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Original poster

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

540 replies

OnTheBrink1 · 08/09/2021 18:51

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?

OP posts:
jenkel · 08/09/2021 19:56

We worked all through covid, no furlough for us, I thought all the way along we are going to be paying for this for years to come, a little bit sickening when we worked so hard, no benefits for us, no 1 year paid holiday for us, in fact dh is a contractor, has no paid holiday, no sickness entitlement and pays both parts of the ni, employer and employee, ir35 to thank for that. I have no doubt that the nhs and social care needs a massive injection of cash and rethink, but the nhs is a juggernaut, it is too big to be controlled, it is just going to be swallowed up and I honestly think it will make no difference in the long term. 3 years, 6 years, 9 years down the line we will be in the same situation, just paying more tax for the privilege. A cash injection and possible a total overhaul of the management of the nhs and social care will work but that won’t happen as it’s too difficult.

Maverickess · 08/09/2021 19:57

You know what @Cocomarine although it's going to have an impact on me financially in an essential kind of way, I wouldn't begrudge paying it if it meant that we had more staff to provide better care, that I didn't walk out of each shift feeling like I've run a marathon and still haven't managed to meet everyone's needs in the person centred and dignified way I am supposed to and want to.
Less stress and better outcomes for the residents would be worth it to me, I just can't see it happening, so I'm going to be paying for my employers profits to go up, direct from my wages now, talk about in one hand and out the other!

longue · 08/09/2021 19:57

It doesn't even make sense because on one hand it's to fund much needed pay rises in the NHS & social care but then it will just get taken off them by this levy.

longue · 08/09/2021 19:57

@Maverickess exactly

caringcarer · 08/09/2021 19:59

All the people who received handouts during the pandemic through grants and furlough, it was inevitable taxes would have to be raised to pay the debt back down. I am more upset about £86k cap. That means some people with low value houses such as £75k will need to sell their home for care.

longue · 08/09/2021 20:00

Yes the cap should be a % & I think I heard on the radio that the 86k cap doesn't include all costs.

Tbh it's not even covids fault, this has been coming ore pandemic.

caringcarer · 08/09/2021 20:02

No only care cost so not cost of room, food or cleaning.

Sobeyondthehills · 08/09/2021 20:03

I figured it to be roughly a week's worth of electric for us, we are already struggling, so have no idea how we are going to pick between electric or food for one week.

I feel for those already using food banks and just don't have anymore to give

longue · 08/09/2021 20:05

No only care cost so not cost of room, food or cleaning

So the bill will be higher?

mobear · 08/09/2021 20:05

@longue The cap only includes care costs, not accommodation and other costs. For example, my grandmother’s care home is £8,000 a month (privately funded) but I think only 1/2 of that is ‘care costs’ so it would take her nearly 2 years to hit the cap even though by then she’d have paid in excess of £180,000 to the care home.

vivainsomnia · 08/09/2021 20:08

Sorry OP but if you worked out your budget and the mortgage you could afford not taking into account a safety net of at least £100 a month, then the error is how you budgeted.

An increase in tax was always a possibility with many other things you might need to start factoring in. No-one likes to pay more tax, but to stretch your budget to the max and then say you can't afford it is an error on your behalf.

cookingisoverrated · 08/09/2021 20:20

The money needs to come from somewhere.

Yes, it does. but not from hard working people who are scraping by and aren't able to save much so rich people can pass on their wealth to their children.

StressedAF · 08/09/2021 20:22

Sorry I might have this wrong but the comment about people losing homes doesn’t quite ring true. When we bought 7 ish years ago mortgage interest rates were around 5% an awful lot more than they are now.

Did the bank stress test your income when you applied?

I agree it’s not great but I would prefer to pay extra in NI so everyone can access healthcare through the NHS. If we moved to an American style private health care system with insurance, we’d likely pay more in NI to insure the family and even then insurance doesn’t cover everything. In the US some people end up going bankrupt and losing their homes to pay for health care. My friend who used to live in Texas told me she begged her sons nursery not to call an ambulance because she couldn’t afford it, that contributed to her reasons for moving back here.

maddening · 08/09/2021 20:25

Op regardless of the right and wrongs of the argument can you look to sell items etc or earn some extra cash eg get some hours at the pub?

