New NI tax. How are people meant to afford this?

[OnTheBrink1]

We bought our house just before covid, got a mortgage that pushed us quite a bit but worked it all out and it’s been doable since then. We needed to push the mortgage quite a bit because we were upsizing to get an extra bedroom for the kids and a downstairs loo and in our area and from what we had before it was a jump.
Been managing since then but no progression opportunities in DH job during the last 18 months due to covid it seems as recruitment was largely paused.
However, now we will now have to pay an extra almost £900 per year on this new tax. £73 I make it.
We don’t have any benefits of any kind.
It’s going to be quite a struggle to afford the mortgage and still maintain the car (which is old but we need for work and kids stuff) plus all the usual bills and food. Kids are between 8-12 and need bus passes, constant uniform and all manner of expenses of course.
I mean we will struggle by but it’s going to be tough to afford that extra £73 a month when we had all the mortgage planned.
Just don’t get how they can bring it in so soon when it’s such an increase. How are others in a more difficult position going to afford this? People will be loosing their houses surely?

@ilovecardigans

What about limiting tax relief on pension contributions for higher rate taxpayers? Or cap tax relief at 10% on all pension contributions?

Then you’d just be kicking the can down the road because people would opt out of occupational pension schemes.

How many times? As many times as it takes until we don't have a situation where 1% of the country have almost a quarter of the total wealth, or if you want to take it a but further where 10% have more than the remaining 90%. It boggles my mind that you would think this is a fair or desirable outcome for any society
You mean until they burger off somewhere more tax efficient so that we mere mortal have to contribute even more to make up the loss.

People need to grow up about fairness. Life isn't fair. You probably have things others don't, children, maybe your health, and those who don't might not 5hi k it's fair either!

At least the 1% do pay some tax, more than some do in this country.

What is so wrong with everyone earning an income contributing to help pick up our economy? I really don't get this 'I don't want to pay so someone else should'.

Then you’d just be kicking the can down the road because people would opt out of occupational pension schemes.

I suspect that a lot of people are doing this already, just to get by. I was thinking more along the lines of private pension plans TBH. There are some absolutely mahoosive private pension pots out there that have been boosted significantly by tax relief. And don't get me started on pension recycling...

What is so wrong with everyone earning an income contributing to help pick up our economy? I really don't get this 'I don't want to pay so someone else should'.

But with NIC everyone isn't contributing.

@Conchita0792 of course you can plan a mortgage. If you couldn’t then they wouldn’t give one out to anyone at all! You would never get up the housing ladder which is of absolute paramount importance these days.
Interest rates have been at an all time low for years and they are unlikely to rise by much anytime soon, trust me.
In any case, we got a longer term fixed rate to combat this.
We won’t lose our jobs because we both trained very hard to get to senior positions in roles that are few employees to be had. For example, do you know how few headteachers there are at the moment? They are so thin on the ground it’s unbelievable esp in bigger city’s.
If one of us were to have a life changing accident or die then we are protected against that too and all the mortgage would be paid off.
As I said my DH lost a lot of his salary due to covid in 2020 which we still managed.

We will afford it just but what I was saying was I think £70-£80 a month is a big jump every month to afford

@Peregrina

What is so wrong with everyone earning an income contributing to help pick up our economy? I really don't get this 'I don't want to pay so someone else should'.

But with NIC everyone isn't contributing.

Exactly that. As a tax paying pensioner I’d have rather seen it go on IT, it would have raised more too.

@OnTheBrink1

I may be missing the point but if you are going to have to pay an extra £900 then that is on £75000 odd [it's 1.25%] - I'd be delighted to have that amount of money and the first £10000 odd is free of NI so it's £85000 odd. I think I could manage.

During the whole of my working life I was always willing - when short of money - to get a second job. Working in a pub and so on. If you do get a second job then the £184 per week from that is free of NI. Unlike income tax where you would - if you have another job - pay 20% on the full amount.

[quote MatildaIThink]@SquirryTheSquirrel
Hawkins001
To also help save, people can look at e.g. Sky packages, virgin, their costas, look at substituting different food brands, minimizing takeaway food, ect, all adds up in expenditure.

I tire of hearing this sort of thing.

Newsflash - many people can't afford those things now. Not everyone has a raft of small luxuries they can cut back on.

Many people do not pay for those things, but many people do. Statistically the lower your income level the more likely you are to smoke for example. Most of the high earners I know do not have Sky/Virgin, they do tend to have Netflix, but Netflix is £12 pcm vs Sky at £70+ pcm. Most of the lower earners I know all have Sky, plus sports packages etc. I do not know why that difference exists but it does.

When it comes to takeaways the evidence shows that these, as well as ready meals which cost more, are much more likely to be consumed by low earners. As well as branded food items which they perceive as "better".

