Below, published in full, is a letter sent from a Telegraph reader to Chancellor Rachel Reeves detailing concerns about the upcoming Budget and what it could mean for workers in her position.
Dear Rachel Reeves,
Before you stand up in Parliament and announce your Budget, here is one last plea to change course.
You have explained to us – endlessly – that those with the broadest shoulders must bear more of the burden to fix the foundations of the broken economy you inherited.
Yet I am the definition of a working person that you claim to protect. I was raised on a council estate and educated in the state system. I entered the workforce at the age of 21 and have worked tirelessly and continuously for more than three decades.
The only breaks I have taken were maternity leave when I had my two children. I have worked through illness and loss, and left my children in the care of others while I have done it.
Everything I own is the result of personal effort. I have not received a single penny from anyone – not from luck, an inheritance windfall, or generational wealth through the Bank of Mum and Dad.
I am now 54 and earn £125,000 pre-tax, £25,000 of which is sacrificed for pension contributions to avoid the pernicious 60pc tax rate. I support my eldest child at university and have withdrawn my other child from private school due to the punitive VAT charges on school fees. It pained me to do so but I cannot afford the increase.
For most of my working life I have not saved into a pension, preferring instead to invest in a home and in my children’s education.
My home is in council tax Band G with an estimated value of £2.5m, although it is heavily mortgaged. I bought it in 2019 for £1.4m plus stamp duty. The value has risen as a result of extensive renovations, which were done at significant personal and emotional cost.
Your upcoming Budget appears to target me with an almost surgical precision. Nearly everything that has been briefed to the press will impact my finances.
I have tallied up exactly how much this Budget will cost me according to all the briefings in the papers so far. I estimate that extending the freeze on income tax thresholds, a “mansion tax”, a £2,000 cap on salary sacrifice, plus the impact of going back into the £100,000 tax trap, could cost me up to £9,000 a year.
This represents roughly 13pc of my current take-home pay before any allowance for inflation, the cost-of-living crisis, or any other money grabs you have left in your red box.
I also drive an electric vehicle as I care about the planet we are leaving to our children. For this, I risk being subjected to a punitive pay-per-mile charge.
Given the eye-watering cost of my mortgage and other financial responsibilities, the only way I could possibly absorb the additional tax would be to suspend my pension contributions.
You surely agree that this would be disastrous for me, given my age and lack of pension savings.* *It also means I risk becoming a burden on the state, an outcome that helps no one. I imagine I’m far from alone in this situation.
In an effort to rescue the nation’s finances you appear to have decided to take more from the workers you promised to support and disregard any measures aimed at controlling spending.
You have already awarded public sector workers wage rises, without any requirement to increase productivity. Which seems somewhat counter-intuitive when your Government’s ambition is growth.
Your message to me is clear: work hard, save, invest, aspire to support your family – and your broad shoulders will be punished for it.
My message to you is equally clear: This is the straw that breaks the camel’s back. I cannot take on any more tax rises, and I doubt these will be your last.
For earners like me the only sensible option left is to leave the UK. So I am making enquiries and come Wednesday will be following your speech closely to see if my next move is abroad.
– Anon