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Tax changes - are you better or worse off ?(191 Posts)
Just listening on the news that only the top 20% will be worse off. I had never realised before that I am that well off to be honest !
I think we will be about £250 worse off if the online predictor things are right - we have 3 kids, 1.3 FTE salary (both work part time) with a middling salary (average about 40-45K between us). I think the money we will lose will be from falling off the top of the child tax credit limit (just).
I don't particularly expect handouts from the govt at my level of income, but I was surprised that our income puts us as high as the top 20% - I would have thought a bit above the middle. There must be a very long tail stretching out to the high earners.
It made me wonder roughly how many others are similarly unaware that they are classed as the wealthiest 20%.
"I always thought the Tories and the posher sort of Lib Dems especially hated the middle class and now I'm sure of it."
GB wasn't all that fond of middle-income earners either, if you remember. He threw the odd scrap their way with the Child Tax Credit but he was famous for his stealth taxes otherwise. Like it or not, the average household income in the UK is circa £25k and only 10% of the population have an income in excess of £51k. So, regardless of where you happen to live or what you choose to spend your money on, if you're on more than £25k you're technically better off than most. And, given that we have a system which involves a redistribution of wealth from the better-off to the poorest... some of us pay in more than others.
Having said that, I'm glad that there is a wholesale welfare reform going on and a revision of public services at the same time. When some are being asked to contribute so much, waste and profligacy elsewhere in the system unacceptable.
But you can't be better off if your commuting costs and childcare costs are never offset against anything, and you can't get to work without either of them. It's false mathematics.
It is scary - if you are above the threshold but only just the outgoings compared to income mean most families can just about break even if they are frugal, have no holidays, only run one cheap car etc. The notion that being on 45k makes you rich is silly.
If you pay 40% tax plus N.I then a £45k salary becomes about £2600 a month take home pay which sounds a huge amount but if out of that you pay:
£700 mortgage or rent + £200 petrol + £750 childcare costs + £120 council tax + £200 - £400 phone, gas and electricity and insurance bills + £400 food and shopping bills + £50 clothes and shoes then you just about break even. No holiday, no after school clubs, no treats!!
If you live somewhere where rents are more like £1000 a month or house prices are sky high or you have a very long commute or you have two children in fulltime childcare then you may actually have a shortfall every month.
Without benefits but with more than one child £45k is about the minimum you would need in order to live in most cities and meet all your bills.
We're £800ish worse off. It won't cripple us, but I bloody hope they're going to spend it where it needs spending and not piss it away <grumpy arse today>
I'm self employed so the tax calculator won't work for me.I'd imagine we'll be worse off -we usually are.
£526.39 worse off. Oh the joy.
Praline You are the same as me, I got 441 better off (dp earns 21k)
But when I did it on the calculator it stays the same as what we get now, so i'm confused!
It is interesting. Our joint income is about 40-45K (varies a bit through the year). We have 3 kids but no childcare costs. We run two cars, but have a relatively short commute (about 20 mile round trip). Our mortgage is low.
We are comfortable in that we can cover the occasional unexpected bill (eg car breakdown) without going in to debt. We have 1 or 2 modest uk holidays a year (cheaper cottages out of season in cheaper areas).
But we are frugal - we don't buy take aways, don't belong to any subscription services (phone, tv, gym) etc. Low mileage (about 5000 per car per year), rarely buy clothes or other luxuries, don't go to cinema or attractions. No afterschool clubs. No foreign holidays.
It puzzles me how people can afford to do any of those things we don't do. What I mean is, if my income is top 20%, and my disposable income is likely higher than most in that income bracket (given low mortgage and childcare costs) and I can't afford all those "luxuries" - who is it that keeps all those places going ? Eg family entry to a random visitor attraction - say £35 min etry fee (plus other stuff like food).
People have different priorities, we eat put regularly but pay with tesco vouchers so we come across more 'frivolous'
We come out better off on the calculator but we aren't entitled to TC even though it says we are so it's only slightly better off due to tax /NI
We wonder that as well therockholt. We know one couple whose parents bought them a house when they got married so it's not hard to see how they can afford things but everyone else seems to manage holiday plans for Easter or at least day trip to Alton Towers or bowling in the schedule. We seriously cannot afford anything like that right now despite being in to the top 20% apparently.
We don't buy clothes except when absolutely necessary and even then get them from supermarkets or second hand sometimes. We cannot afford Sky TV. We have one car. We do not have gym memberships. The kids go to a club but it is am amateur type one so the weekly fee is minimal. We sometimes take them swimming but cannot afford lessons like lots of their classmates have. We don't smoke, drink rarely, have a takeaway about 2 times a month and if the washing machine stops working we would have to borrow money or save up to replace it. We don't have a spare £300 in the budget at all.
I am not pleading poverty here. Our income is just over the top tax paying threshold, our bills are paid, we eat a good diet and we live in a stupidly expensive part of the country and pay high housing costs (because DH's job is in London and it is the only place he could do that job due to where the company is based) but that's about it. We do not have luxuries in the way that many people seem able to afford. I am not complaining as we are better off than many but I wouldn't class our lifestyle as the top 20%
Will certainly be a winner as I am below average wage, any wingers on 45K want to swap? No, thought not. I work btw, live in a low income, high house price area. On the up side I only have a small mortgage .
