Is Anyone preparing/hunkering down for 'after the budget'

[IsUnemploymentRising]

The news is today seems to be full of headlines such as unemployment is going up, housing markets are softening, budget is make or break.

Lots of people such as Andrew Bailey quoting things like markets could crash due to debt and AI bubble etc

I just don't see how RR or anyone else for that matter can get us out of our current situation without considerable cutbacks and pain.

Raise Taxes - lots of people think this is maxed out now with rich leaving and businesses already hit (thus rising unemployment)

Cut Benefits - will they try this again. If so what will all the people on benefits actually do to live. Will they all get jobs. Is there jobs?

So are you hunkering down?

Me personally I wish they would just get on with it. I hope to move house in next few years and whilst I'm still committed to it I can see another frozen housing market coming where only forced sellers sell and everyone else sits tight.

I'm retired (although not getting any pensions yet as too young) and definately worried about pension values (ie stock markets, bonds etc). It's very difficult to plan when your pensions are dependant on things outwith your control. (not applicable to those with final salary/defined benefit schemes of course)

State pension is a good 14 years away for me (I'm fully paid up) but I worry it will be eroded when I have built it into my calculations for retirement not to mention the freezing of tax brackets which means we are all getting taxed more each year by stealth.

I'm probably in a better position that many to weather the storm as no mortgage or debts and holding cash etc but even then I worry about our currency being worth nothing soon if they go down the route of printing money again.

Am I being overly pesimestic. I mean how are they actually going to get us out of this. For those on benefits (apart from worrying, being scared etc) how will you actually cope if your benefits are cut.

In all honesty I’m not doing, or planning on doing anything differently. I’m as confident as I can be that I can ride the next (and the next, and the next…let’s face it’s…there’s no silver bullet going to come and save us from ourselves) ‘storm’.

I keep some cash in the car and house incase it’s needed, I keep a reasonably well stocked Armageddon pantry. I’ve a good emergency fund…but overall I think the best thing any of us can do is not panic and add to the chaos.

Stocks and shares go up and down all the time, budgets happen every year…self preservation is what’s needed.

that all sounds very sensible and much in line with my thinking.

I too have cut back on some luxuries - like art and I don't really go on holiday anyway or buy much clothes.

Had to fork out for some private healthcare recently so I'm budgeting for that perhaps being a more regular expense.

Thanks for posting.

I’m not worrying, a lot of peace can come from accepting the things you cannot change (and changing the things you can). The problem is way bigger than this govt, Andrew Bailey’s comments were about the global market, and there’s a budget every year so you could be constantly worrying if you allow yourself.

I’m a fair bit younger than you and started with nothing so we don’t have a huge cushion, we’re still building our savings/pensions and have most of our mortgage to pay. Worrying about what might happen in the future won’t give us any more security so it seems futile. I’d rather budget careful and make sensible choices with the money we do have.

I'm not really sure what I should/could do.
I am however quite worried by the budget.
I think Reeves tries to raise money by quite sneaky means (eg freezing thresholds) and hurts small sectors of people at any one time so that the majority don't make a fuss (eg farms, private schools etc).

I am concerned about council tax. I don't live in a house in the top band, but since it's above band D average, I do think that I am in line to be hit. We already pay £3700 per year to receive almost nothing - an occasional bin collection, a bit of street lighting, that's it.

I do wonder whether we could have a better life elsewhere. Everything here is broken.

Yes you are right I am luckier than some but as a single person household I have no family to turn to if it all goes wrong.

No disability so you are correct I could try and go back to work but the headlines seem full of rising unemployment and if they cut benefits won't lots of people be looking for work.

I know we have had lots of ups and downs before as a country but somehow there always seemed to be a way out (cutting interest rates, printing money, selling off public companies, selling off council houses, austerity)

I just sort of feel like they have used up all their chips now for the previous periods of hardship and they are backed into a corner now.

I feel incredibly sorry for the young especially if as they say entry jobs are no more due to AI. With that and the price of houses it must be quite depressing to be young nowadays.

Yes you are absolutely correct. The economy will be made worse by us all not spending but in turn it makes sense to keep your money just now.

That's why i wonder how they are going to dig us out.

We have a very good financial advisor who we trust. Because of uncertainty, which isn’t new- Brexit, Covid, Putin etc etc, we spread everything. So some cash is medium term fixed and some easy access variable. Cash is there as a buffer against taking out pension when/if market crashes so that’s how we think if it. The interest rate you’re getting isn’t the only consideration plus if world economy becomes more stable we will move the cash to more appropriate places.

So does that mean you don't own a house (no assets) and are private renting? Are you worried about landlords selling up now because of all the squeeze on them and houses being so expensive?

Do you have a secure job with no worries of rising unemployment?

Interesting to hear others points of views. Thanks for posting.

If you’re worried about an AI bubble, I’m not sure the budget is going to help or hinder.
There was quite an interesting episode of The Rest is Money podcast this week where Robert Peston interviewed someone about the AI finance stuff - might be worth a listen.

I’m resigned to paying more after the budget but my biggest worry is the doom loop we seem to be in - the budget needs to boost economic growth as that’s the only way that black hole is going to be filled

IT/CT/VAT/NIC make up over 75% of the tax take. Not touching or reforming those means RR is just tinkering around the edges

How was conference for you OP? Bet you're glad to get back to Matthew Parker Street.

