Page 22 | AIBU Income Tax rise.

H202too · 2025-10-30T09:56:34+00:00

To be panicking about income tax rise. Things are tight and to loae even £30-60 a month will be difficult. I know people are talking about the mansion tax being a no go. But I would prefer this than taxing the workers as per usual. The tax free rate should be put up. What a mess.

222days · 31/10/2025 15:13

Pluto46 · 31/10/2025 09:16

@222days what would be your definition of a wealthy pensioner ?

As set out in earlier posts, the figure I quoted (a saving of £80-90bn per year) is based on tapering away the state pension to reach zero only when the pensioner has an independent income at the PLSA “moderate retirement” income level.

This is uprated annually for inflation and based on robust research by Loughborough University along with actuaries and pension experts. The current level is £31,700 for an individual after tax and housing costs (i.e. disposable income just for bills and food) or £43,900 for a couple.

I don’t think anybody can argue that people with that level of disposable income require over £1000 of welfare per month. That’s £2,641 for a single pensioner or £3,658 for a couple left to spend after tax and housing costs. Such a means-testing and tapering system exists in Australia (who used to have a system based on ours but actually took appropriate actions to reform it) and it works very well.

https://www.retirementlivingstandards.org.uk/

It is a generous amount designed to cover the cost of a car, house maintenance, eating out regularly, foreign holidays every year, etc.

Note that after tax (assuming no contribution to their own pension at all and no student loan repayments) someone of working age earning the average full-time income of £37,500 per year has net pay of £2,453. From this, they must often pay very large housing costs which are likely to take up 30-50% of their net income, and in many cases they are also paying childcare which can be as much as a mortgage/ rent.

It’s simply not arguable that it’s necessary or reasonable to prevent necessary funding of schools, higher education, infrastructure and energy generation (lack of which is having a huge impact on the economy due to some of the highest energy prices in the world making our businesses uncompetitive) and industrial strategy so that we can give welfare to people with higher post-tax incomes than the post-tax earnings of the average full-time worker, who also has to pay for housing from this! These pensioners are perfectly capable of having a very comfortable standard of living without state welfare and to demand it, to the detriment of the other 85% of people in the UK, is egregious in the extreme. Removing this welfare from them would cause zero poverty and would provide the necessary funds to transform our economy.

Home - Pensions UK - Retirement Living Standards

Home - The Retirement Living Standards have been developed to help us to picture what kind of lifestyle we could have in retirement.

https://www.retirementlivingstandards.org.uk/

222days · 31/10/2025 15:15

dressinggowns · 31/10/2025 14:22

Why not advocate for politicians to give up their pay and benefits, end support for healthy, working-age individuals, discontinue state benefits and free services for illegal immigrants, eliminate free perks for prisoners, ensure that aristocrats contribute their fair share of taxes, reduce unnecessary public sector expenses, and promote smarter financial management across the board?

What support would you abolish for healthy working age individuals! And where can I get some of this support?

It was yet another post devoid of any economic understanding sadly, with no grasp of the size of these expenses as a proportion of total public spending. More misdirection and hobby horses.

222days · 31/10/2025 15:16

dressinggowns · 31/10/2025 14:25

Rachel Reeves and Starmer vowed not to raise taxes, but instead, they should have committed to Labour members giving up their salaries, perks, and properties to fund the gap.

This would raise billions?! 😆

It’s laughable isn’t it.

This is the level of “debate”.

This is why nothing changes.

222days · 31/10/2025 15:19

BIossomtoes · 31/10/2025 13:41

The BTL mortgage is paid by the tenant. I rented my parents’ house for a short period. Obviously the house cost me nothing, the hassle was minimal and it appreciated during that time. Zero hard work, zero risk. It’s money for old rope.

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These comments are so silly.

Do you expect clothes shops to give you free clothes and supermarkets to give you free food? Do you pay your electricity bills? If you lease a car presumably you’d expect to pay for this not be given it for free? Why do people think that houses should be free?

ThatLovelyPuppySmell · 31/10/2025 15:20

222days · 30/10/2025 23:20

Worse, actually.

