Poor life planning..

[pocketpairs]

With the upcoming budget seen many "poor me" posts, particularly from high/middle earners. I find it frustrating that rather than blame themselves for thier life (& financial planning) choices, they blame some arbitrary government policy changes, such as upcoming introduction of new council tax bands.

Example: Sister & hubby earn £14k net p/m. But their choice to buy a nearly £x.xm house in SE & send DCs to private school means they have £3k (approx) to spend on everything else. They could have taken different choices...£1m houses &/or move to grammar school areas.

Clearly this is an extreme example, but I really don't understand why a family can't survive on £4-6k p/m, especially outside of London. Up until recently, I survived on much less and managed to put myself a firmer financial footing in 40s.

Sure this means some sacrifices, but it seems everyone wants to 'have their cake and eat it'.

It does amuse me how people fall over themselves to justify why taxes on anyone other than themselves are a good idea, and how outrageous it is that those who are being hammered should dare to complain about it.

Wait for the trickle down effect. It will hit you too in the end. Those awful people in big houses who should have planned better, they'll cut back elsewhere to pay the extra tax. So lots of people who aren't awful because they don't live in big houses are going to suffer too when their life choices become untenable because the awful rich don't /can't use their services or simply up sticks and move overseas. Lots have gone already and with no end in sight of the attack on aspiration many more will go. Who is Rachel Reeves going to tax then? You?

It will hit you too in the end.

And people at the lower end aren't being hit already? The extension of the freeze on personal allowances will hit the lowest paid the hardest, as many are barely surviving pay day to pay day as it is so all increase in the cost of essential items makes life pretty dreadful.

They can't reduce their housing costs, those go up constantly. Their food costs more every week. For many it isn't a case of not shopping in Waitrose or M&S, they are already having to hunt for offers in Aldi & Lidl. It's not a case of turning the central heating down a couple of degrees to reduce energy usage, it's whether they can put it on at all even when it gets below freezing. It's not "only" having one overseas holiday every 2 years instead of every year, it's not affording to rent the cheapest caravan for a week out of season at the cheapest resort. It isn't not being able to replace your car every 5 years, it's praying your 15 year old car bought 5th hand when it was 12 years old already will get through the MoT to last a few more years

The idea behind the lowest level tax threshold is that people have enough money to get by on before they pay income tax on earnings. "Enough" is now well above the tax threshold.

How exactly is anybody being “hammered” in yesterday’s budget? Please tell me. Apart from millionaires having to pay £50 a week on mansions?

Salary sacrifice was a glorified tax dodge, and it should be closed. I’m sure that will be welcomed by Mums claiming CMS whose errant ex-husbands are currently getting away with paying their financial obligations because they’re sniding thousands into their pensions and declaring a paltry salary. Nothing is preventing people from continuing saving into a pension, it just means the employer will also be forced to meet their NI obligations.

Jesus, listening to some on here you’d think millionaires will be queuing at food banks by next week when in actual fact most are heaving a sigh of relief.

Not everyone does. My DP earns over £100k, he works 8-4 most days Monday to Friday (unless travelling for work), works from home and does jobs round the house during working hours. Doesn’t work bank holidays.

You are fooling yourself if you think only millionaires will be paying the increased taxes

Please tell me how?

I’d you listened to budget you’d know why

So now pensioners getting a state pension are scroungers
and paying in to a pension with money they are already taxed on is wrong

but deciding you want to be a stay at home mummy of 4 kids at the tax payers expense is your right

this country is fucked

FFS. You are NOT taxed on money you pay into a pension. You pay tax on it (usually at a much lower rate) when you take it out, after it has earned you a tidy profit.

Not strictly true re: the money paid into pensions being untaxed for £200k+ earners.

A bit mean spirited. Some people were afforded no financial literacy growing up because their parents had nothing much and didn’t know either. They’ve fought to build their own life and stability and so a shift in government policies can be daunting. It’d be like climbing a mountain, finally exhaling on a nice little ledge to take in the view, and being told you have to climb another few km before you can rest.

I agree wholeheartedly. I do think the 'household' rule for child benefit is stupid, as you can have a one parent household earning 80k (minus taxes and student loan etc) not getting anything, versus a couple paid 59k each totalling £118,000 still getting it.

