are turning. The sorts of repairs that are done to 'fix potholes' are insufficient to prevent a re-occurrence almost immediately. What actually needs to happen is that the entire road surface is removed including the lower tarmac sections (roads are generally built of two or three layers of different grades of tarmac based on the stone size) and the whole thing is resurfaced. But this is a much bigger job and of course both more disruptive and more costly.
Yes - it's about fixing the system. One other aspect is proper control of interventions by third parties - eg service providers digging holes in expensive new surfaces put in the previous day.
What also needs to happen is that traffic laws are enforced to prevent, for example, heavy vehicles going down unsuitable roads by blindly following satnavs.
Plus vehicles esp. HGVs parking on pavements smashing up the surface and the tactile paving which exists to help blind people navigate, creating tri[p hazards which put people in hospital. They know the laws are a mess so they don't give a damn. Quite a bit on Leith Walk in Edinburgh at present, but also everywhere.
On our Devon lanes the problem is the modern mega-tractors, that just trash the tarmac road surface as if it were mud. If we get any hot weather and the surface melts, they can just take large chunks out for many yards.
Sounds like remarkably crap road surface. So why is that?
Number of years ago, WA State Dept of Transportation "experimented" with using a new road surfacing material comprised largely of recycled tires. Was NOT a success, for just the reason that you cite re: Devon.
Recycled tyres for road surfaces is a terrible idea. Someone came up with the idea a couple of decades ago and everyone thought 'oo wonderful. A use for all those old tyres'. Then you figure out that road wear from both the car tyres and the road itself generates vast amounts of synthetic rubber micro-particles which get washed into all the water courses.
Hmm, ok, how have you come across Guido output? By accident, I hope?
It's useful to keep an eye on to see what the that section of the right is generally focusing on and what arguments they are making. Same reason to keep an eye on things like Labour list. Even he does occasionally have a point.
WingsOverScotland is mostly more for entertainment, since he's always so angry and sarcastic all the time.
It's not worth reading The Conservative Woman though, trust me - it's where you go if ConHome is too reasonable.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
Like senior doctors, then?
Astute.
The 1995 NHS scheme has a lump sum, the replacement 2015 scheme does not, so the tax free lump sum is not quite as important as it was. Of course any scheme can convert to a lump sum as part of the pension.
I think that I will do well personally from this budget, though may get out soon before Starmer/Reeves shift the rules again.
HSBC branch in Loughborough is currently a raging inferno and looks like it might spread to the town hall and Primark. A metaphor for the looming bank meltown, maybe?
Do they need a fire stopper?
Well, they're not on strike, so I'm sure they'll find enough to not have to call me out of retirement.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
Like senior doctors, then?
Astute.
Yes. Osborne introduced the LTA to specifically target large public sector DB schemes, though he didn't of course frame it as such. This was intended to level the playing field - at least a tiny bit - with regard to public versus private sector pension provisions. But this produced the unintended consequence of early public sector retirees.
An alternative to what Hunt has done today would have been to make public sector pension membership opt-outable with a cash alternative.
However, the cash alternative would hit government coffers immediately whereas what Hunt has done is deferred this tax hit by way of even larger pensions to these lucky people years down the road. A kind of accounting trick.
Brown introduced the LTA in 2006, though it's true that Osborne reduced it (repeatedly).
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
So the solution for taxpayers overpaying on historic public sector pensions is to undercharge tax on the wealthiest 1% of private pensions?
Doesn't sound great for 99% of taxpayers even if more balanced on public v private pensions.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
Like senior doctors, then?
Astute.
Yes. Osborne introduced the LTA to specifically target large public sector DB schemes, though he didn't of course frame it as such. This was intended to level the playing field - at least a tiny bit - with regard to public versus private sector pension provisions. But this produced the unintended consequence of early public sector retirees.
An alternative to what Hunt has done today would have been to make public sector pension membership opt-outable with a cash alternative.
However, the cash alternative would hit government coffers immediately whereas what Hunt has done is deferred this tax hit by way of even larger pensions to these lucky people years down the road. A kind of accounting trick.
Brown introduced the LTA in 2006, though it's true that Osborne reduced it (repeatedly).
