New pension finalised
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The writing might not be on the wall just yet, but is that rattling the sound of someone rummaging around in the pen drawer?
End of non contributory AFPS? - Echelon Wealthcare
End of non contributory AFPS? - Echelon Wealthcare
Yet more totally incoherent ramblings from an incompetent and out of touch political class.
If they want people to invest in their futures, then they could do worse than stop buggering about with pensions every 5 minutes just to satisfy some bizarre liberal notion of anyone with a pension must be rich and therefore can be fleeced
If they want people to invest in their futures, then they could do worse than stop buggering about with pensions every 5 minutes just to satisfy some bizarre liberal notion of anyone with a pension must be rich and therefore can be fleeced
Last edited by Melchett01; 22nd Nov 2012 at 14:03.
It isn't helped by the rumours coming out of the Treasury that the 50K annual limit might be reduced further still to 30 or 40K.
It might be the only time that specialist pay being non-pensionable is a benefit, otherwise a large chunk of the RAF from SNCO upwards, who in financial terms are very ordinary, could find that far from benefitting from their pension, actually get a tax bill each year.
It might be the only time that specialist pay being non-pensionable is a benefit, otherwise a large chunk of the RAF from SNCO upwards, who in financial terms are very ordinary, could find that far from benefitting from their pension, actually get a tax bill each year.
How can anyone have confidence in financial planning for retirement when the goalposts move so far and so fast? You might well find the savings (sacrifices) you made are wiped out by changes to taxation or new pension "rights". The "piss it up against the wall and then rely on the basic pension and the welfare state" argument is reinforced by changes that undermine confidence.
Watch out for tax on lump sum soon!
OAP
Watch out for tax on lump sum soon!
OAP
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We always HAVE had pensions change, and the attractiveness of that change has ebbed and flowed and been linked to the economy at the time (2006 heralded brilliant change for instance, and benefited many people). Just as the military has always closed down units and made men and women redundant and sometimes grown quickly again. And just as the militay pension has improved and declined over time, and it might well continue to do so - who knows? In my working life though.. I doubt it!
Its easy to focus on the headline items such as the revision of annual and lifetime allowances and how much tax free cash you'll get (if that changes). And yes, its easy to suggest blowing it all whilst you're young and relying on the basic state pension.. but I wonder.. can you rely on that, and when will you be drawing it? And when HMRC revised the lifetime allowance a year ago, the uptake of people wanting to protect that, was marginal. But don't forget, even if annual allowances ARE changed, there is still provision to carry forward 3 years previous unused allowance. Dropping a lump sum in a while back, when the market was in a dip, will serve many people particularly well.
The simple truth is; we are living longer, we all want to be able to retire earlier in comfort and the state wants more of our money and p*ssing it against the wall won't change any of that. However you save and however you invest, identify what your end game is and identify the time-lines, make sure you have a diversified strategy and approach, make sure you buy quality products and make sure you stay on top of things.
Its easy to focus on the headline items such as the revision of annual and lifetime allowances and how much tax free cash you'll get (if that changes). And yes, its easy to suggest blowing it all whilst you're young and relying on the basic state pension.. but I wonder.. can you rely on that, and when will you be drawing it? And when HMRC revised the lifetime allowance a year ago, the uptake of people wanting to protect that, was marginal. But don't forget, even if annual allowances ARE changed, there is still provision to carry forward 3 years previous unused allowance. Dropping a lump sum in a while back, when the market was in a dip, will serve many people particularly well.
The simple truth is; we are living longer, we all want to be able to retire earlier in comfort and the state wants more of our money and p*ssing it against the wall won't change any of that. However you save and however you invest, identify what your end game is and identify the time-lines, make sure you have a diversified strategy and approach, make sure you buy quality products and make sure you stay on top of things.
Hi Al,
I really do think good provision for old(er) age is important. My impression is that there is a huge element of luck as to how much of our financial planning might be grabbed back by politicians in the near future. I am sure you see the negative effect that these constant changes will have on motivation for financial planning. In today's situation the government only want you to get the (lower) pension that is being designed for your job. If anyone decides to invest privately, you might find the regulations are changed to claw back any "good deals" that you invested in for so many years. I think we see this developing now (reductions in lifetime allowance for example).
There is no magic cure. However, surely it is in the best interests of the pension companies to lobby for stability in pension provision?
