To those on £145,000 plus will you spend or save your tax reduction following the recent budget

[FridayTheThirteeth]

The PM says that giving tax cuts will boost spending and the money will trickle down to the bottom

So if pay the 45% tax will you spend the majority of the tax reduction or save the money.

I think people will save the majority of it.

YABU - they will spend most of it

YANBU - most people will save most of the tax reduction

Won’t they have to spend it heating their big houses and filling up the rangey?

we do NOT have anywhere close to the annual income OP listed.
However, we have some cash savings... and are trying to spend it as fast as possible ! Oh good things, like an investment in DH's company, help DS buy a house, Uni-costs for another DS. Get Out of cash for sure.

I’d Sit on my toilet paper throne, with the heating on full whack laughing at all the cold peasants, but I’m poor so I’ll just starve to death in my freezing house instead

Because of the massive increase in my mortgage, it means not giving up my cleaner/ stopping paying someone to do the ironing/ not having to cut the nanny's hours.

Its a bloody stupid move but it isn't quite as black and white as trickle down is nonsense. We employ local people to do the jobs we are too time poor to do. There's a whole raft of people we pay in exchange for services. If we can no longer afford to, that's a direct impact on those people.

It hasn't happened yet though

Looks like a chunk will be going on increased mortgage/childcare costs. More likely that we won't stop certain expenditures rather than increasing but it amounts to the same thing i guess

Mine will go on the increase in mortgage and bills. But yes it means I wont have to cut elsewhere - restaurants, cleaner, hairdresser, clothes

Save it probably. Not deliberately - as in now we have £500 a year more but unlikely to go, yay us. Let’s splash out.
I disagree with the change. We should pay a higher rate.

It will cover the inflated essential expenses and any extra will go into ISAs and taxable savings for retirement.

Can you see it happening, I think it will get reveresed at some point

Spend, spend spend......

No, their houses are already energy efficient so heating costs are minimal

Goes in the savings account +4% and rising. No brainer really

This.

i think it will be revoked before then.

I’m getting a Brazilian blow dry and eyebrow microblading. Rest will go on increased mortgage.

My high earner brother will put the saving straight into his pension fund.

You'll look fabulous.

If it does actually happen, we will be investing it. Stock market lows are exactly the time to invest, not spend. Although we’ve very little left in UK markets now, so there won’t even be a trickle down that way from us. I doubt anyone sensible will be thinking of buying a new car, resurfacing the tennis court or buying a dozen British made designer handbags with the uplift. That’s why it’s a bizarre policy.

The abolition of the 45% rate does not mean higher earnings are tax-free. It just means they pay 40% rather than 45% above £150,000. Someone earning £200,000 will save £2,500 which is 5% of the £50,000 marginal earnings.

Yes but people earning that much are a tiny % of the population... Would be better to free up more £ for biggest sections of society who eat out / buy stuff in shops.

Trickle down economics has been shown to be BS and I can't believe that it's still being touted as a plausible theory.

You have the capital risk. Short dated Govt bonds have a similar yield to maturity and the profit is tax-free. The risks to bank accounts over the next 24 months needs to be factored in.

Loving some of the answers here. I would say they should stockpile £50 notes to use as toilet roll so that we don’t have another shortage of it.

Save it to pay down the mortgage next year when the lovely fixed rate ends

To be fair, that's quite a bit of microblading.