WEBVTT 00:00:00.750 --> 00:00:03.770 I'm starting to get worried about pensions in 00:00:03.770 --> 00:00:07.349 the October 2025 budget. If you think back to 00:00:07.349 --> 00:00:10.789 October 2024, there was a lot of talk about the 00:00:10.789 --> 00:00:14.410 potential for Rachel Reeve to limit tax relief 00:00:14.410 --> 00:00:17.370 for people earning the higher rate of tax and 00:00:17.370 --> 00:00:20.210 paying into pensions. And that was just one of 00:00:20.210 --> 00:00:23.710 the many concerns, with some people saying the 00:00:23.710 --> 00:00:26.170 triple lock was under threat and others talking 00:00:26.170 --> 00:00:28.469 about the mean test in the state pension, that 00:00:28.469 --> 00:00:30.480 kind of thing. I'd love to know what you think 00:00:30.480 --> 00:00:33.280 is going to happen. Now, the reason I'm getting 00:00:33.280 --> 00:00:38.159 nervous is because of how hair options have reduced 00:00:38.159 --> 00:00:43.560 significantly. So if we split people into four 00:00:43.560 --> 00:00:51.500 groups, there are people who receive wages, salaries. 00:00:52.439 --> 00:01:01.090 There are people who receive benefits. And there 00:01:01.090 --> 00:01:05.890 are people who receive pensions. I'll talk about 00:01:05.890 --> 00:01:10.829 the fourth group in a moment. Okay, so let's 00:01:10.829 --> 00:01:13.189 have a look at these individually. So when we 00:01:13.189 --> 00:01:18.670 were worried about our pensions in October, 2024, 00:01:20.849 --> 00:01:23.969 we were looking at what Rachel Reeves had as 00:01:23.969 --> 00:01:28.400 options for filling that. holes in the budget 00:01:28.400 --> 00:01:31.299 really and getting some more revenue into government. 00:01:32.239 --> 00:01:35.819 And we knew that there was a very strong promise 00:01:35.819 --> 00:01:40.340 of the election that the Labour Party would be 00:01:40.340 --> 00:01:43.340 in favour of the working people and that they 00:01:43.340 --> 00:01:48.400 would not raise taxes on working people. And 00:01:48.400 --> 00:01:52.000 that's remained something that they are quite 00:01:52.000 --> 00:01:56.670 strong on in their comms. And I believe it will 00:01:56.670 --> 00:01:59.629 be difficult for them to break that promise personally. 00:02:00.569 --> 00:02:02.530 Now, what are we talking here? So we're talking, 00:02:02.530 --> 00:02:11.270 you know, income tax and NI. So what will happen, 00:02:11.430 --> 00:02:18.610 100 % will happen, I believe, is that the amounts 00:02:18.610 --> 00:02:21.870 where we start paying tax, where we start paying 00:02:21.870 --> 00:02:23.710 standard rate tax and start paying higher tax 00:02:23.710 --> 00:02:27.300 will be frozen. So then tax allowances will be 00:02:27.300 --> 00:02:32.580 frozen. And that means because the price of that 00:02:32.580 --> 00:02:35.500 has gone up, most of our wages have gone up. 00:02:35.939 --> 00:02:39.280 Therefore, if the tax rate, the tax allowance 00:02:39.280 --> 00:02:42.020 stays the same, we effectively all pay more tax. 00:02:42.460 --> 00:02:45.759 So it's kind of a way of raising taxes by stealth, 00:02:46.060 --> 00:02:48.419 but it's not the same as saying let's change 00:02:48.419 --> 00:02:52.180 the 20 % tax rate to the 22 % tax rate. That 00:02:52.180 --> 00:02:57.370 is much more... newsworthy item and will definitely 00:02:57.370 --> 00:03:02.009 go against their promises to not increase taxes 00:03:02.009 --> 00:03:06.710 on working people. Okay, so if we strike that 00:03:06.710 --> 00:03:09.430 one through for me as being one where they won't 00:03:09.430 --> 00:03:13.530 be able to do much in terms of changing how much 00:03:13.530 --> 00:03:16.090 revenue they get from that area, let's look at 00:03:16.090 --> 00:03:19.389 benefits then. So I think back in October 24 00:03:19.389 --> 00:03:22.009 when Rachel used to the budget, she had a plan. 00:03:22.139 --> 00:03:26.620 And that was the fact that they'd seen personal 00:03:26.620 --> 