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
It was £1.5m when it came in.
Yes, then went to 1.8M. From Gov website:
"The LTA was set at £1.5m when introduced, but it increased incrementally to £1.8m by 2011/12. The LTA was then reduced in 2012, 2014, and 2016. When frozen in 2016, there was a provision for the LTA to have a CPI-based increase after 2017 to 2018; however, this was switched off in 2021. The current standard LTA, therefore, remains at £1,073,100."
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
Like senior doctors, then?
Astute.
Yes. Osborne introduced the LTA to specifically target large public sector DB schemes, though he didn't of course frame it as such. This was intended to level the playing field - at least a tiny bit - with regard to public versus private sector pension provisions. But this produced the unintended consequence of early public sector retirees.
An alternative to what Hunt has done today would have been to make public sector pension membership opt-outable with a cash alternative.
However, the cash alternative would hit government coffers immediately whereas what Hunt has done is deferred this tax hit by way of even larger pensions to these lucky people years down the road. A kind of accounting trick.
Brown introduced the LTA in 2006, though it's true that Osborne reduced it (repeatedly).
Apologies - faulty memory - you are correct.
To be fair it's hard to keep up. No area of tax policy needs long term consistency as much as pensions does, and no area has had less of it under the Tories.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
So the solution for taxpayers overpaying on historic public sector pensions is to undercharge tax on the wealthiest 1% of private pensions?
Doesn't sound great for 99% of taxpayers even if more balanced on public v private pensions.
They are not undercharging tax as much as you think due to Hunt's limit on tax free cash. Personally, I think public sector pensions are out-of-the-park generous and I believe most would agree with me if only they knew.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
So the solution for taxpayers overpaying on historic public sector pensions is to undercharge tax on the wealthiest 1% of private pensions?
Doesn't sound great for 99% of taxpayers even if more balanced on public v private pensions.
Abolition of the LTA benefits both public sector and private sector pensions. You have to be careful about use of the term "private" in pensions, you might mean private vs state pension or you might mean private sector vs public sector.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
So the solution for taxpayers overpaying on historic public sector pensions is to undercharge tax on the wealthiest 1% of private pensions?
Doesn't sound great for 99% of taxpayers even if more balanced on public v private pensions.
They are not undercharging tax as much as you think due to Hunt's limit on tax free cash. Personally, I think public sector pensions are out-of-the-park generous and I believe most would agree with me if only they knew.
Sure public sector pensions are too generous, especially historically including current workers on older schemes, but there is not really any justifiable taxpayer interest in evening things out between public and private sector elites.
People with a £1m+ pension pot don't really need any tax free cash lump sums, let alone more than £268k.
IFS notices that the budget has actually made the £100,000 tax trap that Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
IFS notices that the budget has actually made the £100,000 tax trap that Casino and other have mentioned much worse:
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
The OBR has changed its forecast for the current year deficit yet again. It was £99bn in the March forecast, £177 bn in the November forecast and now £152bn. I said in March they were too low and in November a bit high. They must be closer to getting it right now there are only a couple of weeks to the year end they are forecasting. Their estimate for next year of £131.6bn may be optimistic as they are forecasting slow growth and may be overestimating the revenue they can collect with some higher rates. They underestimated the Corporation tax revenue this year when it stayed at a lower rate.
They anticipate inflation collapsing to zero by 2025 for no obviously good reason. That seems unlikely, unless we do get an unforeseen recession. They now anticipate a much lower rise in unemployment this year and next than in the previous forecast. They now expect the UK to avoid recession this year after forecasting a down year at minus 1.4% in November, Their frequent changes of forecast, their failure to detect major changes of trend and their models which seem to underestimate the impact of changing tax rates on behaviour make these forecasts difficult to rely on. https://johnredwoodsdiary.com/2023/03/15/budget/
Do they ever get anything right? What is the point of a Chancellor getting them to make a forecast before anything? May as well read their horoscope instead.
It’s almost as if retail banks have no business being in investment banking
I really do wish RBS and HBOS had been liquidated back in 2008, the government should have bailed out depositors but everyone else involved with those two banks should have been burned. The moral hazard and expectation bailing them out created has been a pox on the country and the wider world.
