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?

@longue

When you are earning massive amounts, then you should be able to absorb £73pm without it worrying you

2 earners on 50k each are not earning massive amounts. The issue is many or the actual 1% aren't on PAYE.

Ahhhh MN, the only place where someone can write ‘ 2 earners on 50K each are not earning massive amounts’ and not realise how ridiculous this sounds.

@BlueGreyElephant

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...

This is very upsetting, my mother did the same for us when we were little.

I’m so angry that people like you are having to fund the rich being able to pass down their vast wealth to their children.

It feels like a big amount to find in my house too. I'm a single parent and a teacher. We've been on a pay freeze for about ten years, had a rise last year, now frozen again. Measured against inflation, which has been significant this year especially, it's a pay cut. Now this.

I know we're paying for covid but I didn't cost anyone anything, just worked every day as usual. It feels wrong to complain, given the reason for the rise, but it is a noticeable monthly amount in a budget that's already tight here.

For anyone who is worrying about affording this extra, you can earn extra money without taking on another job. Head over to the earn £10 a day thread on the money matters section for ideas. I used it while on mat leave and was great to earn a little bit extra.

They've not really considered alot of people have lost their jobs during the pandemic too so they're down to a single income and are now losing money to pay for something they'll never benefit from.

@Hawkins001

For some families, cut back on certain expenditure, e.g. Sky or virgin, netflix, those £3 coffees or drinks each day, shop at Aldi or lidi , rather than e.g. Waitrose, ect

I know not all of these apply to all, but it's points to look at

I know what you're saying but I'd rather buy coffee and Netflix with my money than give yet more in tax, especially when I have no confidence that it will be spent wisely or make a difference.

@Babamamananarama

And this is on top of the forthcoming big hike in fuel prices and ongoing rising food prices. A lot of people are going to be feeling the pinch.

These extra costs will impact on anyone who is surviving on a fixed income. I give you - the old age pensioners (without generous pensions) , the single parent, the single person and anyone who is currently working without children and no bank of mum and dad or possibility of an inheritance. I think the OP is unfortunate that she is faced with extra cost but I would suggest that the solution relies on cutting out something that is non-essential - we will all have to do this over the coming years.

To be paying at that level, you have a household income around 70k.

I'm more concerned by the people at the other end of the earning spectrum, sorry.

This. I don't know how to vote because yes i am concerned about some people but not people on your income. Tone deaf post

@Maverickess. No, I did inderstand what you said. You recognise that the the extra payment is necessary but you don't believe it will be used in the right way. Hence you said, I wouldn't begrudge paying it if....I just can't see it happening. The only inference that can be drawn is you don't want to pay it. Everyone can rationalise about not paying and I'm not implying that people are lying about their rationalisation.
The mantra of there's no point doing anything because it won't work is what govt's of the past 30 years have followed. And look where we are now. At least they're trying to tackle it. Will it work? I don't know but it's a conversation now that everyone has to start partaking in. The other political parties can't duck it now. Hopefully they'll come in with ideas to help, amend and improve what's happening.
I use care staff for my mum and you are all bloody fantastic. I really do thank all of you. You've had a bad experiences because of your employer so I understand your mistrust and frustration. But there has to be a point when we acknowledge that we can't hold off tackling the problem any longer. Having tried to navigate my mum through the social care system, I'm thinking this is as a good a time to tackle it as any because each year we leave it, it's only going to get worse.

If people think this is bad just wait until the base rate goes up so your mortgage does.

Or until they start building a whole whack of social housing for the working poor, who will then no longer rent flats from the rich property owners and property conglomerates, thereby forcing down the value of houses, possibly to the point they are in negative equity for those who have stretched themselves to the max.

And you think you’ve got problems now!!!

Me, I earn £20k, live in a shithole and yet I’m happy to contribute more to help those less fortunate than myself. The money has to found from somewhere. My contribution will likely be about £13 a month or so. I feel I can manage that. Just. I get no benefits as I earn too much. And have no partner to subsidise me.

If I can afford it so can those earning more than me. You just have to reprioritise. Perhaps buy clothes in charity shops and cut back on other expenses, shop at Aldi like I do.

@BlueFairiesinthesky

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

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.

I’ve just done gas and electricity also. Was shocked by the extra - huge! Was planning to start charging my 19 year rent from this month and glad I am now due to the increase in NI and gas/electricity prices.