00:03:31.539 independence payments had risen astronomically 00:03:31.539 --> 00:03:38.539 since the pandemic. And therefore they thought 00:03:38.539 --> 00:03:41.960 this is an area they could tinker with. So they 00:03:41.960 --> 00:03:44.340 will change the rules around receiving personal 00:03:44.340 --> 00:03:50.120 independence payments. and significantly reduced 00:03:50.120 --> 00:03:52.479 the amount the government needs to pay out. So 00:03:52.479 --> 00:03:54.759 that was the plan all along, I think. But what 00:03:54.759 --> 00:03:58.860 happened is, they obviously had a back bench 00:03:58.860 --> 00:04:04.479 revolt, which meant that Rachel's plans for Pestland 00:04:04.479 --> 00:04:07.020 pens pains didn't go through in the way that 00:04:07.020 --> 00:04:12.699 she wanted them to. We now have the same big 00:04:12.699 --> 00:04:15.400 hole in the budget and we weren't able to fix 00:04:15.400 --> 00:04:21.160 that with benefits. Okay. So that means we have 00:04:21.160 --> 00:04:24.420 pensions left and that's why I think this year 00:04:24.420 --> 00:04:27.980 in particular, I'm really nervous about what's 00:04:27.980 --> 00:04:31.120 going to happen around pensions, pensioners and 00:04:31.120 --> 00:04:33.660 tax related to pensions as well. Now it didn't 00:04:33.660 --> 00:04:35.839 say there was four categories. I'm going to draw 00:04:35.839 --> 00:04:38.259 these up here because they're not interrelated. 00:04:38.740 --> 00:04:40.540 If you look at all these, they all overlap, don't 00:04:40.540 --> 00:04:42.459 they? We have people who earn wages and receive 00:04:42.459 --> 00:04:45.399 benefits. We have people who receive benefits 00:04:45.399 --> 00:04:47.959 and pensions, which is the state pension, and 00:04:47.959 --> 00:04:51.139 we have pensions and people who work part time 00:04:51.139 --> 00:04:56.639 as well. Okay, but this group up here don't really 00:04:56.639 --> 00:04:59.660 overlink with any of these. Okay, and these are 00:04:59.660 --> 00:05:01.879 the people who derive their income from assets. 00:05:03.500 --> 00:05:07.519 Or another way to describe these are non -working, 00:05:08.220 --> 00:05:11.500 super rich. So these are non -working super rich 00:05:11.500 --> 00:05:14.259 and they derive their income from assets. So 00:05:14.259 --> 00:05:16.939 what do we mean by that? I mean, they own masses 00:05:16.939 --> 00:05:19.420 of land, they own lots and lots of different 00:05:19.420 --> 00:05:23.879 businesses, they own lots and lots of debt. And 00:05:23.879 --> 00:05:29.000 that could be our debt, or it could be company's 00:05:29.000 --> 00:05:33.639 debts, or it could be even country's debts. So 00:05:33.639 --> 00:05:36.699 when a government issues a bond, these people 00:05:36.699 --> 00:05:39.100 buy these bonds up and derive lots and lots of 00:05:39.100 --> 00:05:41.620 revenue from them. Okay, so these are the super 00:05:41.620 --> 00:05:43.500 -it's that don't work and they own the assets. 00:05:43.920 --> 00:05:47.660 Now, I think these are the untouchables personally. 00:05:48.540 --> 00:05:50.259 I'm not saying that I approve of that. I'm just 00:05:50.259 --> 00:05:51.860 saying that I do think there are untouchables. 00:05:51.959 --> 00:05:56.540 And the reason I think that is the way political 00:05:56.540 --> 00:06:01.069 parties work in my opinion is that to influence 00:06:01.069 --> 00:06:03.310 policy, which is what they want to do. They need 00:06:03.310 --> 00:06:05.670 to be in power. To get into power, they need 00:06:05.670 --> 00:06:09.670 to win elections. To win elections, they need 00:06:09.670 --> 00:06:13.610 significant budgets to be able to promote their 00:06:13.610 --> 00:06:18.069 policies and communicate to the public. And the 00:06:18.069 --> 00:06:19.129 only way that they're going to get the money 00:06:19.129 --> 00:06:22.790 to do that is from the super rich. So these make 00:06:22.790 --> 00:06:27.269 massive political donations