I honestly think they should have let the whole thing collapse in 2008. Yes there would have been mass unemployment for a while but the advantages. 1. The bankers would have truly learned their lesson and we would not have the issues we have now. 2. Property prices would have returned to sanity and young people would have been better off. 3. The privileged top 3 to 5% would have taken deserved losses and this would have increased the sense of fairness in society and reduced inequality. 4. We would now likely have a much more dynamic economy based on the respect of risk.
So, are you proposing that depositors outside the protection scheme - i.e. all corporates - were not protected?
OK. Royal Bank of Scotland sees a run on deposits. They are forced to close. Companies are unable to make payroll, because they have no access to their deposits because the bank is being wound up.
Depositors at HSBC, Lloyds, etc. see the writing on the wall, and then try and withdraw all their deposits too, because they see what's happened at RBS.
Everybody tries to withdraw all their money. Which bank, no matter how well capitalized, can survive even 20% of their depositors heading for the exit all at once. That's the nature of banking: you borrow short (deposits) and you lend long (mortgages).
Are you planning on never stepping in in this scenario? I.e. every bank goes bust. Or are you planning on stepping in at some point to stop contagion.
Are you going to protect all deposits, therefore creating moral hazard? Or just some fraction, which encourages bank runs if there is even the slightest concern that a bank might be insolvent or if there is even a fear that other people might think it could be insolvent. As the costs of withdrawing money are zero, the incentive is always to do so.
And the resolution companies that are setup to recover mortgage debt after the dissolution of the banking system, are they going to foreclose on millions of homes simulateneously?
Basically, at some point the Government and the BoE step in. There is no "oh, let it all collapse" option. The only question is when you do so.
You step in to save the depositors while letting the rest collapse. Bond holders, share holders etc get wiped out - that's the lack of moral hazard, but depositors don't run.
That's what the Icelandic Government did and it worked.
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
Yes, I'd noticed that. It seems very sensible, and somewhat compensates for what on the face of it looks like an extravagantly generous change in abolishing the LTA. And, yes, you are probably right that this heralds the gradual reduction of the maximum tax-free sum.
Someone who paid a LTA tax charge recently is going to be mightily pissed-off that they could have delayed until the LTA was abolished.
Yes. A friend of mine who I had dinner with last night is exactly in that position. Somehow I don't think he is going to get a rebate!
Same as all of the parents of 1 year olds who's kids won't be eligible until after they turn 3!
It’s almost as if retail banks have no business being in investment banking
I really do wish RBS and HBOS had been liquidated back in 2008, the government should have bailed out depositors but everyone else involved with those two banks should have been burned. The moral hazard and expectation bailing them out created has been a pox on the country and the wider world.
I honestly think they should have let the whole thing collapse in 2008. Yes there would have been mass unemployment for a while but the advantages. 1. The bankers would have truly learned their lesson and we would not have the issues we have now. 2. Property prices would have returned to sanity and young people would have been better off. 3. The privileged top 3 to 5% would have taken deserved losses and this would have increased the sense of fairness in society and reduced inequality. 4. We would now likely have a much more dynamic economy based on the respect of risk.
So, are you proposing that depositors outside the protection scheme - i.e. all corporates - were not protected?
OK. Royal Bank of Scotland sees a run on deposits. They are forced to close. Companies are unable to make payroll, because they have no access to their deposits because the bank is being wound up.
Depositors at HSBC, Lloyds, etc. see the writing on the wall, and then try and withdraw all their deposits too, because they see what's happened at RBS.
Everybody tries to withdraw all their money. Which bank, no matter how well capitalized, can survive even 20% of their depositors heading for the exit all at once. That's the nature of banking: you borrow short (deposits) and you lend long (mortgages).
Are you planning on never stepping in in this scenario? I.e. every bank goes bust. Or are you planning on stepping in at some point to stop contagion.
Are you going to protect all deposits, therefore creating moral hazard? Or just some fraction, which encourages bank runs if there is even the slightest concern that a bank might be insolvent or if there is even a fear that other people might think it could be insolvent. As the costs of withdrawing money are zero, the incentive is always to do so.