OAP
I really do think good provision for old(er) age is important. My impression is that there is a huge element of luck as to how much of our financial planning might be grabbed back by politicians in the near future. I am sure you see the negative effect that these constant changes will have on motivation for financial planning. In today's situation the government only want you to get the (lower) pension that is being designed for your job. If anyone decides to invest privately, you might find the regulations are changed to claw back any "good deals" that you invested in for so many years. I think we see this developing now (reductions in lifetime allowance for example).
There is no magic cure. However, surely it is in the best interests of the pension companies to lobby for stability in pension provision?
OAP
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Hi
You're right to the extent that one half of this current g'ment in particular, is obsessed with more people having a similar income in retirement.. and they aren't obsessed with making sure that amount is particularly high. Pensions can be fabulous force multipliers; I'm seeing one of my few civilian clients at lunchtime and they're using their pension to buy their business premises for instance.
But its not just a pension that you can use (although I keep saying 'If your partner doesn't use her annual allowance, then use it'!). You should diversify and keep your options open; the sooner you start, the more chance you'll have of success - higher risk funds/onshore or offshore bond for instance? It all depends on individual needs and aspirations.
Pension companies do lobby, frantically, but the issue is, much of society sees anyone in financial services as well.. bankers. Anyway, thank you for the inspiration. I say that because this morning's blog was done especially with you in mind.
Top 10 YouGov consumer thoughts on retirement planning - Echelon Wealthcare
You're right to the extent that one half of this current g'ment in particular, is obsessed with more people having a similar income in retirement.. and they aren't obsessed with making sure that amount is particularly high. Pensions can be fabulous force multipliers; I'm seeing one of my few civilian clients at lunchtime and they're using their pension to buy their business premises for instance.
But its not just a pension that you can use (although I keep saying 'If your partner doesn't use her annual allowance, then use it'!). You should diversify and keep your options open; the sooner you start, the more chance you'll have of success - higher risk funds/onshore or offshore bond for instance? It all depends on individual needs and aspirations.
Pension companies do lobby, frantically, but the issue is, much of society sees anyone in financial services as well.. bankers. Anyway, thank you for the inspiration. I say that because this morning's blog was done especially with you in mind.
Top 10 YouGov consumer thoughts on retirement planning - Echelon Wealthcare
Last edited by Al R; 23rd Nov 2012 at 16:05.
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Melch,
Re: cutting the annual allowance, on the surface of it, chopping tax free cash and/or chipping away at annual allowances are obvious candidates for George Osborne raising cash. What might the impact on ‘us’ be (I know I’m no longer in – old habits, etc) if the annual allowance was cut? If the annual allowance was reduced from £50,000 to say, £30,000, it would affect servicemen and women in final salary linked schemes but only if they have already built up substantial benefits; in other words, officers in middle/senior manager equiv positions. This is because those in final salary linked schemes have a contribution that is based on the increase in value of their pension benefits each year, and not just what you put in each year.
And that is why it unfairly affects those on final salary scheme and I imagine that the Pensions Society will be acutely aware of this. A similar claim that civilian employees in similar salary positions with a SIPP or personal pension and defined contribution occupational schemes who are ‘catching up’ on unpaid contributions from earlier years would also lose out is a red herring. There are very few civvy employees who can afford to save £30,000+ a year into a pension anyway. The net effect on SP is that once again, there is uncertainty in something they have little control over, and an increased possibility that their futures are no longer as certain as they once thought.
Another option is to reduce the amount that can be taken tax free at retirement – currently 25% of the accumulated fund. It would create uproar if individuals who had planned their retirement expecting to be able to take the tax-free sums suddenly found that it was taxable, especially so as more and more people post 55 still have mortgages to find deposits for. At a time when the g’ment is introducing auto-enrolment into occupational pension schemes – and has just published the paper that I mentioned yesterday on pension invigoration' to encourage higher pension saving – I think that any draconian measures would only serve to distance people from retirement planning.
Having said that, it might be that because these measures create so many problems for those in final salary schemes, that once the AFPS coup de grace IS finally administered, the only sound from the Officers Mess will be one long sigh of relief..?
