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?

I really don't know how you can say this. shock
Inheritances are given to the inheritors of the 'wealthy pensioner'.
I am sure you must know that 'wealthy pensioners' - which assumes they are not on circa £12k per annum like many pensioners - could well afford to buy their own care rather than rely on the social care budget.
I would suggest that instead of blaming a generation for what you don't like - you consider that nearly half of social care spending goes on working age and under people who have disabilities or illness.
In this case - payment is met in full by the local authority from the social care budget as there are no assets to use.
In addition the 'not wealthy' pensioners require their care to be fully-funded.
Wealthy pensioners are not the ones being paid for by working people and the young.

This. There’s an assumption throughout this thread that we’re paying the increase for the benefit of ‘wealthy’ pensioners’. My mum worked all her life - didn’t have the option of a private pension and so relies on the state pension. She and I bought a house together some years ago and in the event that she has to go into full time care, that will have to be sold to realise her half in order to pay for the care. It’s not a mansion, it’s a three bed semi worth around £200,000. And has no one even considered that the proposed cap on care costs will be beneficial to themselves in the long run ?

Paying NI (class 1) or having the equivalent credits for being a parent or earning below the threshold (topped up with benefits) entitles the person to

State Pension (if sufficient years NI are paid)
Contribution-based Jobseeker’s Allowance
Contribution-based Employment and Support Allowance
Maternity Allowance
Bereavement Support Payment

this is why pensioners previously did not pay NI as most of the above are not relevant.

I would mention that pensioners are liable to pay income tax and council tax if their income is even slightly above the new state pension level

So many of you seem to be under the impression that the changes mean pensioners are fully paid for their social care.
Even with the proposed cap - the individual has to spend (from any income/assets they have) around £400k for board and lodgings in a care home before the £86K cap kicks in.
Just to add like other groups - pensioners received no temporary uplift in their income to cover the extra costs during the pandemic. Yes - I know there are mega rich pensioners but many who live alone find making ends meet difficult living on a fixed income.

bunnybuggs@ well said but I don’t think people will really appreciate the difficulties some pensioners face. They are convinced that all pensioners are loaded.

The thing that is not fully appreciated is just how much social care is now provided privately - both in care homes and with people coming to your home. It won't be any good putting money into this sector if it's just creamed off in profits. But what did Johnson and cronies have to say about reforming this? B*gger all as far as I could see.

@Peregrina

The thing that is not fully appreciated is just how much social care is now provided privately - both in care homes and with people coming to your home. It won't be any good putting money into this sector if it's just creamed off in profits. But what did Johnson and cronies have to say about reforming this? B*gger all as far as I could see.

Exactly, until social care is reformed and people come before profits, care won't improve. But people seem so utterly caught up in where the money is coming from, no one gives a thought to where it's ending up.

And don't forget, gas and electricity bills are going up quite a bit. Even Billingtons sugar (to name but one of a variety of foodstuffs) recently went up from £2.05 > £2.40 😲

@LoisLane66

And don't forget, gas and electricity bills are going up quite a bit. Even Billingtons sugar (to name but one of a variety of foodstuffs) recently went up from £2.05 > £2.40 😲

I'm currently doing a financial audit and overhaul. My monthly direct debit will be 30% higher in October than it was in February (gas and electricity). I can suck it up but it means cutting down on discretionary spending. 30% is a massive amount for those living hand to mouth.

@LoisLane66 yes my Money saving energy Best Buy for fuel is an extra £50-60 a moNth!! yoghurt has gone up from £1.85 to £2.40. I’ll still buy it because it gives me 7 day’s of breakfast and is healthy, but a good illustration of the rising costs.

I’ll be cutting back on...
Lunch/ coffee out at favourite local cafe affecting a local family owner and their lovely staff
Takeaways with local restaurants (delivery) affecting 2 family businesses
My local florist subscription (sole trader, mum who only started up recently and is already great vfm)
Cancelling extra time at after school club which employees local women

The ramifications of my actions x 100s of other families in my local community cutting back = catastrophe for these family businesses and staff on relatively low wages. I feel awful but have to put my family first

I don’t feel sorry for the dent in Amazon business though, except the delivery drivers. I hardly buy from there because I prefer to keep my money in the local community if I can.

I'm expecting council tax to go up in April too. Can't switch suppliers though.

I think this will all backfire on the economy... lots of people will less income to spend on non essentials = significant job losses in retail and hospitality

www.bbc.co.uk/news/business-58519997

Food shortages are going to put upward pressure on food prices too.

I think we are in for an expensive time over the next few years.

I don't know how you think you know that interest rates will not go up. They cannot possibly remain as incredibly low as they are now.

You chose to have 3 children so that is extra cost plus you could have a smaller house with less children.

Do people never think what the future may hold?

The personal NI bill …. DH and I can cope with that…. BUT the increased employer NI bill for my employers is going to be an issue. Our funding is set for next year and there is already a real terms cut… the increased NI bill means we may be looking at MORE redundancies…………

I think the OP is being unfairly lambasted for not having predicted a global pandemic. Most people do think about contingencies when planning a major purchase such as a house move, but in general you only have to plan for EITHER a reduction in salary due to job loss or ill health OR a cost of living rise somewhere OR a tax increase. Not all three happening together, on steroids, across the board because of a once-in-a-lifetime event.

Interest rates will definitely go up. The current inflation rates make it inevitable.