Given Noonan's raid on pension funds, can the government be trusted?

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Bronte

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Would the 18 year old not be advised to wait until he's 55 to start a pension. At that age there is a lot of tax benefits which increase as you age and that's the time to then put in the money.

Especially given previous tax raids on pensions (Here's looking at you Michael Noonan).
 
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Bronte said:
Would the 18 year old not be advised to wait until he's 55 to start a pension.
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No. The general rule of thumb is "as early as possible" but many would qualify that with "once housing has been sorted (e.g. a property purchase) and there are no high cost unsecured debts outstanding".

Waiting until 55 to start a pension is leaving it very late to benefit from long term tax free compounding and riding out market volatility.
Bronte said:
At that age there is a lot of tax benefits which increase as you age and that's the time to then put in the money.
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There is significant tax relief available at any age.
Bronte said:
Especially given previous tax raids on pensions (Here's looking at you Michael Noonan).
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What "raids"? The pension levy 2011-2015? What others? The pension levy wouldn't have significantly altered the fact that saving for retirement via a pension was generally a prudent step to take.
 
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No I was not joking. My sibling and I were discussing this and how good the tax benefits were when you are older. We also discussed how we don't trust the government or the pension providers (nod to Cork car crowd and Waterford Glass, or a nod over there to Enron I think it was). And we concluded the UK is hell bent on destroying pensions. Plus that all these schemes are a money racket for those running them, as in devising ways to get money out of the money you put in.

This is no a rant, it's an opinion. And clearly I think pensions are a good thing. But I'm mighty glad to have our pension money tied up in our own property. Where we can make all decisions.
 
Bronte said:
No I was not joking. My sibling and I were discussing this and how good the tax benefits were when you are older. We also discussed how we don't trust the government or the pension providers (nod to Cork car crowd and Waterford Glass, or a nod over there to Enron I think it was).
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Are you referring to the higher tax relief limits on contributions the older you get? Why do these matter if you don't trust anybody? How does starting a pension later mitigate such conspiracy theories?
Bronte said:
And we concluded the UK is hell bent on destroying pensions.
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Even if that was true - and that's definitely debatable - what has that got to do with Ireland?
Bronte said:
Plus that all these schemes are a money racket for those running them, as in devising ways to get money out of the money you put in.
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What evidence do you have for such a theory?
Bronte said:
This is no a rant, it's an opinion.
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One that runs counter to many facts.
Bronte said:
And clearly I think pensions are a good thing. But I'm mighty glad to have our pension money tied up in our own property. Where we can make all decisions.
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And not benefit from the generous tax reliefs on contributions, on growth, and on encashment? Sounds like cutting off your nose to spite your face to me.
 
Bronte said:
We also discussed how we don't trust the government
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You are entirely correct not to trust the Irish government.
There has been no statement that taking money from pension savers was unjust.
There has been no statement that money will not be taken again in the future.
The government is now going to opt citizens into a new pension scheme and then if it sees fit, will take money from this new scheme.
 
I would feel enormously satisfied if I was retiring this year massively poorer because I’d avoided pensions on the basis that Michael Noonan took 0.6% of my pension fund for a couple of years while the country was being bailed out from the biggest financial disaster in history.

A win for me.

I sure showed them.
 
Despite Noonan's raid on pensions, a pension is still by far the most tax-efficient method of saving.

And, yes, there is a risk that a future government might conduct another raid.

But they are probably more likely to raid people who own shares or properly directly through wealth taxes, CGT, restrictions on the right to sell, etc.

And any future raid on pensions is more likely to hit very big pension funds rather than the funds of the average worker.

Brendan
 
The Irish government is totally untrustworthy.

The 2 billion euro forcefully removed from Irish workers pensions was used to reduce vat for the hospitality industry to 9%.

Funds from workers pensions were used to reduce the restaurant and hotel bills of the better off portion of the population who could afford this lifestyle.

Charges for users of lap dancing venues were also reduced to 9% vat using workers pension funds.
 
S class said:
The Irish government is totally untrustworthy.

The 2 billion euro forcefully removed from Irish workers pensions was used to reduce vat for the hospitality industry to 9%.

Funds from workers pensions were used to reduce the restaurant and hotel bills of the better off portion of the population who could afford this lifestyle.

Charges for users of lap dancing venues were also reduced to 9% vat using workers pension funds.
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When did this happen? I must have missed it…

I couldn’t care less that the State, during unprecedented times, dipped into my pension fund and took a small percentage. They were truly unprecedented times where we had lost an element of our sovereignty due to the biggest financial crisis in history.

The State also introduced rationing once during ‘The Emergency’. Does that also influence the tinfoil hat merchants’ thinking?
 
Brendan Burgess said:
But they are probably more likely to raid people who own shares or properly directly through wealth taxes, CGT, restrictions on the right to sell, etc.
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Yes a government could impose levies on any of these investments.

These investors are free to switch their wealth somewhere else if they feel that they are being unfairly taxed.

In the case of pension funds the investments are locked in until the investor reaches pension age. These investors do not have the option to switch out to avoid unfair taxation.

For this reason no trustworthy government should consider levying pensions.
 
S class said:
The 2 billion euro forcefully removed from Irish workers pensions was used to reduce vat for the hospitality industry to 9%.
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It was part of an overall package.

Was the VAT reduced at the same time as the pension levy was introduced?

We had unsustainable debt and taxes were raised and expenditure was cut.

I did not agree with the pensions levy and challenged Noonan directly on it when he spoke to the Dublin Economic Workshop.

It does damage confidence in pensions. But it still does not change the fact that they are the most effective way to save.

Brendan
 
S class said:
These investors are free to switch their wealth somewhere else if they feel that they are being unfairly taxed.
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Agree to a point. So you might sell your property and buy shares.

But property and shares held directly are taxed much more highly than pensions even with the levy.

Brendan
 
Bronte said:
Moderator's note: Moved from another thread

Would the 18 year old not be advised to wait until he's 55 to start a pension. At that age there is a lot of tax benefits which increase as you age and that's the time to then put in the money.

Especially given previous tax raids on pensions (Here's looking at you Michael Noonan).
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37 years is a long time especially in governance, how do you know now if the tax benefits that we enjoy now will still be there in 37 years
 
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