There is a reason behind this, lower income people feel that they derive "status" from these items, where as in higher income groups expensive items, even cars to not increase status, which generally comes from being able to demonstrate property wealth, which is almost unfakeable (where as cars, household items etc. can all be leased, on credit etc.).

I know when things are tight it is difficult, when I was studying for my PhD and my husband was starting his own business at the same time things were incredibly tight, we even got rid of our TV license to save money and we both worked in a bar and restaurant in evenings, firstly for extra money and also because they often fed you on shift (although I know that might not be possible with small children).[/quote]
Hey. Higher income people often do cocaine at a rate of 200 quid a week.

There have been threads on here justifying that.

That is 10,000 quid a year.

@Baystard

matilda you're right about tax but what grates with me is that in Scotland higher earners pay more NI than those elsewhere in the UK already.

That's just not true. NI is the same for everyone in the UK and reduces to 2% when you earn more than £50,270

Looking at the comments, I never understand how people are more scared of what Labour might do than they are of what the Tories actually have done.

Labour under Tony Blair was brilliant, nothing like the incompetent public school buffons currently bluffing their way through. Every small business owner I know has given up exporting to Europe because of the Brexit shambles, and we have empty shelves. 🙄

We've got a health service on its knees because of Tory disinvestment over 13 years, not because of COVID - which has simply been the final nail in its coffin.

This is just another vein being tapped because they know people care about the "nhs".

We won’t lose our jobs because we both trained very hard to get to senior positions in roles that are few employees to be had.

I’m slightly surprised that you both work in senior roles that you trained extensively for and only earn £70Kish as household income. Particularly if your DH as higher earner commutes to a city to do work at double the local pay rates. It means you must be relatively part-time, OP? So the potential is definitely there for you to increase your income if need be.

Yes, it is a stretch to pay extra. But no one should be losing their house over it l, particularly not with 2 earners in senior positions.

Anon, it's always been the same though
Labour equals bad
Conservatives are seen as good and better with the economy.
I'm not saying any of these statements are true as it's much deeper than that, it's just how it's perceived.
Mrs Thatcher was touted as ' a housewife ' when she was anything but, but people bought into it all.
Labour need to win back the working classes many have been lost to them for far too long :(

[quote Thelittleweasel]@OnTheBrink1

I may be missing the point but if you are going to have to pay an extra £900 then that is on £75000 odd [it's 1.25%] - I'd be delighted to have that amount of money and the first £10000 odd is free of NI so it's £85000 odd. I think I could manage.

During the whole of my working life I was always willing - when short of money - to get a second job. Working in a pub and so on. If you do get a second job then the £184 per week from that is free of NI. Unlike income tax where you would - if you have another job - pay 20% on the full amount.[/quote]
Oh my goodness. That made me laugh. A second job 🤣 I have sole responsibility of children 3 after school with no free childcare options. DH works 12 hour days in a senior role which is why he earns so much. We earn 70k not 85k!
Honestly this post has been an eye opener.
I’m not sure if it’s lots of people from further north where things are cheaper or what but in the SE, with the craziness of housing prices, extortionate 5k commute and everything else here 70k with 3 kids really isn’t that much! We pay a huge chunk in tax and don’t qualify for any benefits. Earning anything over 50k and the rest gets swallowed up in tax. I promise you, we are not driving a fancy car or going on luxury holidays. We have no frivolous things like expensive subscriptions. We have phones on a basic contract from Tesco which are 5 years old. We shop in aldi and budget for that. By no means are we really skint but we do sometimes worry how to afford it when the car breaks down multiple times in quick succession or there is water coming through the ceiling for example or one of the kids has a residential school trip coming up.

[quote longue]@RubyViolet my CT went up already with an additional social care charge[/quote]
This is another increase sadly .

@NoSquirrels

We won’t lose our jobs because we both trained very hard to get to senior positions in roles that are few employees to be had.

I’m slightly surprised that you both work in senior roles that you trained extensively for and only earn £70Kish as household income. Particularly if your DH as higher earner commutes to a city to do work at double the local pay rates. It means you must be relatively part-time, OP? So the potential is definitely there for you to increase your income if need be.

Yes, it is a stretch to pay extra. But no one should be losing their house over it l, particularly not with 2 earners in senior positions.

No sorry that was my typo. DH is in a senior role. I am not currently but working part time to be able to look after children after school. I would work more if I had any free childcare but if I have to pay for even 2 of them it is cheaper to look after them myself at the moment. That will change as they get older

We all have to live with these things. I don't want to be paying massive council taxes for things I never use or ever have used. We will all get old, nothing's for free although people expect it to be.

