Pensions -the new tax target

Well, all I keep hearing at the moment is the talk on the government tweaking of the Pension taxation. Now, if the tax reclaim limits are going to change to a flat rate value then that will be annoying.

In previous years I have been a high rate taxpayer so have been able to claim back additional tax for my pension contributions on my tax return.  This year due to my ‘freedom session’ I have not triggered the higher rate tax threshold so will be treated as a basic taxpayer. Now if the government change the rates quickly, i.e. in the tax year 2016/2017. Then I will not be able to push some lump sums into my pension before it disappears as I should qualify as a higher rate taxpayer in the next tax year. That will be an annoy twist to my ‘freedom session’.

I have also stopped looking at the share/fund prices as the values are dropping. Once I get my first pay cheque I can look to invest in some cheaper shares and funds, while I await that I will hang on and see if the prices continue to drop, meanwhile I continue to drip feed monthly payments into my fund NISA.  I am trying to increase my dividend share portfolio and getting a good price for additional shares is my plan this year.

It will be interesting to see how this year runs. According to TEA’s FI-o-meter  I should be FI within a year. It feels like the OMY syndrome but my falling net worth means that the threshold just keeping ticking along from ” I’m there ” to ” Oh, not quite there yet ” to ” still… Oh, not quite there yet “.

My idea behind my FI fund is to enable me to be free from “having to work”, I can then work because I want to rather than because I need to. I can then look at working just for the fun of it. Yes, working for fun! What a comment…radical thinking there. It normally is only quoted by the idle rich. I am not rich by any means, just looking for independence from the work treadmill.





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