@DigitalGhost

They've not really considered alot of people have lost their jobs during the pandemic too so they're down to a single income and are now losing money to pay for something they'll never benefit from.

If you live long enough, you'll benefit from good social care.

@Standrewsschool Shocked is the word!! I looked 2 days ago and didn’t switch because I was so shocked but I really must as I see the price keep going up!!

Mortgaging yourself to the hilt, in a low interest climate without any wiggle room was clearly a financially illiterate decision it seems.

From your post OP, a small raise in interest rates could have had the same impact on you.

Have you both considered reducing pension contributions by a percentage point? That could help with the shortfall.

If you don’t make pension contributions then that won’t help. Although the state pension funded by taxation should be available to you in later years!

It should go on income tax and we would all pay it. I'm retired and comfortable with my pension and mortgage paid off. I think its unfair to go on NI. Happy to pay more income tax, and so is DH. This is pretty shitty.

When I saw the epic waste and spending spree the Tories were on last year, I knew this was coming. We are going to be paying for this for decades. Covid has made the rich richer, and Tory donors and friends have done very well put it.
Just one (of no doubt many more) examples
www.thetimes.co.uk/article/ministers-waste-150m-buying-unusable-masks-from-banker-5v8390xtp

@Pixxie7

What I don’t understand is that the government pays NI for the unemployed so surely this is going to significantly increase the welfare bill.

Our benefits and state pension schemes run on a pay as you go system.

People in receipt of certain benefits get a credit - they are treated as if they had made the payments but in practice no money changes hands. The govt doesn’t actually make payments on their behalf.

I would rather we halved NHS provision and made parents pay towards state schools really than have all these extra taxes.

Both Labour and the Tories are high spending parties so we are being given no real choice at elections for those of us who favour a small state and low tax (other than move I suppose).

Ahhhh MN, the only place where someone can write ‘ 2 earners on 50K each are not earning massive amounts’ and not realise how ridiculous this sounds.

It isn't massive. A partner at a MC law firm will earn between 1-2m that's massive. Lots of very normal jobs pay 50k

I'm starting to get rather concerned about living expenses as it is. Lone parent of one child earning not much over £20k working full time.

Food is more expensive
Utilities are more expensive
Petrol is more expensive.
I know my rent and council tax will go up in April like it always does.
Now an NI rise and tax rise the following year.

Not like I made any amazing savings during the pandemic being a front line worker in the community using my car to travel around!

Life is rough. Good job we like pasta in this house!! 🤦🏻‍♀️

So when you vote in Labour next time and income tax goes up by 3% you're fine with that then?

At least they'll probably be honest about it, unlike the lying thieving bastards who are currently running the economy into the ground. Just wait till Brexit really starts to bite, watch the slime excuse their way out of it and get the poorest to pay for it yet again. It's the tory way.

It’s an unfair tax on the poor that’s for sure. There are so many families who are just about managing in this country and this awful awful tax will push so many over the edge. It makes my blood boil 😡😡😡

I’m fortunate enough to be able to afford to pay it but to some families this will mean they haven’t got enough left over for food, or spare change to pay for their children to have small treats like an ice cream on a day out or gold forbid be able to pay their rent or mortgage. It’s a cruel tax.

Companies like Amazon have benefited MASSIVELY as a result of lockdown and if the stories I keep hearing about large companies not paying their fair share of tax is true then THEY should pay towards the costs of COVID.

However instead of taxing the rich and the massively rich corporations more, they choose to pick on the little people.

I feel like the wool has finally been pulled from my eyes. The Tory party doesn’t care for normal people. All they care about is the economy and their ultra rich friends.

Did anyone see the footage of Boris delivering his speech in the Commons. How sheepish did Sunak look sat behind him? I wonder why? Could the decision have been taken out of his hands I wonder or was he afraid of the inevitable backlash?

I keep hearing stories in the news about Boris not ruling out more tax rises. I’m convinced more taxes are in the pipeline and he is drip feeding this in order to test public opinion. Imagine the uproar if they announced all the tax rises in one go???

You know when you were all cheering on lockdown, clapping for the NHS while it stopped providing services & were trying to keep your grandparents alive until they're 100?????

Well now it's time to pay!! If you didn't realise a tax hike was coming, you were living in cloud cuckoo land!!

At least this one hits the pensioners too though.

Incredible that the OP is castigated for being profligate but we should be happy to pay money so Dido can have her billions.