And the resolution companies that are setup to recover mortgage debt after the dissolution of the banking system, are they going to foreclose on millions of homes simulateneously?
Basically, at some point the Government and the BoE step in. There is no "oh, let it all collapse" option. The only question is when you do so.
You step in to save the depositors while letting the rest collapse. Bond holders, share holders etc get wiped out - that's the lack of moral hazard, but depositors don't run.
That's what the Icelandic Government did and it worked.
Iceland did not play a systemic role in the global financial system.
Cross country now! A spin on a steeplechase from 200 years ago!
“So as we move away from the Jolly Rancher, Mywifeknowseverything as we approach the Duck Pond… Slack Sally has gone down there at the Kissing Gate…as we make our way on to Mrs Miggins Flower Garden, Sotallytober from The Geespot” 🤭
Oh. Nice finish.
But cheese knockers. Why didn’t I invent a fence called cheese knockers.
If it's on a country footpath, then the Kissing Gate is probably illegal under the Equality Act 2010 .
Here's some budget small-print - apologies if we've already done this.
Hunt has limited pension TFC. This paves the way for future reductions in this limit (or freezes of this limit, amounting to the same thing).
Below is from BBC website:
"The lifetime allowance will be abolished from April 2024, but hidden in the Budget documents was the fact that the amount of tax-free cash has been limited to £268,275. If you’ve already taken that much out of a pension pot as a lump sum, then it looks like you will be limited to that, unless you had existing rights to higher tax-free amounts."
As this affect DC pension plan values, this measure is even more skewed to favour high-earning public sector DB members.
To expand on the above post.
This means that individuals with a DC pension pot which is already at, close to or over the old LTA can now not worry about this and pay more cash into their pension plans within the annual allowance. However, any value over the old LTA limit of £1,073,000 will not benefit from 25% tax free cash entitlement - and so a key incentive to pay more into their pensions is taken away.
Life really is tough for millionaire pensioners when the tax free cash you get has been limited to £268k plus annual personal allowances.
Well yes, but there never used to be a limit at all and when the LTA came in it was 1.8m (implying £450k TFC) and the LTA is now 25% of the vastly reduced LTA of 1.073M. This will disproportionally affect DC schemes.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
So the solution for taxpayers overpaying on historic public sector pensions is to undercharge tax on the wealthiest 1% of private pensions?
Doesn't sound great for 99% of taxpayers even if more balanced on public v private pensions.
They are not undercharging tax as much as you think due to Hunt's limit on tax free cash. Personally, I think public sector pensions are out-of-the-park generous and I believe most would agree with me if only they knew.
I can think of three or four million who wouldn’t agree.
Cross country now! A spin on a steeplechase from 200 years ago!
“So as we move away from the Jolly Rancher, Mywifeknowseverything as we approach the Duck Pond… Slack Sally has gone down there at the Kissing Gate…as we make our way on to Mrs Miggins Flower Garden, Sotallytober from The Geespot” 🤭
Oh. Nice finish.
But cheese knockers. Why didn’t I invent a fence called cheese knockers.
If it's on a country footpath, then the Kissing Gate is probably illegal under the Equality Act 2010 .
Your no fun. 😆
I've been doing a small audit exercise on flat local paths and trails where wheelchairs and similar have been blocked from accessing for a generation or more. It is not inspiring.
I have refrained from tedious about your missing apostrophe .
Cross country now! A spin on a steeplechase from 200 years ago!
“So as we move away from the Jolly Rancher, Mywifeknowseverything as we approach the Duck Pond… Slack Sally has gone down there at the Kissing Gate…as we make our way on to Mrs Miggins Flower Garden, Sotallytober from The Geespot” 🤭
Oh. Nice finish.
But cheese knockers. Why didn’t I invent a fence called cheese knockers.
If it's on a country footpath, then the Kissing Gate is probably illegal under the Equality Act 2010 .
Your no fun. 😆
I've been doing a small audit exercise on flat local paths and trails where wheelchairs and similar have been blocked from accessing for a generation or more. It is not inspiring.