Much less of France’s debt is index-linked. Their main issues are labour market rules and public pensions which most sensible people in France do accept will have to be changed, despite the French being more militant than the UK population so the inevitable ruckus it will cause (!!).

In the UK the public are far further behind with accepting that the state pension ponzi scheme has gone far beyond a joke. Every time it’s discussed there’s still this “oh the poor pensioners” nonsense even though means-testing wouldn’t affect anybody remotely poor at all. The “I paid for it!” nonsense when the vast, vast majority of them most certainly didn’t pay anything like what it is costing and all they did was pay the legally required tax so that they wouldn’t go to prison. Many, many paid little or nothing at all. The pretence that it’s not a benefit: the irony that you see the vast majority of comments about welfare and how it should be cut being made by pensioners who are by far the largest recipients and when this is pointed out they say “oh, I didn’t mean cut my welfare!”. The pretence that there was some kind of “promise” or “contract” to pay them when it has always been absolutely clear in law since the NI Act in 1948 that this is welfare and it’s subject to change in eligibility criteria etc depending on affordability like any other welfare payment.

Then the apparent horror that the personal allowance might fall below the state pension threshold when the personal allowance in the UK is double or triple what it is in most countries and they don’t have a right to receive welfare tax free. Or the “it never occurred to us during our working lives that we should save any of our own money to fund our retirements even if we had good jobs. Young people should be doing this though, while also paying for our early retirements, otherwise they are irresponsible! Make them pay our pensions otherwise how will we afford our cruise next year? Just tell them they’ll have to pay for us but won’t get one themselves! (And also thanks for the chunk of cash they’re now paying 5% interest on to buy the house we paid for with peanuts which we’re also using to fund extra holidays. And look at our new car! If only these young people would work harder. So lazy.)”. And on and on. All utter rubbish and they know it and politicians need to call them out. They ran the country and its infrastructure into the ground during the greatest economic boom in recorded history, mismanaged the economy, made no provision for the future at all, and now the piper must be paid.

Nobody is suggesting removing money from the poorest pensioners. But we certainly shouldn’t be paying out £35-40bn per year in welfare to people who are millionaires, and another £40-45bn to people who have annual incomes far exceeding those of the working-aged population. While also exempting them from NI when they are the highest users by far of healthcare and social services.

This cohort need to accept that their children and grandchildren - who have no hope of the same standard of living/ homes/ retirements that they have been able to obtain with the same occupations/ levels of qualification - cannot continue funding extra holidays and luxuries for the wealthy in their cohort far above anything they can afford for themselves while working full time.

The stranglehold that these very loud people have had over our economy and politics cannot continue and is the reason that everything that could generate growth like infrastructure and education is so underfunded. They could have fixed the ponzi scheme much earlier, like they did in Australia, but chose not to do so. The chickens are now home and ready to roost and quite frankly, this nonsense won’t wash anymore and politicians need to stop being scared of them.

Apparently the age of the average Conservative voter is now over 65. Who do they think is going to be voting for them in 15 years’ time? Labour are terrified of them as well, see the WFA debacle. But if you actually look at population data, they are no longer a majority. If the effect that this stranglehold was having on the economy and everyone else’s living standards was explained clearly to the rest of the electorate then I am pretty sure they’d agree that impoverishing 85% of the population (and all future generations) to please 15% of people who mostly do not need to be absorbing 50% of public spending and rising is not reasonable or sustainable. As would anybody of that generation themselves who is a remotely reasonable human being.

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The problem is the next generation coming up for retirement have been looking forward to getting what their parents had/have, so are also not going to be happy. That's more people voting against it.
One of the things keeping me going at work is knowing I will have state pension and private pension so could retire a bit early.

222days · 31/10/2025 15:25

Allergictoironing · 31/10/2025 11:13

One of the problems with means testing is that the base level, after which these benefits are cut, rarely seems to be set at a realistic level or take personal circumstances into consideration.

An example of the failure to take circumstances into consideration is unemployment benefit, this is the same for everyone then other benefits are added on top depending on eligibility. But the eligibility is very black & white e.g. rented home or not. If you rent, your rent is covered up to a reasonable amount, but if you own your mortgaged home you get no assistance with that at all - I'm not talking about anything towards the capital, but assistance towards the interest alone would seem to be fair to me especially as that is often less than any housing benefit would be to renters.