Like you I don't actually mind paying more for better services. However I'm just not sure that would happen and that the extra tax would not just fall into the black hole of paying debt interest, paying our huge benefit bill etc

I've already had to start forking out for private health care that I hadn't anticipated because local services are just so poor now re NHS etc.

I don't really have any faith that extra cash would fix the NHS now so........

You are right though - we need good education, good defence, a healthy working population but I fear there are too many people who consider working a lifestyle choice now. Perhaps I am part of the problem having retired early fifties. No benefits but not contributing any more either.

No. But then I don’t watch the news and don’t see the point in spending my life in a permanent state of worry about stuff I can’t control or change.

You are absolutely right that we have had plenty of ups and downs before. I'm so old I remember the strikes in the seventies lol.

That brought in dramatic change along with the IMF loan in the form of Maggie Thatcher who of course sold off alot of our public companies.

I just feel they have cashed in all their chips now. We don't really have anything to sell anymore and our 'wealth' seems to be house prices.

We also have an ageing population, a ton of benefit claimants, rising unemployment and no growth so............

Perhaps there is another rabbit in the hat I haven't thought about.

They can't penalise workers any more - workers are already bearing the brunt with fiscal drag, student loan repayments, workplace pensions, etc.

I'd say the only sensible way of raising a lot of tax is to scrap nic and raise income tax by a rate set so that ordinary workers don't pay any more, i.e. a tax rise on non workers living on investment income, buy to let profits, dividends, interest, occupational pensions, etc. - that's where the money lies - those with assets or pensions. Those groups have been shielded from tax rises as they've avoided the increases in NIC over the past few decades, and they benefitted massively from the scrapping of the higher tax rates of the 70s and 80s on "unearned" income.

We need more people working, and more workers working more hours, so scrap the cliff edges and stupid thresholds causing stupidly high marginal tax rates, i.e. the crazy 62% on earnings over £100k, the illogical removal of free childcare on those earning over £100k, the child benefit claw back for those earning over £60k. Likewise with benefits at lower levels - stop the high percentage clawback and cliff edges for lower earners i.e. Universal credit, free prescriptions, rent support, etc. We need to remove ALL disincentives for work.

I think we firmly disagree on most political points to be honest. I find it very frustrating that this Labour govt is clinging on to its 'no income tax rises' pledge when that pledge was made, frankly, in a different world and we need to approach this new one a bit more collectively or we certainly will tank. I don't think most people on benefits choose to be there. It's not a luxurious lifestyle in the majority of cases, far from it.

I think that as long as we don't kick all our NHS staff out of the country the NHS is certainly salvageable. Currently it runs on the massive goodwill of its staff and needs a good sort out of money and systems for sure. I think as a country we are quite far from a place where we have enough money to pay for all the things we need but sacrifice in the form of personal taxes (rather than in the form of government austerity) is a start.

We will move investments about the same as financial friend does because he works in the city and knows so much more about markets.

You are absolutely correct. I am trying not to worry and rather take positive action to protect myself.

I do worry the UK has cashed in all it's chips now though and we have nothing to fall back on.

I'm definately trying to make sensible decisions re not overspending just now or buying any large purchases that aren't necessary.

I didn't actually worry so much when I was younger perhaps because I was married at the time and perhaps just blissful ignorance to a degree or maybe we really are worse off now, I don't know.

Yes I agree. They are trying to be very sneaky and that just pisses me off more to be honest.

Like you I seem to pay a fortune in council tax and as I live alone it seems a huge burden. I hate things I have to pay but have no control over to influence.

I don't live in a particularly large or posh house and the bill seems high in proportion to where I live and what my other expenses are.

I think council tax funds social care doesn't it so with an ageing population more and more of the ct is going to this.

Softly softly doesn’t do it any more. Plasters need to be ripped off.

Halve benefits.
No more benefits for ‘anxiety’ and 80% of ND diagnoses - only for those with learning disabilities, non verbal etc
Unemployment benefits only payable for 12 months.
No under 21s to claim unemployment benefits.

Most of it goes on social care and SEN (60% in our area). It’s just a social care tax now.

Very sensible. Yes I have fixed the money over 3 years, 18 months and a bunch in easy access to fund myself for the next 5 years. By then I can take pensions although of course if the market has crashed I won't want to do that.

Other options that I don't want to do but could if an emergency is lodgers (2 empty bedrooms) and equity release (again don't really want to do this)

Thanks for posting

I’m borrowing some £ from DH (basically prepaying my expected contributions for the rest of this FY) to shove into my SIPP in case they dick around with tax relief.

Our wealth is house prices which is why it’s good to vary investment internationally.

As to what it will do to this household, we have family health insurance and if Reform get in (they won’t but let’s work with worse case) in 4 years, teens will both be at uni so H will move us to an overseas office to, well for many reasons, ride out the financial storm, earn more, experience a part of the world you don’t have the Reform lot on the news on a regular basis! But that’s not this budget, that’s medium term.

This budget, see what happens, if need be curb disposable spending in the local economy, and online, it’s insanity to support local businesses if it means the teens will suffer, and they are driving and need uni/young adult cold hard cash, which is dollar, but we chose to have them so will pay for them, actually they are our favourite things to pay for.

We don’t have a big house, compared to income, so not worried about charges on that.

thanks for the tip. I wasn't actually worried about AI until recently when I have started to become more aware of the impact it will have on jobs and the economy. Also there does seem to be a fear element of it becoming too intelligent and taking over the world (or have I been watching too many sci fi films......)