I have refrained from tedious about your missing apostrophe .
Rubbish, people don't want President Johnson or President Blair.
William and Kate are also popular across the generations and Charles is popular enough with his generation and the middle aged for as long as he reigns
Comments
An alternative to what Hunt has done today would have been to make public sector pension membership opt-outable with a cash alternative.
However, the cash alternative would hit government coffers immediately whereas what Hunt has done is deferred this tax hit by way of even larger pensions to these lucky people years down the road. A kind of accounting trick.
I think the point is that this measure today is a further kick in the teeth to those who think that public sector pension provisions are obscenely generous - a fact that Joe Public really has not twigged.
WingsOverScotland is mostly more for entertainment, since he's always so angry and sarcastic all the time.
It's not worth reading The Conservative Woman though, trust me - it's where you go if ConHome is too reasonable.
I think that I will do well personally from this budget, though may get out soon before Starmer/Reeves shift the rules again.
https://vf.politicalbetting.com/discussion/11233/hopefully-we-ll-see-some-lineker-polling-this-weekend-politicalbetting-com/p7#Comment_4334045
As I pointed out, it is near 15 years from the last crash, and financiers have the memory of a demented goldfish.
https://vf.politicalbetting.com/discussion/11232/has-labour-caught-up-with-the-snp-in-scottish-general-election-polling-politicalbetting-com/p5#Comment_4332483
Doesn't sound great for 99% of taxpayers even if more balanced on public v private pensions.
The Brexit fraud continues !
"The LTA was set at £1.5m when introduced, but it increased incrementally to £1.8m by 2011/12. The LTA was then reduced in 2012, 2014, and 2016. When frozen in 2016, there was a provision for the LTA to have a CPI-based increase after 2017 to 2018; however, this was switched off in 2021. The current standard LTA, therefore, remains at £1,073,100."
Been a bit of a political football.
People with a £1m+ pension pot don't really need any tax free cash lump sums, let alone more than £268k.
The Institute for Fiscal Studies says the childcare proposals announced today will create “one of the most severe distortions you are ever likely to see within a tax and benefit system”...
A parent with a 1 year-old and a 3-year old whose childcare provider charges England’s average hourly rate for 40 hours per week would, after these reforms, find that their disposable income (i.e. earnings net of tax and childcare outgoings) falls by £14,500 if their pre-tax pay crosses £100,000. Disposable income would not recover its previous level until pre-tax pay reached £134,500, meaning a parent earning £130,000 would be worse off than one earning £99,000.
For those with higher childcare costs the distortions are even more absurd. A similar parent paying average London rates for childcare, using 50 hours per week, would see a £20,000 fall in disposable income when their pre-tax earnings cross £100,000. Disposable income would not recover its previous level until pre-tax pay reached £144,500.
The OBR has changed its forecast for the current year deficit yet again. It was £99bn in the March forecast, £177 bn in the November forecast and now £152bn. I said in March they were too low and in November a bit high. They must be closer to getting it right now there are only a couple of weeks to the year end they are forecasting. Their estimate for next year of £131.6bn may be optimistic as they are forecasting slow growth and may be overestimating the revenue they can collect with some higher rates. They underestimated the Corporation tax revenue this year when it stayed at a lower rate.
They anticipate inflation collapsing to zero by 2025 for no obviously good reason. That seems unlikely, unless we do get an unforeseen recession. They now anticipate a much lower rise in unemployment this year and next than in the previous forecast. They now expect the UK to avoid recession this year after forecasting a down year at minus 1.4% in November, Their frequent changes of forecast, their failure to detect major changes of trend and their models which seem to underestimate the impact of changing tax rates on behaviour make these forecasts difficult to rely on.
https://johnredwoodsdiary.com/2023/03/15/budget/
Do they ever get anything right? What is the point of a Chancellor getting them to make a forecast before anything? May as well read their horoscope instead.
That's what the Icelandic Government did and it worked.
And smoke 'em if you got 'em.
I have refrained from tedious about your missing apostrophe
William and Kate are also popular across the generations and Charles is popular enough with his generation and the middle aged for as long as he reigns