Take 3 different people, all the same age. One still lives with their parents, their outgoings are whatever they agree to pay towards their keep (often nothing). Person 2 lives in rented accommodation, they get their rent paid (within reasonable limits) and need to use their JSA to pay council tax (a percentage only, but still some), energy bills & food. Person 3 has their own mortgaged property. Their JSA needs to cover the mortgage (even if only the interest), household bills like energy, insurance etc, and food. All 3 receive the same amount in benefits.

Person one has plenty of personal money, person 2 is just about surviving, person 3 is getting hundreds of pounds deeper into debt every month they are unemployed.

Another problem with means testing is the lack of "joined up" government, especially when it comes to IT systems, sometimes even within the same department. A classic example of this was when I left a job and was claiming JSA. Tax statement arrived, they had down that I was no longer working for my previous employer and had been claiming for a while, however nothing had linked the additional notional income of me having had a company car to the job I had been in. So they were trying to tax me on the notional benefits of a company car while unemployed and in receipt of JSA. Easily sorted by a phone call, but a real "Duh" moment for the person on the other end of the phone when it was pointed out.

This is why a contribution-based system is fairer, as welfare was originally envisioned and how it operates in most other countries with a significant welfare state.

There is some cross-subsidy to the poorest of course but fundamentally the principle has been maintained that it is an insurance system and state pensions and unemployment benefits etc are based on a percentage of salary/ contribution. This means it provides a genuine safety net for all because you can survive on 70-80% of your previous pay for a few months. Whether you rent or own your home should be irrelevant like with any other insurance payment. It’s far less intrusive into personal circumstances also, as a result. A simple principle: you’ve paid in, if you then need help then for X months you’ll be provided with that while you get back on your feet so you can cover your “baked in” existing costs at the level proportionate to the contributions you’ve been making. This maintains the social contract and public support for the welfare system because it is a safety net for everyone as envisaged, not been coopted to become instead simply a disguised method of redistribution with no benefit at all to those paying for it. The time limit also means people can’t claim benefits as a “career” and that there is therefore far more money available for people who are disabled and can never work at all.

Allergictoironing · 31/10/2025 15:26

taxguru · 31/10/2025 14:18

No NIC on the rental profits though, so on a "Pound for pound" basis, someone earning from a rental property pays less tax than a worker. That's not right and it needs tackling.

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No NIC on investments of other kinds either e.g. ISAs. What's the difference between keeping £150k in an ISA and buying a house to rent that costs £150k?

EasternStandard · 31/10/2025 15:26

ThatLovelyPuppySmell · 31/10/2025 15:20

The problem is the next generation coming up for retirement have been looking forward to getting what their parents had/have, so are also not going to be happy. That's more people voting against it.
One of the things keeping me going at work is knowing I will have state pension and private pension so could retire a bit early.

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Yep it’s not like people suddenly say don’t bother with us.

Plus most parties overstate how much they can keep spending, Labour for example. And Green’s wouldn’t last. So even if younger people don’t vote for a rein it in party it doesn’t help much.

Australia mentioned below has some good policies, but also house prices are an issue and younger people are shut out of that.

222days · 31/10/2025 15:27

ThatLovelyPuppySmell · 31/10/2025 15:20

The problem is the next generation coming up for retirement have been looking forward to getting what their parents had/have, so are also not going to be happy. That's more people voting against it.
One of the things keeping me going at work is knowing I will have state pension and private pension so could retire a bit early.

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I think it’s been very well-publicised and documented for a very long time now that the state pension in its current form simply will not continue. It’s not mathematically possible. I don’t really understand why anybody would be presuming that it will given some basic arithmetic proves that it can’t.

222days · 31/10/2025 15:28

Cyclingmummy1 · 31/10/2025 14:06

You mean tax them more? Rental income is already taxed 🙄

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Not just that, but the only type of income I’m aware of that’s taxed based on revenue rather than profit! An insane system.