to political parties 00:06:27.269 --> 00:06:31.620 and any government that really tried to attack 00:06:31.620 --> 00:06:36.139 this group by taking more money out of their 00:06:36.139 --> 00:06:40.079 earnings. They would quickly find in the next 00:06:40.079 --> 00:06:42.819 election that all these political donations would 00:06:42.819 --> 00:06:46.560 go to another party and they would lose power 00:06:46.560 --> 00:06:50.540 pretty rapidly. So these remain fairly untouchable 00:06:50.540 --> 00:06:52.680 in my opinion. I'd love to know what you guys 00:06:52.680 --> 00:06:57.819 think. So back to pensions. Where do we think 00:06:57.819 --> 00:07:03.970 pensions could potentially get hit. So let's 00:07:03.970 --> 00:07:06.589 have a look at what some of these particular 00:07:06.589 --> 00:07:09.069 options and threats that I'm talking about might 00:07:09.069 --> 00:07:12.129 be. I'm not going to go through every single 00:07:12.129 --> 00:07:15.129 one, just some of the ones that I've read more 00:07:15.129 --> 00:07:18.589 about recently. So if we list them out first, 00:07:18.750 --> 00:07:25.829 we've got pension commencements, lump sum, we've 00:07:25.829 --> 00:07:37.160 got tax free allowances, we have triple and we've 00:07:37.160 --> 00:07:41.000 also got means testing. So let me talk about 00:07:41.000 --> 00:07:44.899 each one of these briefly and see what you guys 00:07:44.899 --> 00:07:48.040 think. Okay, so the pension commencement lump 00:07:48.040 --> 00:07:54.240 sum. So each time I take an amount out of my 00:07:54.240 --> 00:07:56.459 pension savings that I've saved for all my life, 00:07:56.720 --> 00:08:02.560 25 % of that comes tax -free at the moment, which 00:08:02.560 --> 00:08:09.579 is great for me. It's fantastic. Now, what the 00:08:09.579 --> 00:08:11.720 options are for governments here is that they 00:08:11.720 --> 00:08:14.319 could remove this completely. They could say, 00:08:14.399 --> 00:08:16.639 there's no such thing as a pension commencement 00:08:16.639 --> 00:08:20.000 lump sum tax -free amount. You are just going 00:08:20.000 --> 00:08:27.300 to pay tax on all your pensions. They could obviously 00:08:27.300 --> 00:08:32.200 cap it to say you will only get tax on the first 00:08:32.200 --> 00:08:36.500 X amount of that. They might change the rate 00:08:36.500 --> 00:08:42.600 from 20 % down to 10%. So they've got some options 00:08:42.600 --> 00:08:48.100 there and each of them could significantly increase 00:08:48.100 --> 00:08:51.620 the taxes that are going into the treasury. What 00:08:51.620 --> 00:08:56.409 about tax free allowances? So say I'm a Working 00:08:56.409 --> 00:09:01.909 40 % tax rate payer, the amount I pay into my 00:09:01.909 --> 00:09:07.090 pension will be effectively tax free at the point 00:09:07.090 --> 00:09:13.490 that I pay in. Now, this amount here is fairly 00:09:13.490 --> 00:09:15.990 significant, as you can see, 40 % of your salary. 00:09:16.490 --> 00:09:19.470 So when you're a higher rate taxpayer and you're 00:09:19.470 --> 00:09:23.789 paying 40%, when you then come to claim your 00:09:23.789 --> 00:09:26.250 pension, you're probably claiming that at more 00:09:26.250 --> 00:09:29.889 like 20%. Therefore you've made a significant 00:09:29.889 --> 00:09:34.049 benefit in tax. Now this could be reduced if 00:09:34.049 --> 00:09:36.950 they, if the government decided say to change 00:09:36.950 --> 00:09:40.769 this 40 % tax rate to what's commonly talked 00:09:40.769 --> 00:09:46.509 about is 25%, then that would raise significant 00:09:46.509 --> 00:09:51.399 funds for the government because There'd be less 00:09:51.399 --> 00:09:54.720 amount tax saved. Of course it would discourage 00:09:54.720 --> 00:09:58.460 people from saving larger amounts into the pensions. 