Anyone watching the Budget 2024?

[LadyofRutshire]

I couldn't find a thread on today's budget. Anyone watching live?

Usually 40 pages / 1000 posts per thread

This is something that's commonly misunderstood. Public sector (defined benefit) schemes work differently to private sector (mostly defined contribution schemes).

Your 3% that you're getting from your employer is going directly into your pension 'pot' and invested in the stock market. Individuals in public sector schemes don't have a pension pot.

The police contribution of 31% is going into the overall running of the entire scheme. It has no bearing on what the retiree ends up getting because they receive a career average based on set rates when they retire.

For example, a civil servant contributes somewhere between 4.5-7.5% of their monthly salary. This buys you 2.32% of your salary every year and this accrues until you take your pension.

Let's say you earn £24k (£2k per month) and your contribution rate is 5% – that 5% (£100) buys you £46.40 (2.32% of your £2k salary) for your pension, or £464 over a year. If you work there for 20 years (assuming no pay rises/inflation for simplicity) you will have built up an annual pension of £9,280 (£464 x 20) which is paid out of the money built up by the employer contributions (27% in the civil service, and 31% in the police as per your example).

It is quite confusing as the media (Telegraph, I'm looking at you) conflate the public sector employer contribution and private sector contributions all the time - it certainly gets people riled up. But they are chalk and cheese.

I’m not talking about insolvent (or nearly insolvent) businesses which you have said is your specialist area. I work for a multi-billion global company. They have got rid of a significant number of staff to reduce costs. This will be another reason for them to get rid of people in the UK.

i’m not sure there are that many businesses who haven’t already got rid of the employees they didn’t really need.

The OBR have actually said that the employer NI increase will impact employees (or working people as the Government like to call them).

So you don't think improvements in schools and hospitals offers you anything? I can't believe you will never have to access health care.

Well yes of course, the sensible conpanies do this cost cutting well before they are close to insolvency! It’s still every day activity though, it’s not something triggered by the small increase in NI announced today

I fear we are heading for a recession , but again , it's only my opinion.
( I hope not , but it feels gloomy all round )

We farm well over 15 million hectares in the UK, so if less than 2% is used for maize I’m sure we will survive. Even if we just look at arable land there are over 4 million hectares farmed. So if 6 % is used for maize, much of which actually ends up in cooking oils for crisps anyway, I don’t think it is quite the issue, or that farmers are quite the enemy, you think.

It isn't just 1% though is it. The rate of employer NIC is increasing from 13.8% to 15%, and the salary threshold at which this starts to be paid is dropping from £9,100/annum to £5,000/annum. The threshold means we employers pay £615 more in tax for every person aged 21+.

The cost for our organisation next year is over £150k . We are not going to go bust, but we may have to make tough decisions. We are not for profit, so not in it to make millions.

So, more than wonder how much to pay a full time nanny, wonder how much a mother needs to earn after taxes to pay her nanny & employment taxes/pension.

I'm more likely to wonder why the father isn't contributing to the cost of caring for his child.

That's a good way of explaining it. But you have to agree that in the private sector an employee contribution of £100 to a private pension each month will never build you a pension pot that will deliver an annual pension of over £9k in retirement.

For you I have scrolled back

What are you asking? For real examples of businesses impacted due to a policy announced today?

I don't think it'll be that fast so it's a bit hard to put forward examples.

Re the OBR why is this a good thing?

The OBR estimates that 80% of the employer's national insurance increase will be passed on to employees.

So you are stating that it will have no impact whatsoever?

@friendlycat True in the “old days” where public sector workers would claim at 60. Pension is now tied to state pension age (mine is 68). I can claim before then but at hefty penalties.It will be interesting to see if the Daily Mail will keep referring to “gold plated pensions” in a decade or two.

Edit: meant to say some sector jobs would be hard to do at 68. For instance, I can’t imagine teaching at 68.

@EasternStandard can you link to the OBR discussing that point as I’d like to read more on it? Idid try googling.

True in the “old days” where public sector workers would claim at 60. Pension is now tied to state pension age (mine is 68)

Some can take pension earlier though can’t they?

Does she think it's the rich who use buses? That will hit the poorest members in society and pensioners who can no longer drive. It's obvious she hates old people and probably has / had an appalling relationship with her parents.

She's smug because she knows she has a gold plated pension...

I thought teachers were 57?

Yes any examples of all these businesses that will fold? It’s going to happen, for sure, according to you so must be easy?!

Re your question- not sure what you want but I’m assuming you know that “employees national insurance contributions will be passed onto employees” means that there is the potential that companies will hold back future pay increases to compensate?

It's obvious she hates old people and probably has / had an appalling relationship with her parents.

What a stupid thing to say!

Yes, at penalties which I’ve explained and why the public purse will be alleviated in future.

@Mlanket I’m a 46 year old teacher - my pension pays out at 68!

I do get the bus back from the town as two pounds is a bargain . Now I'll probably walk home , but not everyone can and it's not ideal with heavy bags. It's still cheaper to pay for an hour or two and drive in, which doesn't help the environment.

Pensioners who can no longer drive travel on buses for nothing. We have non means tested bus passes for everyone over state pension age in most of the country and everyone over 60 in London.