Pay to be Poor

[LetterBug]

Got sent into an un- arrangement overdraft and it costs £30. So you are fined for having no money. Meaning when I'm paid I will be £30 down from the off. Meaning I will more likely run out of money again. costing another £30.

Pay to be poor.

The ‘discounts’ for people in high paying jobs go beyond free/subsidized meals. Things like regular new work computers and iPhones with generous international data plans (so no need to pay for expensive tech or telecom contracts), company car allowances, private health insurance that covers things like prescription sunglasses and children’s orthodontia, school tuition subsidies, preferential mortgage rates, etc. Those who travel loads also end up with massive stores of airline miles to use towards hotels, flights, etc. A lot of people who travel regularly for business never end up having to pay for flights or hotels because the accrued miles pay for everything.

[quote MyDcAreMarvel]@BoredZelda
But if properties with key meters are the only ones available to you, in your budget, you can’t choose to replace it without the landlords permission. And ones with key meters are the cheaper properties available. I’ve rented many times over the years and it was only when I was moving out of budget accommodation that properties weren’t key meters.
Any landlord that told you that was acting unlawfully, you can get the meter changed.[/quote]
If the provider will change it.

Many won't, and the almost certainly won't if there's been a debt on the meter in the last 12 months.

Also salary sacrifice schemes, whereby you can get yourself a lovely bike or computer through work or whatever at a hefty discount - but you won't qualify if the amount payable for the scheme would take your take-home pay under NMW - so if you need a new bike (maybe because you can't afford a car or bus fare to get to work), you can have the exact same one as your MD, but yours will have cost you an extra 30% or so over what the boss paid for his.

[quote DameCelia]@Dumbitdown where do people sign up for free food???!!![/quote]
Any job with lots of meetings/conferences etc.

In principle, I find interest charged on insurance premiums terribly unfair. If you buy a policy for a year in January, you cannot possibly claim on the element of the premium relating to future months before those months arrive.

Most people pay annually in advance. As the insurance market is competitive the time-value advantage to the insurer (compared to monthly payments) will be baked into the price, i.e. the price will be lower because of it. It makes total sense to pay interest on the whole price, the interest is compensation for the whole premium not being paid at the outset.

"Many well paying jobs come with free or subsidised work canteens, free business lunches, expense accounts etc."

I get luncheon vouchers. Subsidised canteens can be found in all sorts of workplaces, not just for highly paid people. Anywhere big enough for a canteen really.
Business lunches, 'entertainment' allowances are more for the higher ups. Anyone who travels a lot will either get free food at the events or be able to claim an allowance for them.
While many ordinary office workers put on weight during the pandemic because of staying at home, the top ones probably lost weight because of having fewer events with free food to go to.

This is why I have a Monzo account alongside an account from an high street bank. With Monzo the account balance is automatically updated with every transaction so I know exactly how much money I have available. With my high street bank it can take days before a transaction clears,the only redeeming feature they have added is that they text you if are in overdraft.

@LetterBug

I know my friend lived further than me and if she didn't have money for the bus she wouldn't go. She had 4 months off at one point and we were all surprised she finished school at all. Not a good way to get her put of poverty is it?

Where and when was this? When I was growing up the school bus was free. I presume you were on normal public transport but you mention it being an hour and a half's walk away so wouldn't that have made you eligible for free transport? I think it was 2 miles when I was growing up.

My oh travels a lot with work, mainly U.S, yes he gets free business class flights, free hotel and food/drinks paid for and I can go with him if I pay for my own flight, but he's worked bloody long and hard to get where he is.
And gifts he brings back dont make up for him not being here.
Hate the game, not the players.
And nothing is stopping anyone going for these type jobs.
My husband grew up in a council house, single parent family, alcoholic and useless parents, no support and left school with hardly any qualifications at 16 so he could help support his family by working in a factory

I haven't RTFT but by far the most spectacular perk for rich people (higher rate taxpayers) with some spare cash is the 40%-45% tax break for contributing to a private pension using pre-tax income. Using that alone, you can save £16k in tax per year making investments that you can then access from age 55. You'll pay far less tax on drawdown than you'd have paid on regular income. This ruse enables countless earners of over £50k to pay very little tax on their income above that, while lower rate taxpayers have far less incentive to invest in a pension. Makes a joke of our "progressive tax system and is a fabulous gift to well-off people who know how to work the system.

I disagree that pet insurance is a scam for poor people. Mine is £20 a month for my cat and he broke his leg and needed £3,500 worth of treatment. He’s also picked up an infection since which was £300. Both times I paid £80 excess. I’d much rather pay £20 a month and not face a £3500 bill or have to put my cat down. It only gets worse as they get older too. I’d say it’s actually worse for people who might not be able to afford £20 for the insurance, I’d say they have a pet and then lose their job or circumstances change. Then they’d be forced to pay the massive charges up front or let their pet die.
DH and I both get free lunch at work (education) which saves us so much money, I really notice when the holidays come. We also get free tea/coffee, fruit and biscuits.