The old trope that high earners work harder than low earners. Do me a favour-I know people who work 3 jobs doing 70h per week on minimum wage or slightly higher and work harder than me on £200k. Education and opportunity is a big factor in earning potential for too many people think that salary and work ethic are directly proportional.

Does your sister know quite how bitter you are? I beleive some tax changes are well overdue but this moronic government has simply driven high earner (high tax payers) abroad. They've introduced a system where the unskilled/feckless families (Today's Telegraph) can get circa £71k salaries for doing nothing while fard pressed families ard losing £1800 per annum to pay for it.

well said

I understand your point OP.

We are high earners but we got a mortgage at 2.5x our earnings and not 4x. So sure it’s sucks that costs go up but we very purposefully didn’t max ourselves out just because we’re high earners.

We could afford more DC but we’ll be more comfortable financially with one and we can afford to send him to private school, take him on nice holidays, pay for whatever sports/hobbies he’s into etc. I

I’d much rather have that than a house in the millions, luxury cars etc and zero wiggle room for economic changes, job loses, long term health issues, another pandemic etc.

I was thinking the same thing.. my DP earns just under 100k and has the best work life balance too. Generally flexible hours as long as work gets done and is at some core meetings. He chooses to do 10-6 weekdays from home and does chores around house in breaks. Drops off and picks up little one. Never works at all outside of those hours. Wish I had the same tbh.. I often feel like I’m in the wrong industry!

Same here. I’m a self employed consultant and thanks to a high day rate I can make 100k (and in my last tax year, I made more than that) working 3 days a week. They aren’t stupidly long days either. I took 6 weeks off over summer to go travelling. And no, I didn’t work 60+ hour weeks in a perm role before going self employed. I’ve never not finished work at a reasonable hour in my entire career.

Not bitter at all. I chose to live in a 3 bed semi, couldn't afford private school for DCs, and didn't go aboard every year. I'm younger, and we still only earn a fraction in comparison, but now have higher disposable income and more savings / investments because I chose to live within my means.

I just think that if anyone (on £14k) finds living tight, you're living life wrong.

I think most people work that for thier money, rather than just high earners.

I think what you’re saying is that those that have decent disposable incomes shouldn’t spend it, avoid lifestyle creep, and instead save it for possible future tax rises and to create a large financial cushion so all unforeseen events can all be absorbed with no quibbling.

If everyone in society spent the minimum to survive, or a fraction of what they could afford, and hoarded any spare cash in savings accounts the economy would grind to a halt. Tax take would plummet, so government spending would have to too. You might not like that others buy expensive houses or send their children to private school but the stamp duty and VAT they pay into the pot as a result would certainly be missed if they decided to buy the 3 bed semi instead of the 5 bed detached, and send kids to local comprehensive instead of private when they could afford to.

I’ve seen on here that some people think that families who can afford to send kids to private should, to leave spots in good state schools for those families who can’t, and stop pushing up the house prices is good catchment areas. And even that they have no right to buy yellow stickered food items in supermarkets and leave them for people who need them. Can’t have it both ways.

People should live within their means obviously- so overly stretching and getting into debt to fund a lifestyle which is really out of your reach is dumb. But having a lifestyle commensurate with what you earn and getting pissed off when the government takes an ever bigger slice to fund things like lifting the two child benefit cap is not unreasonable. CoL crises affects everyone. Middle and high earners are not cash cows.

I can't muster sympathy for those earning £14k a month but everyone can spend their money how they please. Your judgemental carping about how your sister spends her money sounds very bitter and priggish.

If everyone in society spent the minimum to survive, or a fraction of what they could afford, and hoarded any spare cash in savings accounts the economy would grind to a halt.

That isn't what's being said at all. Living at say 80% of capacity and saving 20% would still give very highly paid people an excellent standard of living while still having a decent contingency fund if something goes pear shaped. Planning to spend every penny each month is just silly if you can afford not to. Yes some people have to live pay day to pay day because they only earn enough for the basics, but if I had a grand over what I need every month then I'd indulge myself with half then tuck half away - not commit to spending the entire amount for the next 10 years on e.g. a mortgage.

Private education for your children is a choice that many / most parents take while not being particularly well off, and they forgo a lot of luxuries to do so. While they are doing this, they are still paying their taxes that prop up the local state schools, that their children are not using, and leave a space at those schools for other children. I would be interested to see if the extra revenue raised by adding VAT to the school fees is being passed straight to the state education budget.