Re: cutting the annual allowance, on the surface of it, chopping tax free cash and/or chipping away at annual allowances are obvious candidates for George Osborne raising cash. What might the impact on ‘us’ be (I know I’m no longer in – old habits, etc) if the annual allowance was cut? If the annual allowance was reduced from £50,000 to say, £30,000, it would affect servicemen and women in final salary linked schemes but only if they have already built up substantial benefits; in other words, officers in middle/senior manager equiv positions. This is because those in final salary linked schemes have a contribution that is based on the increase in value of their pension benefits each year, and not just what you put in each year.
And that is why it unfairly affects those on final salary scheme and I imagine that the Pensions Society will be acutely aware of this. A similar claim that civilian employees in similar salary positions with a SIPP or personal pension and defined contribution occupational schemes who are ‘catching up’ on unpaid contributions from earlier years would also lose out is a red herring. There are very few civvy employees who can afford to save £30,000+ a year into a pension anyway. The net effect on SP is that once again, there is uncertainty in something they have little control over, and an increased possibility that their futures are no longer as certain as they once thought.
Another option is to reduce the amount that can be taken tax free at retirement – currently 25% of the accumulated fund. It would create uproar if individuals who had planned their retirement expecting to be able to take the tax-free sums suddenly found that it was taxable, especially so as more and more people post 55 still have mortgages to find deposits for. At a time when the g’ment is introducing auto-enrolment into occupational pension schemes – and has just published the paper that I mentioned yesterday on pension invigoration' to encourage higher pension saving – I think that any draconian measures would only serve to distance people from retirement planning.
Having said that, it might be that because these measures create so many problems for those in final salary schemes, that once the AFPS coup de grace IS finally administered, the only sound from the Officers Mess will be one long sigh of relief..?
Al,
I, and most others below state retirement age, have recently suffered two considerable blows to our future income. Firstly, the raising of the state retirement age has cost my wife and I approx £25,000 that we will now NEVER get. Secondly, the Government had no qualms about changing the RPI to the CPI pension correction factor. You will be well aware of the possible damage this has done. There was uproar about this but it has been imposed on us all.
Sorry to be negative, and I support your advice, but I don't see that anything positive on this will come along for decades.
OAP
I, and most others below state retirement age, have recently suffered two considerable blows to our future income. Firstly, the raising of the state retirement age has cost my wife and I approx £25,000 that we will now NEVER get. Secondly, the Government had no qualms about changing the RPI to the CPI pension correction factor. You will be well aware of the possible damage this has done. There was uproar about this but it has been imposed on us all.
Sorry to be negative, and I support your advice, but I don't see that anything positive on this will come along for decades.
OAP
Last edited by Onceapilot; 23rd Nov 2012 at 18:46.
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Yup, I agree with you. For some, financial planning these days is as much about mitigating the eroding effects of legislation risk as it is getting ahead of the game - but there are many more conventional issues which harm savers but which are masked by headline screamers.
The dilution of aspiration is relentless, its a depressing time thats for sure - I started my kids planning for their futures when they were 16, and via pensions as well, because I fear for their long term futures. CPI/RPI increases won't be around forever - we'll see an end too, to the triple lock - because we simply won't be able to afford it.
Politics and messageboards don't mix but when you read that the EU is demanding 'x' billions more from us, you gotta ask.. why? And if we do agree, what standard or value is next to go.. where else can a few more quid be eeked at our expense? I read that a local community broadband service was funded by the EU. WHY?
The dilution of aspiration is relentless, its a depressing time thats for sure - I started my kids planning for their futures when they were 16, and via pensions as well, because I fear for their long term futures. CPI/RPI increases won't be around forever - we'll see an end too, to the triple lock - because we simply won't be able to afford it.
Politics and messageboards don't mix but when you read that the EU is demanding 'x' billions more from us, you gotta ask.. why? And if we do agree, what standard or value is next to go.. where else can a few more quid be eeked at our expense? I read that a local community broadband service was funded by the EU. WHY?
What might the impact on ‘us’ be (I know I’m no longer in – old habits, etc) if the annual allowance was cut? If the annual allowance was reduced from £50,000 to say, £30,000, it would affect servicemen and women in final salary linked schemes but only if they have already built up substantial benefits; in other words, officers in middle/senior manager equiv positions. This is because those in final salary linked schemes have a contribution that is based on the increase in value of their pension benefits each year, and not just what you put in each year.