Council tax.
Where I live people buy holiday cottages, let them out, register them as businesses and then get small business rate exemption on them so don’t actually pay any council tax.😡
Live in the area however and a two bed terrace with no parking costs £1800 per year on band C and a three bed detached with parking, garage, garden , you know the standard estate type house is band E £2700 per year. Unaffordable if you are, like me, on a lowish income. It would be more than 10% of my annual income.
I’m actually financially ok but that’s because I’m careful about the bills!

"We had our annual team meeting and got one doughnut each as a special treat."

That made me laugh a bit. Let them eat doughnuts.

"Senior management get nice sandwiches, fruit and cakes for their meetings "as they have to work over lunchtime." Our staff meeting is also over lunchtime and they graciously allow us to bring our own lunch along "

I have to admit that at my work, we do get the bosses' leftovers.

@TheLightSideOfTheMoon

When we moved and had a garage a chest freezer was one of the first things I bought. £60 at Iceland can fill it if I do it right.

I also bulk buy household stuff now I have space to store it. Saves me loads and I don’t have to worry about running it.

I think storage space is a privilege. I couldn’t have done this before.

I agree about space being a privilege. We now have loads of space meaning I can stock up on bulk goods, a chest freezer etc. I use Costco a lot, was a godsend when they children were in nappies!

"This is why free banking has to stop. The poor are subsidising the rich."

So poor people would have to pay monthly bank charges as well as overdraft charges?

"unless there are very low priced rentals out there (im in north west and cant see any)."

My last rental in the UK was in a medium sized city and 450 for a small one-bedroom flat. It was that price because I'd been renting for ten years. I don't think I would have been able to buy it.

This is so true, as is money breeds money.

The more money you have the more chances & risks you can take with investments & the more interest you get. The bigger deposit you have the lower mortgage interest you have to pay, leaving you more money to invest further and take greater risks and make more money.

The higher you go in business, the more people you know, the more back scratching goes on and the more freebies you have the opportunity to benefit from and the more perks come with the job. Company car, private health insurance etc. and whilst these are taxable they are still much cheaper than if you had to but them yourself.

Been on both sides of the fence and in the middle and I know which side I prefer being on.

"I would advise anyone who can afford it to invest in quality now, because you never know when things might change,"

It's a tough one. You don't want to be starving but carrying an expensive bag.
I also think that even when people can afford to buy quality they may not actually wear the same coat every day for twenty years, for various reasons.

"I agree about space being a privilege. We now have loads of space meaning I can stock up on bulk goods, a chest freezer etc."

Yes, I shop on foot and have a small home so can never buy a big packet/bottle of anything. I think I still save money not having a car though.

@Wokahontas

I realised this a few years ago too. If you are poor, you end up paying more.

It hit home with me when I got a puppy and was talking to the vet. I couldn't decide whether or not to get pet insurance. My DH says it is a scam. My vet asked if I could afford a £500 bill and if I could, not to get insurance, otherwise I needed to get it.

So, I would have paid £900 so far in insurance since I have had my dog. I have only ever had to pay out £100 at the vet for a problem, so I would be £800 worse off, if poorer.

But that's just luck. Our dog has cancer. The tests and scans and chemo are costing thousands. Far more than the premiums we have paid over the years.

Agree re luck and pet insurance.

I paid for my dog and my now deceased cat. My dog has never needed much beyond teeth cleaned but the cat got loads of treatment in her last 6 months I could never have afforded. And the insurance paid for her to be cremated and we got her ashes back in a wee box.

It pays to live somewhere affluent too. I live in a small village and we have a Facebook mums group. People give away loads of good quality things for free or a nominal price. £10 for an outgrown bike, £20 for a John Lewis cabin bed, £5 bag of next baby clothes, free high chair, free GCSE revision guides, free good quality winter coats/ boots in the spring, July comes and everyone offers their outgrown school uniform, children's books, on and on.

I often think about the bigger town 5 minutes away where people don't have as much money and you'd never find anything good being offered for free. It is bizarre that the people who don't need the free things are the ones who have access to them.

Prepayment meters are the one from my childhood.
I was incredulous to find we'd been paying a higher tarriff just to enable us to budget. So sad and unfair.

LetterBug

Actually thinking of school, I spent a day in isolation because my shirt was dirty and I didn't have another one. I wore black trousers but not school trousers. I spent the whole day in isolation doing bare minimum near my gcses because we could only afford one skirt. I remember feeling embarrassed that the teachers thought I was purposely making a fashion statement.
Big giant hugs to you and sorry the teach ed re didn't have any common sense

Banks cannot charge overdraft fees any more.

Since April 2020, overdrafts have been paid for via interest. Banks charge 40-50% regardless of whether the overdraft is "arranged" or not.

Most banks cap the amount they charge. HSBC cap at £20 for all overdraft interest. Barclays, you would have to be overdrawn by £1200 every single day to be charged £30 interest for the month.

OP if you have genuinely been charged £30 for going a little over your limit for a few days, you can absolutely save money by switching to a different bank. But it seems more likely that this is a charge for something else, unless your bank is breaking the regulations in which case please report them to the FCA.

www.fca.org.uk/data/changes-overdraft-charges