222days · 31/10/2025 15:30

coldiris · 31/10/2025 11:47

@Bluegrassdfly they always find a way to tax people though, no matter how tough. Where there is a will, there is a way. I am sure it's not that easy to tax them but I am also sure that it can be done. For example, in America, some of these multinationals get tax rebates in the states where they pay no taxes! How is that even possible but it is! If they can't tax them on everything, then they should find a way of increasing their taxes on something just like they do with people. Why should millions of people who earn nowhere near corporate billions pay more and more tax to plug holes in public finances? I don't frankly believe all these stories that tell us it's hard to do or impossible to do. It's just a nice fairytale that I am sure is fully supported by corporate lobbyists who seem to have every government in their deep pockets. How hard can it be to calculate how much money, say, Amazon makes in the UK? Why do we need to care how much they make in France, Germany, Italy etc? We don't. Just pay full taxes on what you make in the UK and find a way to account for your costs that may have occurred elsewhere and the burden for doing that should be on them, not on the government.

That’s why reform of the tax system including the rules around transfer pricing is important per my post at 16:22 yesterday.

222days · 31/10/2025 15:32

Gall10 · 31/10/2025 11:30

That gem came from 30p Lee!

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With this being the calibre of people being elected it’s not difficult to see why things are such a mess.

Bruisername · 31/10/2025 15:48

It’s also the unwillingness to work together to benefit the country

one example being teresa mays brexit deal

but they all are more interested in point scoring than genuinely trying to get this country into the best possible position

Pluto46 · 31/10/2025 15:56

222days · 31/10/2025 15:13

As set out in earlier posts, the figure I quoted (a saving of £80-90bn per year) is based on tapering away the state pension to reach zero only when the pensioner has an independent income at the PLSA “moderate retirement” income level.

This is uprated annually for inflation and based on robust research by Loughborough University along with actuaries and pension experts. The current level is £31,700 for an individual after tax and housing costs (i.e. disposable income just for bills and food) or £43,900 for a couple.

I don’t think anybody can argue that people with that level of disposable income require over £1000 of welfare per month. That’s £2,641 for a single pensioner or £3,658 for a couple left to spend after tax and housing costs. Such a means-testing and tapering system exists in Australia (who used to have a system based on ours but actually took appropriate actions to reform it) and it works very well.

https://www.retirementlivingstandards.org.uk/

It is a generous amount designed to cover the cost of a car, house maintenance, eating out regularly, foreign holidays every year, etc.

Note that after tax (assuming no contribution to their own pension at all and no student loan repayments) someone of working age earning the average full-time income of £37,500 per year has net pay of £2,453. From this, they must often pay very large housing costs which are likely to take up 30-50% of their net income, and in many cases they are also paying childcare which can be as much as a mortgage/ rent.

It’s simply not arguable that it’s necessary or reasonable to prevent necessary funding of schools, higher education, infrastructure and energy generation (lack of which is having a huge impact on the economy due to some of the highest energy prices in the world making our businesses uncompetitive) and industrial strategy so that we can give welfare to people with higher post-tax incomes than the post-tax earnings of the average full-time worker, who also has to pay for housing from this! These pensioners are perfectly capable of having a very comfortable standard of living without state welfare and to demand it, to the detriment of the other 85% of people in the UK, is egregious in the extreme. Removing this welfare from them would cause zero poverty and would provide the necessary funds to transform our economy.

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Sorry to be dim and have not read every post but what about savings? If a pensioner has, responsibly, saved for future care home costs, that could run into years, is that factored into your taper?

CeciliaMars · 31/10/2025 15:58

I don’t think the higher tax rate will mean better services. It’s to get the country out of debt, so your average person won’t feel the benefit.

winterbluess · 31/10/2025 16:24

Elbowpatch · 30/10/2025 11:00

If you are paying a lot of tax already you must be earning a lot of money, so can afford to pay more tax.

Increasing the higher rate and leaving the basic rate alone would be fairer.

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How on earth would it be fairer?? They already pay a much higher percentage than you

winterbluess · 31/10/2025 16:31

caringcarer · 30/10/2025 11:46

If we all end up paying additional income tax the only people who will get better services are the illegal immigrants. KS is taking money from disabled people to hand to the illegals. In France they are given a bed in a dorm whereas in the UK they get put into 4* hotels. The hotel in my town houses them. I can't wait to get rid of this useless law breaking government and Reform will take us out of ECHR and as they arrive send them back and ban them from receiving public money. It would stop innocent people being sexually assaulted too.