I do think are being unfairly flamed op.
You've explained your position fully now and working too, but there are always mumsnetters who would say ' work harder, work longer' which isn't easy when you have little ones and nursery fees are enormous, which eats up a lot of anyone's income. The irony is if you did work longer you would then become one of those higher earners that everyone thinks should pay more ..
it can become a vicious circle.

@the80sweregreat

I do think are being unfairly flamed op. You've explained your position fully now and working too, but there are always mumsnetters who would say ' work harder, work longer' which isn't easy when you have little ones and nursery fees are enormous, which eats up a lot of anyone's income. The irony is if you did work longer you would then become one of those higher earners that everyone thinks should pay more .. it can become a vicious circle.

Thank you for typing this. I do think some people see ‘oh earning 70K’ and sorry no sympathy you should be giving more’ but what people don’t realise is that so much of that is already taken in tax. If you live in an expensive area because of family then the rent or mortgage will be big in comparison to elsewhere. Also, earning high often comes with a cost. In our case it’s very very little annual leave being able to be taken and even when it is, it’s phones and laptops on hand. The stress can be immense and often impacts on family life. The working hours can be brutal too and often go over 5 days. Sometimes I wonder if it’s all worth it tbh

@anon666 I agree. How people worry about what Labour might have done versus the evidence under their own blinking eyes of what the Tories are actually doing and how destructive they are...baffling.

@beigebrownblue

Hey. Higher income people often do cocaine at a rate of 200 quid a week.

There have been threads on here justifying that.

That is 10,000 quid a year.

Well they might, but I do not know any who do.

My issue with those that do is not the £200 a week, £10k a year or even more, my issue is it funding the criminals. If they can afford it and if it was legal I can not really see the issue.

[quote LadyWithLapdog]@anon666 I agree. How people worry about what Labour might have done versus the evidence under their own blinking eyes of what the Tories are actually doing and how destructive they are...baffling.[/quote]
Most of that was Corbyn, he almost certainly would have been worse that Johnson and he was not trusted.

Last time Labour presented a decent option was Blair, they won three elections in a row. They then offered Brown, who was responsible for some of the worst domestic policies of the Blair era, followed by the wrong Miliband, who was a worse version of Brown, and then as if they wanted to double down on losing they chose Corbyn, who was the least popular leader of the opposition in British history. I think Starmer seems like a reasonable, decent man, but he is not a leader. Against the populist Brexit movement that is the current Conservative party Labour need a different character, unfortunately they do not have one.

@OnTheBrink1 yes, some higher earning jobs come with laptops and phones out - during annual leave, for example. My husband was really unimpressed when I spent an afternoon of our honeymoon on an urgent call. Urgent to the business, not to life! But I gently reminded him that my salary paid for the wedding and said honeymoon.

My sister works two jobs. Both minimum wage. She doesn’t get much annual leave, because when it’s due in one job, she picks up extra shifts in the other. That’s more stressful than my situation.

As for often going over 5 days? That’s not the preserve of the well paid you know! Lots of lower wages people - like my sister - work 6 days week in week out, because they need to.

There are well paying companies who don’t demand your soul - mine is one, which is why I didn’t mind the interrupted honeymoon, they have been good at other times. The thing is - higher paid people often have more choice to find those places.

When I think of all the jobs I’ve down, and salaries, and all those that friends and family have done, with one exception lower salary have been the most stressful. The exception is a police officer.

I think a lot of people who are least remunerated lto reflect the extra stress and hours often forget that lots of people have that WITHOUT the extra money.

I often wonder what would have happened if John Smith hadn't died.

[quote Cocomarine]@OnTheBrink1 yes, some higher earning jobs come with laptops and phones out - during annual leave, for example. My husband was really unimpressed when I spent an afternoon of our honeymoon on an urgent call. Urgent to the business, not to life! But I gently reminded him that my salary paid for the wedding and said honeymoon.

My sister works two jobs. Both minimum wage. She doesn’t get much annual leave, because when it’s due in one job, she picks up extra shifts in the other. That’s more stressful than my situation.

As for often going over 5 days? That’s not the preserve of the well paid you know! Lots of lower wages people - like my sister - work 6 days week in week out, because they need to.

There are well paying companies who don’t demand your soul - mine is one, which is why I didn’t mind the interrupted honeymoon, they have been good at other times. The thing is - higher paid people often have more choice to find those places.

When I think of all the jobs I’ve down, and salaries, and all those that friends and family have done, with one exception lower salary have been the most stressful. The exception is a police officer.

I think a lot of people who are least remunerated lto reflect the extra stress and hours often forget that lots of people have that WITHOUT the extra money.[/quote]
What you say is very true.
I think some people just think that every higher earner is rolling in bed on a blanket of £50 notes but it just isn’t true, esp if you live in the SE in an expensive area- 70k is not the same 70k North as it is in the south