Capital Gains Tax

[Dauphin]

Originally posted by Drogue

Did they scrap the entire annuity-requirement? So you can take the whole thing as a tax-free lump-sum?

You don't need to take an annuity - you can drawdown income from your pension savings to a maximum of 120% of the income that an equivalent annuity would have bought you. You can also vary how much income you are taking.

[Drogue]

Originally posted by MRT144
and im making the point that almost anyone can afford to save for a house given good life choices and lifestyle decisions.

Maybe in the US, not in the UK. I couldn't buy anywhere near where I work (ie. anywhere within an hour or more commute) and I earn quite a bit above the UK average, simply because I can't afford to live alone. So if I wanted to buy a house, I'd have to buy with friends, which is pretty risky and generally not the best idea, IMHO. Unless you're really well off in London, you live with other people, and couldn't afford the mortgage on somewhere to live on your own. Even in other cities, I've got friends starting at accountancy firms on significantly above the national average and still having to live with other people to afford rent. Buying a house is entirely unrealistic for a large part of the UK population at the moment.

Moreover, even if most people could buy houses, the fact that almost everyone who does is middle class or above still makes it a subsidy to the middle classes from the poorest people.

Originally posted by MRT144
The housing supply isnt independent of demand and as the demand rises the supply will increase relative to demand.

Well, housing supply is linked to house prices, so when prices rise, it's a signal to build more. But this is an imperfect mechanism (especially in the UK where it's the location that's the trouble - ie. not building on greenbelt land) and with increased demand, there will be some increased supply and some increased price. Overall it will become more affordable, but the effect will be muted, making it a very expensive subsidy.

I see what you're saying and I like the idea. However it will still largely help the middle class and it will also raise house prices, even if it does make housing more affordable somewhat.

[Kidlicious]

Originally posted by MRT144


A give away that has a positive economic effect? How many first time home buyers would contribute to an increased tax revenue based on these accounts?

I'm not sure what you mean. I don't think it would create tax revenue or create any economic growth, but it would help first time home buyers a little.