That is exactly my concern, but the way the issue is being presented in the press is clearly a carefully worked influence op to portray anyone with a decent pension scheme as being rich. The government happily leak these rumours about 30,40 or 50k limits, figures which are generally above the average wage. Given the tough times we are living in, many people hear them or read about them and automatically jump on the bandwagon that if you can afford to put 50k in a pension you must be rich and therefore can be fleeced.
But the way the government is presenting these leaks is disingenous at best. They fail to mention that to get a 50k increase in your pension pot doesn't actually equate to a 50k cash injection. Because of this factor of 16 (I think that is the correct figure) you have multiply your contributions by for a given input period, it probably only takes a cash input of 3-4k to reach that 50k limit. So all of a sudden, a 50k increase is actually not the stuff of multi millionaires, its actually the stuff of your average man on the street working hard in his career and occasionally having a bit of luck with a promotion and a pay rise. And this is clearly shown on the HMRC's own website where they run through examples of how easy it is to hit a 50k pension uplift.
And that is what niggles me most. The government are being very selective in how they present this issue. They know they can whip up a frenzy with a carefully worded leak or press statement, knowing full well that the vast majority of the population will simply read the headlines without understanding the mechanics behind it. And once the outrage bus is trundling down the road, hey presto, the Chancellor now feels he has a mandate to hit the average man in the street once again. It's little short of mob rule through ignorance.
So drop the annual limits to 30k by all means, but in doing so Cameron, Clegg et al shouldn't be surprised when said outrage bus does a u-turn and runs them over as very ordinary people suddenly find they have been caught up in a revenue raising scheme, originally designed to hit the top 1 or 2% of earners. And this amongst others is one of the very reasons that I won't touch a pension with a barge pole outside of the AFPS that I'm a member of through work. A totally incoherent pensions policy with too much red tape, too much uncertainty and a deck stacked so far in the government's favour it's just not sport. I'll stick to other means of providing for my old age where I at least stand a fighting chance.
Last edited by Melchett01; 24th Nov 2012 at 09:15.
It's the amount that you can put into a pension each year free of tax.
HM Revenue & Customs: Understanding the annual allowance for pension schemes
HM Revenue & Customs: Understanding the annual allowance for pension schemes
Al R
This is probably a bit of a stupid question, but as "our" pension pots are as I understand it, theoretical, is this not a tax on something that exists only on paper? As I understand it I cannot ask the Treasury for my pension pot to take it invest elsewhere because it is actually funded from the tax revenue at the time it is paid. If it doesnt actually physically exist, how can you be taxed on it?
This is probably a bit of a stupid question, but as "our" pension pots are as I understand it, theoretical, is this not a tax on something that exists only on paper? As I understand it I cannot ask the Treasury for my pension pot to take it invest elsewhere because it is actually funded from the tax revenue at the time it is paid. If it doesnt actually physically exist, how can you be taxed on it?
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Roland,
I have done some examples which might help demonstrate how your tax could be calculated, and also, here is an old (wordy, sorry) blog entry about AFPS which might be useful. Yes, AFPS is unfunded, but you can in principle, take it elsewhere. Would you be mad to do so? Generally, yes, although not all client needs are prescriptive.
.
Want to transfer out of AFPS into a personal pension? - Echelon Wealthcare
First though, tax on a 'mythical' pot. As you may know, the Treasury cut the annual allowance from £255,000 to £50,000 in April of last year, and at the same time cut the lifetime limit from £1.8m to £1.5m. Whilst it had the scalpel and red ink out, it also decided to increase the factor for valuing final salary benefits from 10 to 16. And it is that final Reg that is causing the problems for those being promoted to, invariably, Sqn Ldr to Wing Commander.
Once you have the promotion under your belt and your income smoothes out, the problem tends to go away, but in the year when you get that big hike, you may have a problem. The problem can be mitigated by using previous unused annual allowance (currently, you can capitalise on any unused allowance from the previous 3 years by calling it forward) and you can have it taken out of your final pot in some instances.
HMRC does have an online calculator but using it for AFPS is problematic because many SP have switched from 75 to 05, or been commissioned and the rate at which you build up your pension pot (the'accrual rate') has changed during your membership of the scheme. It also has issues with taking into account the lump sum. Thoughtfully though, you won'thave to pay an annual allowance tax charge due in a tax year if you die or retire and start getting a pension or lump sum from all your pension pots due to severe ill-health.