00:09:58.879 --> 00:10:01.480 For those who were on a 20 % tax rate, however, 00:10:02.200 --> 00:10:04.399 it would actually improve their position because 00:10:04.399 --> 00:10:08.120 the talk is that this would be a fixed 25 % tax 00:10:08.120 --> 00:10:11.019 rate, whether you're a 20 % or a 40 % tax rate 00:10:11.019 --> 00:10:14.159 payer. Lots of complexities here around doing 00:10:14.159 --> 00:10:15.980 this, but that's another one that's often talked 00:10:15.980 --> 00:10:19.100 about. Now the triple lock. The triple lock says 00:10:19.100 --> 00:10:24.759 that your state pension will go up either by 00:10:24.759 --> 00:10:30.500 one of these things, either inflation or it will 00:10:30.500 --> 00:10:36.159 go up 2 .5 % or it will go up by average wages. 00:10:37.360 --> 00:10:39.440 And the good thing about triple lock, it's the 00:10:39.440 --> 00:10:42.740 higher of these three, which means generally 00:10:44.409 --> 00:10:49.190 pensioners are always moving slightly ahead because 00:10:49.190 --> 00:10:51.570 it's the large of these two. So if you have a 00:10:51.570 --> 00:10:55.549 real poor average wages year, then you know, 00:10:56.909 --> 00:10:58.330 the triple lock won't be impacted because it'll 00:10:58.330 --> 00:11:00.509 go up by one of the high or the higher amounts. 00:11:00.970 --> 00:11:03.190 So that's one potential for them to do. Triple 00:11:03.190 --> 00:11:05.850 lock is pretty difficult to play with because 00:11:05.850 --> 00:11:07.789 it's been a promise that's been around a long 00:11:07.789 --> 00:11:10.070 time. I'd like to know what you think. And the 00:11:10.070 --> 00:11:12.870 last one is means testing. So at the moment, 00:11:13.289 --> 00:11:17.590 Um, if you are a multimillionaire pensioner, 00:11:18.230 --> 00:11:22.350 uh, I'd say you get a private pension of let's 00:11:22.350 --> 00:11:28.269 say 6 million pound per year. Uh, you will also 00:11:28.269 --> 00:11:33.809 from the government, uh, receive kind of 11 ,500, 00:11:33.990 --> 00:11:36.250 not sure what the exact amount is right at the 00:11:36.250 --> 00:11:39.750 moment, uh, from the government as well as your 00:11:39.750 --> 00:11:43.019 6 million pound a year. And some people say that 00:11:43.019 --> 00:11:48.539 what the government will do is cap this, say 00:11:48.539 --> 00:11:51.840 that if you earn over X amount, you will no longer 00:11:51.840 --> 00:11:54.899 be entitled to a state pension. Now, when I've 00:11:54.899 --> 00:11:59.639 done votes on this on YouTube, people have tend 00:11:59.639 --> 00:12:03.980 to said people who earn over a hundred thousand 00:12:03.980 --> 00:12:07.769 pound a year from a private pension. potentially 00:12:07.769 --> 00:12:10.649 should be impacted by this, anyone less than 00:12:10.649 --> 00:12:13.169 it should be impacted or not impacted. That's 00:12:13.169 --> 00:12:15.330 where the kind of doting is at. But at the moment 00:12:15.330 --> 00:12:17.769 it's, you know, there's no cap on that and everyone 00:12:17.769 --> 00:12:20.769 is entailed to it. So that's potentially somewhere 00:12:20.769 --> 00:12:22.629 where they bring it in. Now, if they did bring 00:12:22.629 --> 00:12:27.929 that in at say 30 ,000 pound, then that would 00:12:27.929 --> 00:12:31.169 have a massive impact on a lot of people who 00:12:31.169 --> 00:12:33.750 were receiving 30 pounds, topping it up with 00:12:33.750 --> 00:12:38.169 their 11 ,500. and, you know, coming out with 00:12:38.169 --> 00:12:41.629 a reasonable amount for them and their family 00:12:41.629 --> 00:12:46.730 to live on. If it's £100 ,000 then the £11 ,000 00:12:46.730 --> 00:12:50.070 obviously doesn't mean quite as much. So I don't 00:12:50.070 --> 00:12:52.309 know what you guys think about it, but there's 00:12:52.309 --> 00:12:56.629 options there. If we go back to this page, that's 00:12:56.629 --> 00:13:00.269 what worries me. That's out of play. That's potentially 00:13:00.269 --> 00:13:02.990 out of play. That's now out of play because of 00:13:02.990 --> 00:13:06.559 the back benches. Doesn't leave much else. Let 00:13:06.559 --> 00:13:07.200 me know what you think.