Porridgealert · 08/09/2021 20:27

@Maverickess

You know what *@Cocomarine* although it's going to have an impact on me financially in an essential kind of way, I wouldn't begrudge paying it if it meant that we had more staff to provide better care, that I didn't walk out of each shift feeling like I've run a marathon and still haven't managed to meet everyone's needs in the person centred and dignified way I am supposed to and want to. Less stress and better outcomes for the residents would be worth it to me, I just can't see it happening, so I'm going to be paying for my employers profits to go up, direct from my wages now, talk about in one hand and out the other!
No one minds paying more until they have to pay it. And then people start scrambling round looking for reasons why it shouldn't be paid.
NoSquirrels · 08/09/2021 20:28

No one likes extra tax, and I am not happy that this Tory shitshow government has imposed an extra on a regressive tax that will affect lower earners disproportionately.

But that’s not you, OP. If you can’t afford an extra £74 pcm by cutting back somewhere on your income, you are budgeting wrong and you totally overstretched yourself and the bank didn’t stress test your mortgage enough.

If you needed to pay private healthcare premiums for your family it would cost you much more.

MaskingForIt · 08/09/2021 20:32

@Mantlemoose

Try having an unemployed DP as well but no benefit entitlement as I earn too much. Not just that but have to pay his NI put of my wages Not even bloody married!!
What? Why on Earth are you paying his NI if you’re not married (and want to be)?!
Porridgealert · 08/09/2021 20:32

@cookingisoverrated

The money needs to come from somewhere.

Yes, it does. but not from hard working people who are scraping by and aren't able to save much so rich people can pass on their wealth to their children.

Please explain to me how I will get an increased inheritance out of this? My parents will still have to pay care home fees. And the threshold that their assets have to go down to is lower now than it was before. Actually we will receive less money in inheritance. If you know different, please educate me.
BlueFairiesinthesky · 08/09/2021 20:33

I think the OP is talking about 2x £40k incomes, the increase will be average for a 2 parent middle class family on decent but not high wages.

Just wait until you all go to renew your gas and electricity tariff. I got a shock this week! £50 more a month for the best deal available Sad

So yeah we need to find an extra £120 a month. We live in an expensive part of the country where housing costs and childcare are very high.

We will have to forgo the £100 a month we put into our ISA, which we’re saving for children’s university and our retirement.

It’s really shit.

BlueGreyElephant · 08/09/2021 20:33

Try being a single working parent who already skips meals so they're DD has shoes for school.

I literally do not know how I will financially cope...

Porridgealert · 08/09/2021 20:35

Op, there's a reason you never live to your full means. What will you do if mortgage rates start to rise which they often do with inflation. Surely you have left wriggle room for this?

PersonaNonGarter · 08/09/2021 20:37

Many, many people have to live to their full means.

Original poster
OnTheBrink1 · 08/09/2021 20:37

@StressedAF

Sorry I might have this wrong but the comment about people losing homes doesn’t quite ring true. When we bought 7 ish years ago mortgage interest rates were around 5% an awful lot more than they are now.

Did the bank stress test your income when you applied?

I agree it’s not great but I would prefer to pay extra in NI so everyone can access healthcare through the NHS. If we moved to an American style private health care system with insurance, we’d likely pay more in NI to insure the family and even then insurance doesn’t cover everything. In the US some people end up going bankrupt and losing their homes to pay for health care. My friend who used to live in Texas told me she begged her sons nursery not to call an ambulance because she couldn’t afford it, that contributed to her reasons for moving back here.

Yes it was all looked at in great detail when we moved at the end of 2019. But interest rates were very low then and we got a fixed mortgage anyway so we would know the cost for years.
OP posts:
BlueFairiesinthesky · 08/09/2021 20:38

All the people who are questioning the budgeting skills of the OP. WHAT PLANET DO YOU LIVE ON?! Housing is incredibly expensive for those who have bought recently, it’s crippling. I bet you’re sitting on a nice load of equity. Often their is no choice. Renting is more than a mortgage and not secure.

Porridgealert · 08/09/2021 20:39

@caringcarer

All the people who received handouts during the pandemic through grants and furlough, it was inevitable taxes would have to be raised to pay the debt back down. I am more upset about £86k cap. That means some people with low value houses such as £75k will need to sell their home for care.
Is that right? I thought the care costs were sort of a lien against the house for after it was sold. I'm not sure anyone would be made homeless.