Bear in mind as well, that following a pension share on divorce there is a pension debit orcredit attached to your benefits which may affect you either way (in other words,you might get a tax break/swipe when your financial settlement is sealed by the court).
To calculate any taxcharge, I’ll use two examples; and assume we’re looking at someone who is a member of AFPS05 (1/70th accrual), has served for 24 years and firstly, gets a promotion and 10% pay increase from £60,000 to £66,000. The second example will consider the same person who is promoted and receives a new salary of
£72,000.
Example 1
First, the opening value of your benefits (ie; the amount of money that might be needed to provide the expected benefit, in other words, a notional ‘capital' or 'pot' value) is determined as follows. First, calculated by dividing the number of years of service at the start of the year in question by the accrual rate of AFPS05 and then multiply by the starting salary (24/70 x £60,000 = £20,571).
The closing pension entitlement is then calculated. If pension accrual continues, then the annual pension will rise to £23,571 (= 25/70 x £66,000) as a result of the extra year's service and the pay rise in the 25th year. The increase in annual pension entitlement is therefore £3,000. This is then multiplied by a factor of 16 (it used to be 10..) to give a deemed contribution of £48,006 (in other words, 2k under the annual allowance – good news).
However, because AFPS also gives you a separate lump sum in addition to your pension without having to give up pension, next, add the amount of the promised lump sum to that amount. To keep things simple and for the purposes of the examples, I’m going to leave that bit out, but remember, it is very important.
Example 2
Lets look at the second scenario. If you got a promotion from that 60k, to 72k, then, as before; first the opening pension entitlement. Situation no change - it is still £20,571 (24/70 x £60,000). Next, calculate the closing figure (this one is different); £25,714 (25/70 x £72,000). Next, subtract the opening balance (£20,571) and you have £5,143. Multiply that by the new factor of 16 and you end up with an annual contribution of £82,288. In other words, with that promotion you are exceeding the annual allowance by £32,288 and remember too, to add any lump sum.
Although SP don’t have the uncertainty of fluctuating investment and annuity rates to contend with, it does seem unfair that someone who has a final salary scheme that rises by a relatively modest £5,143 is exposed to a tax bill (many clients put that into their personal pension and the contribution is calculated far more benignly) - hence my comment earlier about Forpen fighting the case.
Once you’ve worked that out, the contribution can be tested against your annual allowance of 50k, taking account of unused allowance from the previous three years, and any charge due can be determined. The unused allowance is also useful for making contributions into your personal pension (if you have one) - and particularly useful for someone reaching retirement with capital to spare and who has less need for liquidity than he has need for income in retirement and wants to be as tax efficient as possible.
Generally, as ever, take specific advice that you trust to see if any of that applies to you.
I have done some examples which might help demonstrate how your tax could be calculated, and also, here is an old (wordy, sorry) blog entry about AFPS which might be useful. Yes, AFPS is unfunded, but you can in principle, take it elsewhere. Would you be mad to do so? Generally, yes, although not all client needs are prescriptive.
.
Want to transfer out of AFPS into a personal pension? - Echelon Wealthcare
First though, tax on a 'mythical' pot. As you may know, the Treasury cut the annual allowance from £255,000 to £50,000 in April of last year, and at the same time cut the lifetime limit from £1.8m to £1.5m. Whilst it had the scalpel and red ink out, it also decided to increase the factor for valuing final salary benefits from 10 to 16. And it is that final Reg that is causing the problems for those being promoted to, invariably, Sqn Ldr to Wing Commander.
Once you have the promotion under your belt and your income smoothes out, the problem tends to go away, but in the year when you get that big hike, you may have a problem. The problem can be mitigated by using previous unused annual allowance (currently, you can capitalise on any unused allowance from the previous 3 years by calling it forward) and you can have it taken out of your final pot in some instances.
HMRC does have an online calculator but using it for AFPS is problematic because many SP have switched from 75 to 05, or been commissioned and the rate at which you build up your pension pot (the'accrual rate') has changed during your membership of the scheme. It also has issues with taking into account the lump sum. Thoughtfully though, you won'thave to pay an annual allowance tax charge due in a tax year if you die or retire and start getting a pension or lump sum from all your pension pots due to severe ill-health.
