I'm starting to get worried about pensions in
the October 2025 budget. If you think back to
October 2024, there was a lot of talk about the
potential for Rachel Reeve to limit tax relief
for people earning the higher rate of tax and
paying into pensions. And that was just one of
the many concerns, with some people saying the
triple lock was under threat and others talking
about the mean test in the state pension, that
kind of thing. I'd love to know what you think
is going to happen. Now, the reason I'm getting
nervous is because of how hair options have reduced
significantly. So if we split people into four
groups, there are people who receive wages, salaries.
There are people who receive benefits. And there
are people who receive pensions. I'll talk about
the fourth group in a moment. Okay, so let's
have a look at these individually. So when we
were worried about our pensions in October, 2024,
we were looking at what Rachel Reeves had as
options for filling that. holes in the budget
really and getting some more revenue into government.
And we knew that there was a very strong promise
of the election that the Labour Party would be
in favour of the working people and that they
would not raise taxes on working people. And
that's remained something that they are quite
strong on in their comms. And I believe it will
be difficult for them to break that promise personally.
Now, what are we talking here? So we're talking,
you know, income tax and NI. So what will happen,
100 % will happen, I believe, is that the amounts
where we start paying tax, where we start paying
standard rate tax and start paying higher tax
will be frozen. So then tax allowances will be
frozen. And that means because the price of that
has gone up, most of our wages have gone up.
Therefore, if the tax rate, the tax allowance
stays the same, we effectively all pay more tax.
So it's kind of a way of raising taxes by stealth,
but it's not the same as saying let's change
the 20 % tax rate to the 22 % tax rate. That
is much more... newsworthy item and will definitely
go against their promises to not increase taxes
on working people. Okay, so if we strike that
one through for me as being one where they won't
be able to do much in terms of changing how much
revenue they get from that area, let's look at
benefits then. So I think back in October 24
when Rachel used to the budget, she had a plan.
And that was the fact that they'd seen personal
independence payments had risen astronomically
since the pandemic. And therefore they thought
this is an area they could tinker with. So they
will change the rules around receiving personal
independence payments. and significantly reduced
the amount the government needs to pay out. So
that was the plan all along, I think. But what
happened is, they obviously had a back bench
revolt, which meant that Rachel's plans for Pestland
pens pains didn't go through in the way that
she wanted them to. We now have the same big
hole in the budget and we weren't able to fix
that with benefits. Okay. So that means we have
pensions left and that's why I think this year
in particular, I'm really nervous about what's
going to happen around pensions, pensioners and
tax related to pensions as well. Now it didn't
say there was four categories. I'm going to draw
these up here because they're not interrelated.
If you look at all these, they all overlap, don't
they? We have people who earn wages and receive
benefits. We have people who receive benefits
and pensions, which is the state pension, and
we have pensions and people who work part time
as well. Okay, but this group up here don't really
overlink with any of these. Okay, and these are
the people who derive their income from assets.
Or another way to describe these are non -working,
super rich. So these are non -working super rich
and they derive their income from assets. So
what do we mean by that? I mean, they own masses
of land, they own lots and lots of different
businesses, they own lots and lots of debt. And
that could be our debt, or it could be company's
debts, or it could be even country's debts. So
when a government issues a bond, these people
buy these bonds up and derive lots and lots of
revenue from them. Okay, so these are the super
-it's that don't work and they own the assets.
Now, I think these are the untouchables personally.
I'm not saying that I approve of that. I'm just
saying that I do think there are untouchables.
