Active discussions

Meet the Other Phone. Flexible and made to last.

Meet the Other Phone.
Flexible and made to last.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

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:
Sleepdeprived42long · 08/09/2021 22:20

Always wise to build in some leeway to your finances-not easy for lower earners I grant you which is why I feel for them most. If it hadn’t been this, it could have been mortgage rate increase or an unexpected boiler breakdown.

As a middle earner myself, I actually don’t mind paying a bit extra provided 1) I’m going to get a better and more efficient service and 2) my money isn’t used to increase the profits of private care home owners. I have a feeling that I’m probably going to be disappointed…

LadyCatStark · 08/09/2021 22:21

There’s no point in arguing over who has it worse, everyone will be affected and that’s on top of pay freezes, rising food and energy costs, rising house prices etc etc, there’s only so much we can take!

Porridgealert · 08/09/2021 22:24

@longue

I agree it wasn't their fault, but it still has to be paid back

Well i'm confused why the same purse that funded track & trace etc is closed now!

Because it has to be paid back. You can't keep borrowing forever. If we carried on taking out of that purse, with the additional interest rates on borrowing, we'd have to pay even more back in the future.
longue · 08/09/2021 22:25

I was being facetious

longue · 08/09/2021 22:25

We will be paying more back in the future though as this money isn't enough

chaosrabbitland · 08/09/2021 22:26

@MrsKeats

I am sure she has paid tax. But moaning about 17 quid a week is a bit rich. The nhs is on its knees.
the nhs is always on its knees , id personally rather see it reformed like the french or german system , rather than have more money thrown at it which will do fuck all to improve things , it will just vanish the way it usually does when its given money and nothing will change
nannynick · 08/09/2021 22:27

Council tax is my biggest bill and always goes up. I imagine it will continue to increase. NI is going up but there are ways to minimise that... they are not increasing Class 2 NI for example and Class 1 NI has a threshold per employment. Given how jobs these days are not 9-5 Mon-Fri, I am surprised that Government did not do something different, so it affected more people - reducing personal tax allowance and increasing Income Tax for example.

Wages seem to be stagnant, least in my line of work. Food cost is increasing, availability of food is decreasing. Things are changing, we have to adapt to the new norm.

longue · 08/09/2021 22:28

There are what 100k job vacancies in the NHS & more than 100k in social care.

Shadedog · 08/09/2021 22:29

You must have a decent income if a 1.25% increase is £73 a month

It’s not a 1.25% increase. It’s a 10% increase. It’s 1.25 percentage points - a percent of income, not a percent of what you were already paying. If you were paying £100 you will now pay £110, not £101. 10% is quite a lot. The OP must have been paying around £730 before, not £7300. I’m not saying she hasn’t got a decent income but we can’t go around incredulously wondering wtf her problem with 1.25% is.

yummymushypeas · 08/09/2021 22:29

What a ridiculous comment. How do you move your UK based second property abroad? And the UK has the transfer of assets abroad legislation to tax UK assets which are moved offshore where the transferee still derives a benefit.
Also UK residents who are domiciled are taxed on their world wide capital gains.
Perhaps best brush up on the (very complex) legislation regarding capital assets before posting advice.
It's also very likely that the capital gains rates will increase following the significant reduction in lifetime allowance for entrepreneurs relief (now BADR).

longue · 08/09/2021 22:30

I’m not saying she hasn’t got a decent income but we can’t go around incredulously wondering wtf her problem with 1.25% is.

Yep

Porridgealert · 08/09/2021 22:33

@chaosrabbitland
"now hes making sure hes going to count on their votes , still no other bugger in a different age group will be though . i think if you have to go into care then yes your house should be used to fund it , not so it can be bloody left to your grown up kids"

But this is exactly what is going to happen. Theresa May's idea was more generous than this. My mum requires care now and pays for it herself. That will carry on. Soon she'll need to go into a rest home. And she still has to fund that herself. Johnson's plan doesn't leave a larger inheritance. In fact it leaves a smaller inheritance because the cut off level of savings she riscallowed is actually lower than it is now. So you should be happy with the scheme because it leaves well off pensioners and their heirs worse off.

yummymushypeas · 08/09/2021 22:34

That's because companies don't pay CGT. Instead they pay corporation tax on their capital gains. They still pay tax and don't benefit from the same relief as individuals.
You'll probably find that the overwhelming proportion of tax on capital growth is paid by corporates.

Peregrina · 08/09/2021 22:35

I can't feel too much sympathy for people when they are finding money for school fees. I feel much more for those who are already struggling to put food on the table for their children.