Bear in mind as well, that following a pension share on divorce there is a pension debit orcredit attached to your benefits which may affect you either way (in other words,you might get a tax break/swipe when your financial settlement is sealed by the court).
To calculate any taxcharge, I’ll use two examples; and assume we’re looking at someone who is a member of AFPS05 (1/70th accrual), has served for 24 years and firstly, gets a promotion and 10% pay increase from £60,000 to £66,000. The second example will consider the same person who is promoted and receives a new salary of
£72,000.
Example 1
First, the opening value of your benefits (ie; the amount of money that might be needed to provide the expected benefit, in other words, a notional ‘capital' or 'pot' value) is determined as follows. First, calculated by dividing the number of years of service at the start of the year in question by the accrual rate of AFPS05 and then multiply by the starting salary (24/70 x £60,000 = £20,571).
The closing pension entitlement is then calculated. If pension accrual continues, then the annual pension will rise to £23,571 (= 25/70 x £66,000) as a result of the extra year's service and the pay rise in the 25th year. The increase in annual pension entitlement is therefore £3,000. This is then multiplied by a factor of 16 (it used to be 10..) to give a deemed contribution of £48,006 (in other words, 2k under the annual allowance – good news).
However, because AFPS also gives you a separate lump sum in addition to your pension without having to give up pension, next, add the amount of the promised lump sum to that amount. To keep things simple and for the purposes of the examples, I’m going to leave that bit out, but remember, it is very important.
Example 2
Lets look at the second scenario. If you got a promotion from that 60k, to 72k, then, as before; first the opening pension entitlement. Situation no change - it is still £20,571 (24/70 x £60,000). Next, calculate the closing figure (this one is different); £25,714 (25/70 x £72,000). Next, subtract the opening balance (£20,571) and you have £5,143. Multiply that by the new factor of 16 and you end up with an annual contribution of £82,288. In other words, with that promotion you are exceeding the annual allowance by £32,288 and remember too, to add any lump sum.
Although SP don’t have the uncertainty of fluctuating investment and annuity rates to contend with, it does seem unfair that someone who has a final salary scheme that rises by a relatively modest £5,143 is exposed to a tax bill (many clients put that into their personal pension and the contribution is calculated far more benignly) - hence my comment earlier about Forpen fighting the case.
Once you’ve worked that out, the contribution can be tested against your annual allowance of 50k, taking account of unused allowance from the previous three years, and any charge due can be determined. The unused allowance is also useful for making contributions into your personal pension (if you have one) - and particularly useful for someone reaching retirement with capital to spare and who has less need for liquidity than he has need for income in retirement and wants to be as tax efficient as possible.
Generally, as ever, take specific advice that you trust to see if any of that applies to you.
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I retired in 2004
Received a lump sum within 2 days - paid off the mortgage, renewed the double glazing and all the guttering and down pipes etc, bought a second car - job done, set up for life.
Now living quietly on the pension.
I am a happy bunny.
Rgds SOS
Received a lump sum within 2 days - paid off the mortgage, renewed the double glazing and all the guttering and down pipes etc, bought a second car - job done, set up for life.
Now living quietly on the pension.
I am a happy bunny.
Rgds SOS
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You're lucky. But what of the future?
Low hanging fruit finally ripe enough but don't shoot the messenger
Low hanging fruit finally ripe enough but don't shoot the messenger
Well the Autumn Statement is now only hours away. Are we all ready to bend over and take another bat where the sun doesn't shine whilst the feckless blow their cash on cigarettes and Sky tv and the rich pay their accountants to come up with schemes to avoid paying any tax?
At the moment it just seems to be a tax bill on promotion to certain ranks. What are the odds that will change and we end up getting a tax bill every year thanks to having a half decent pension if they do cut the limits to 30k?
Talk about potentially disincentivizing a huge chunk of the country from wanting to get on in life. Tomorrow could be the day that finishes off pensions in this country ... and potentially finishes of the Conservative's chances of being re-elected for another decade.
At the moment it just seems to be a tax bill on promotion to certain ranks. What are the odds that will change and we end up getting a tax bill every year thanks to having a half decent pension if they do cut the limits to 30k?
Talk about potentially disincentivizing a huge chunk of the country from wanting to get on in life. Tomorrow could be the day that finishes off pensions in this country ... and potentially finishes of the Conservative's chances of being re-elected for another decade.