And the reason I think that is the way political
parties work in my opinion is that to influence
policy, which is what they want to do. They need
to be in power. To get into power, they need
to win elections. To win elections, they need
significant budgets to be able to promote their
policies and communicate to the public. And the
only way that they're going to get the money
to do that is from the super rich. So these make
massive political donations to political parties
and any government that really tried to attack
this group by taking more money out of their
earnings. They would quickly find in the next
election that all these political donations would
go to another party and they would lose power
pretty rapidly. So these remain fairly untouchable
in my opinion. I'd love to know what you guys
think. So back to pensions. Where do we think
pensions could potentially get hit. So let's
have a look at what some of these particular
options and threats that I'm talking about might
be. I'm not going to go through every single
one, just some of the ones that I've read more
about recently. So if we list them out first,
we've got pension commencements, lump sum, we've
got tax free allowances, we have triple and we've
also got means testing. So let me talk about
each one of these briefly and see what you guys
think. Okay, so the pension commencement lump
sum. So each time I take an amount out of my
pension savings that I've saved for all my life,
25 % of that comes tax -free at the moment, which
is great for me. It's fantastic. Now, what the
options are for governments here is that they
could remove this completely. They could say,
there's no such thing as a pension commencement
lump sum tax -free amount. You are just going
to pay tax on all your pensions. They could obviously
cap it to say you will only get tax on the first
X amount of that. They might change the rate
from 20 % down to 10%. So they've got some options
there and each of them could significantly increase
the taxes that are going into the treasury. What
about tax free allowances? So say I'm a Working
40 % tax rate payer, the amount I pay into my
pension will be effectively tax free at the point
that I pay in. Now, this amount here is fairly
significant, as you can see, 40 % of your salary.
So when you're a higher rate taxpayer and you're
paying 40%, when you then come to claim your
pension, you're probably claiming that at more
like 20%. Therefore you've made a significant
benefit in tax. Now this could be reduced if
they, if the government decided say to change
this 40 % tax rate to what's commonly talked
about is 25%, then that would raise significant
funds for the government because There'd be less
amount tax saved. Of course it would discourage
people from saving larger amounts into the pensions.
For those who were on a 20 % tax rate, however,
it would actually improve their position because
the talk is that this would be a fixed 25 % tax
rate, whether you're a 20 % or a 40 % tax rate
payer. Lots of complexities here around doing
this, but that's another one that's often talked
about. Now the triple lock. The triple lock says
that your state pension will go up either by
one of these things, either inflation or it will
go up 2 .5 % or it will go up by average wages.
And the good thing about triple lock, it's the
higher of these three, which means generally
pensioners are always moving slightly ahead because
it's the large of these two. So if you have a
real poor average wages year, then you know,
the triple lock won't be impacted because it'll
go up by one of the high or the higher amounts.
So that's one potential for them to do. Triple
lock is pretty difficult to play with because
it's been a promise that's been around a long
time. I'd like to know what you think. And the
last one is means testing. So at the moment,
Um, if you are a multimillionaire pensioner,
uh, I'd say you get a private pension of let's
say 6 million pound per year. Uh, you will also
from the government, uh, receive kind of 11 ,500,
not sure what the exact amount is right at the
moment, uh, from the government as well as your
6 million pound a year. And some people say that
what the government will do is cap this, say
that if you earn over X amount, you will no longer
be entitled to a state pension. Now, when I've
done votes on this on YouTube, people have tend
to said people who earn over a hundred thousand
pound a year from a private pension. potentially
should be impacted by this, anyone less than
it should be impacted or not impacted. That's
where the kind of doting is at. But at the moment
it's, you know, there's no cap on that and everyone
is entailed to it. So that's potentially somewhere
where they bring it in. Now, if they did bring
that in at say 30 ,000 pound, then that would
have a massive impact on a lot of people who
were receiving 30 pounds, topping it up with
their 11 ,500. and, you know, coming out with
a reasonable amount for them and their family
to live on. If it's £100 ,000 then the £11 ,000
obviously doesn't mean quite as much. So I don't
know what you guys think about it, but there's
options there. If we go back to this page, that's
what worries me. That's out of play. That's potentially
out of play. That's now out of play because of
the back benches. Doesn't leave much else. Let
me know what you think.