Kite22 · 08/09/2021 22:36

Statistically though, not many people earn over £50k. I think less than 15-20%? And those earning £80k are in the top 5% of earners. £50k+ is not the norm based on averages across the UK. And one could reasonably expect that a family with a household income of £80k+ could absorb a £70pcm increase in costs, as rubbish as it may be for them that they have to pay it. The average salary in the UK is £25k-30k now I believe?

Exactly @youvegottenminuteslynn
@longue you seem to be confusing "the working population of the UK", with "me and my friends".
Responsible, graduate jobs with years of experience (nurses, teachers, social workers, paramedics, etc etc) don't earn £50K. Yes, a head teacher might, or a Matron possibly, or some other Head of service, but the vast, overwhelming majority don't. Long before you start looking at the 60% (?) of the working population who aren't graduates.

Once you earn more than £4189 per month your NI drops from 12% to a measly 2%.

I didn't know this. Can anyone explain why this is ?

ChocolateDeficitDisorder · 08/09/2021 22:37

I reckon some more people in England should have voted for Labour back in 2019...

You voted for cheats and liars and now they're cheating and lying to you.

Peregrina · 08/09/2021 22:38

You voted for cheats and liars and now they're cheating and lying to you.

Why is anyone surprised?

Porridgealert · 08/09/2021 22:38

@longue

I was being facetious
Oh. ☺ sorry. I did wonder because you'd made really good points (particularly about young people not having homes to fund their care.) so it did seem strange to make such an obvious comment. Sorry.
longue · 08/09/2021 22:41

@Kite22 my sister is a teacher in London with a TLR & earns 50k ish, my friend is a detective who earns 55k ish.

However you are confusing my point. The wealthiest people don't tend to pay PAYE that is the point so when you talk about how much % you are excluding those who get paid in other forms.

National insurance - pre increase

Someone on 50k pays 4.8k a year
Someone on 200k pays 7.8k a yr

Those who earn more pay less NI.

Porridgealert · 08/09/2021 22:42

[quote longue]@Porridgealert I'm not disagreeing. it's like whinging about footballers, don't watch it, don't buy tickets or tv subscriptions, don't buy merch. [/quote]
A-bloody-men. (In more ways than one! Haha. )

forfucksakenett · 08/09/2021 22:42

@nanbread

The money needs to come from somewhere.

Yeah it does. How about the top 5% instead of those on 20k.

Exactly this. The number of folk defending this is ridiculous.

Attack families earning 70k but no need to bother those lovely millionaires.

DecadentlyDecisive · 08/09/2021 22:43

@ChocolateDeficitDisorder

I reckon some more people in England should have voted for Labour back in 2019...

You voted for cheats and liars and now they're cheating and lying to you.

Hah! If Labour had been in, we'd have been in more debt before Covid started & no better off now!!!

Take the Red Blinkers off for once!!

longue · 08/09/2021 22:43

@Porridgealert no worries

DadDadDad · 08/09/2021 22:44

Once you earn more than £4189 per month your NI drops from 12% to a measly 2%.

I didn't know this. Can anyone explain why this is ?

I'm not sure that's phrased quite right. The 12% rate applies to everyone on their earnings up to the threshold (£4189 sounds about right - haven't checked the number), then anything over that is subject to 2%.

It doens't sound very progressive, but I suppose we should bear in mind that income around that level is moving into the marginal income tax rate of 40%, so overall higher earners are paying more on income over the threshold (20% + 12% jumps to 40% + 2%).

Pinkcadillac · 08/09/2021 22:45

@Kite22

Statistically though, not many people earn over £50k. I think less than 15-20%? And those earning £80k are in the top 5% of earners. £50k+ is not the norm based on averages across the UK. And one could reasonably expect that a family with a household income of £80k+ could absorb a £70pcm increase in costs, as rubbish as it may be for them that they have to pay it. The average salary in the UK is £25k-30k now I believe?

Exactly @youvegottenminuteslynn
@longue you seem to be confusing "the working population of the UK", with "me and my friends".
Responsible, graduate jobs with years of experience (nurses, teachers, social workers, paramedics, etc etc) don't earn £50K. Yes, a head teacher might, or a Matron possibly, or some other Head of service, but the vast, overwhelming majority don't. Long before you start looking at the 60% (?) of the working population who aren't graduates.

Once you earn more than £4189 per month your NI drops from 12% to a measly 2%.

I didn't know this. Can anyone explain why this is ?

As I understand it, you pay nothing on the first £797, 12% on earnings between £797 and £4189 and 2% on the remaining earnings above £4189