"It puzzles me how people can afford to do any of those things we don't do. "
They stick it on the CC. I can't do debt - gives me sleepless nights. The last 10 - 12 years, I've seen friends jetting around the world on fancy hols, eating out all the time, buying the latest gadgets and getting kitchens refitted.... and always thought they must be on fantastic salaries to afford all this luxury! Only more recently have I found out that it was all on the never-never... bank loans, CC's, HP up to their ears. Now the same friends are moaning that they're struggling to keep up with the payments & have zip-all in the bank. Something about making beds and lying in them?
Chil, agree about GB hating the middle as well. But are we you or he saying there should be no middle? Because if the goal is to make the average income the same for everyone, why would anybody do a demanding or difficult job?
Giddy, we're almost exactly like you. It's not stupid either to live some where where there's WORK, ffs. Or perhaps it is. Perhaps all of us should move to - dunno - Burnley - has lowest house price in UK - and go on benefits?
adamschic, how many hours a week do you work? how long was your training? How much debt did you rack up doing that training? How many hours homework did you do a night at school? Will consider a swap, but only if it can be backdated to age 14.
We'll be nearly £200 better off. Find this hard to believe. I suppose it means that we have not qualified for WTC or CTC or anything like that, so we'll not lose it and apparently I'll pay less tax. Of course, VAT increase is not included in the calculator.
I am so happy I am not the only one here who is considered to be a "bit tight" (DH). I have been considering to have a credit card to get frequent flier miles, but I do not think I could meet the spending requirements.
I work 30 hours a week. Have A levels and went to night school to qualify to a level 4 whilst working full time as a single mum when DD was 2! Is that good enough for you? The area I live is a low income area, that's why I wouldn't even earn an average wage even if I worked 35 hours a week. I have never claimed benefits, well once when I was made redundant.
I think people earning over the HRT shouldn't need benefits.
Will say I take your point that I could have made better choices but I don't think we should argue over it for the sake of what £30 a week with one child. Not everyone can be high earners.
'The idea that this key part of the working population should be penalised to protect many people who are not committed to their work, did not put in the hours over years, who have avoided educational opportunities and have not invested in their own skills is contrary to justice' What, people like DH and I? Me with my degree and self funded MA (almost) and DH with his redundancy payment, mature student study and new self employed business? Damn our lack of self starting ability eh?
We wouldn't be better off if we gave up working BUT we will be if the changes to DLA and the proposed disability tax credit cut affects us; that WOULD be a disincentive. Would DH stop work? Nah. He'd go stir crazy. Would the boys quality of life suffer? yes. Would their autism be cured because ATOS say it's not there? Sadly, no.
Can't wait to qualify and get away from dependency and the vagaries of sitting Governments.
>Not everyone can be high earners.
Patently most people aren't. That is what surprised me. My field is populated by people who have first and most often higher degrees (so 3-6 years training min), earning roughly 35-45K. I have gained the impression over the years that that is not a particularly high salary for a "professional". But if that puts us (DH and I) in the top 20% income bracket by doing 1.3 FTE hours between us then it makes me realise just how little the majority must be earning. And how reliant they must be on both benefits and credit just to make ends meet.
You see headlines of people earning much higher salaries (and I know a lot who think 40K is a pitiful salary) - and it makes you realise just how big the range is.
I also tend to think those making the decisions have no idea what it is like to exist on the "average" income.
"if the goal is to make the average income the same for everyone, why would anybody do a demanding or difficult job? ".... Self-esteem? Job satisfaction? Career progression? There is definitely a grey area in that section between average earnings and the HRT threshold where a small increase in earnings does not improve your living standards. But most people push past that in the belief that it's best to keep climbing the ladder regardless.
Apparently i am going to be £1500 worse off, not helpful living in london, working over 40 hours a week, being a single mother, so am going to have to consider many things, nursery's are really expensive and when looking there just weren't any cheaper ones. Per month that is the equivalent of 90% of our grocery bill, so food, work or nursery ...
Wahay! We're £11.88 better off. I shall go out and spend it on booze.
I think that Throckenholt makes a good point - that £35-45k is often portrayed as not being a 'good' professional wage, but in fact, it's comfortably in the top 20%
I heard an interesting programme a while ago on the radio talking about the average wage. A married man with two kids called David from London who was, I think, 43 wanted to know how he rated compared with other Davids of 43.
The programme said that "average wages" are not a good term, because the average includes pensioners, school leavers etc who bring down the average. I remember that a typical David from London would have a gross household income of about £55K by the time they were 43.
So I think it is disingenuous of the govt (well, fancy that!) to imply that on £42K you're well off, when in fact it entirely depends on your age and circumstances.
Depends on how much you have to live on Adamschic
According to the bbc calculator we will be over £1000 better off
Although I admit I don't fully understand the finer points, I'm starting to feel like it's another attack on those people who work hard to support themselves and rewarding those who sit on their arses!
We're a very hard working couple, both work a 40-50 hour week for fairly low salaries, both worked through uni to pay our fees ourselves, privately renting and waiting to get married, have a family, mortgage etc because we're saving to do it ourselves and we'll be £800 pa worse off. My friend who lives in a council unit rent free!! has 4 children by 4 different dads as is pregnant with number 5 (all planned or at least not avoided), smokes like a chimney, has 3 dogs, has never worked and doesn't intend on ever working is going to be £300 better off (not including what she'd get anyway for new baby).
Don't get me wrong I love her very much it's just that i'm starting to feel that working hard all my life is being punished!! Rant over. Am now going to sleep before my 13 hour night shift. zzzzzzzzzz
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