Absolutely.. instead of putting taxes up for hard working people, they need to be making cuts and no hemorrhaging money by inviting every man and his dog to be kept here!

Boomer55 · 31/10/2025 16:35

Nothing has improved under this lot. They are just grabbing more and more because they can’t get a grip on anything.

A huge disappointment. 🤬

dressinggowns · 31/10/2025 16:35

It’s laughable isn’t it.

This is the level of “debate”.

It's absurd & so depressing

EasternStandard · 31/10/2025 17:55

Boomer55 · 31/10/2025 16:35

Nothing has improved under this lot. They are just grabbing more and more because they can’t get a grip on anything.

A huge disappointment. 🤬

It was inevitable.

Bruisername · 31/10/2025 17:58

I’m also fed up of governments blaming their predecessor for everything. It’s like a bunch of toddlers pointing the finger at someone else

you play the hand you were dealt - yes Brexit and Covid and the deficit have led to issues but there’s no point complaining about it. Come up with a plan and explain how you’re going to deal with it.

Another76543 · 31/10/2025 18:23

Boomer55 · 31/10/2025 16:35

Nothing has improved under this lot. They are just grabbing more and more because they can’t get a grip on anything.

A huge disappointment. 🤬

This hasn’t come as much of a surprise unfortunately.

LeakyRad · 01/11/2025 08:57

@222days I've just caught up reading this thread and realised I've been thanking/agreeing with so many of your posts, please stand for Parliament - I really need someone like you to vote for!

Howszaboutthat · 01/11/2025 09:30

Bluegrassdfly · 30/10/2025 11:08

If people have less money they can’t pay more and housing costs will drop. Housing costs are ultimately driven by what people can afford. That’s the medium to long term though. In the short term there will be hard times.

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No, it’s driven by supply and demand. An easy example of this is the yearly Christmas toy trends - furbies in my day - whereby a limited supply and crazy demand leads to price increases and stampedes!

UK is already short of around 4 million houses. New households are formed at a rate of 250k a year, plus inward migration at a million a year. We barely build 100k houses a year. Extra demand on a deliberately restricted supply = increased housing costs.

History has taught us that lack of housing means more and more slum conditions (such as that created by HMOs). It is young families and young people that lose the most.

Allergictoironing · 01/11/2025 10:37

Howszaboutthat · 01/11/2025 09:30

No, it’s driven by supply and demand. An easy example of this is the yearly Christmas toy trends - furbies in my day - whereby a limited supply and crazy demand leads to price increases and stampedes!

UK is already short of around 4 million houses. New households are formed at a rate of 250k a year, plus inward migration at a million a year. We barely build 100k houses a year. Extra demand on a deliberately restricted supply = increased housing costs.

History has taught us that lack of housing means more and more slum conditions (such as that created by HMOs). It is young families and young people that lose the most.

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Unfortunately it isn't just the shortage of new housing, it's the prices in general. Builders have to have a certain proportion of the new housing they build at "affordable housing" selling price. This means at 80% or below the average price for the area, so in a generally higher priced area this still isn't really affordable for anyone below average salary to afford.

I live outside the M25, more a satellite town than suburbs, definitely not a "posh" area (I'd say quite the opposite!) and plenty of lower income people live round here. Big local developments have new 1 bedroom flats starting at £250k, unless you opt for shared ownership. How on earth is anyone expected to be able to afford to buy one of these at below average salary, bearing in mind that if you do a mortgage calculation based on a £40kpa salary it suggests you can borrow £180k max. When you start looking at 2 bedroom new builds, the minimum if you have a family, you're starting at a little shy of £300k

Even a 1 bed older flat in the area will cost you around £120k upwards unless you go for shared ownership.

Studio flats start at £700 a month (older properties not new builds), around 40% of minimum wage & leaving around £1k for everything else like insurance, maintenance, bills, council tax, food, travel etc.