Tax changes - are you better or worse off ?

[throckenholt]

Just listening on the news that only the top 20% will be worse off. I had never realised before that I am that well off to be honest !

I think we will be about £250 worse off if the online predictor things are right - we have 3 kids, 1.3 FTE salary (both work part time) with a middling salary (average about 40-45K between us). I think the money we will lose will be from falling off the top of the child tax credit limit (just).

I don't particularly expect handouts from the govt at my level of income, but I was surprised that our income puts us as high as the top 20% - I would have thought a bit above the middle. There must be a very long tail stretching out to the high earners.

It made me wonder roughly how many others are similarly unaware that they are classed as the wealthiest 20%.

[JemimaMop]

Oh and I'm with adamschic.

I have a degree in a different field but there aren't many jobs around here in that field. I changed career after having my second child, and gained a Level 4 qualification in the new field at my own expense. I have a job which I love, but it is working for a charity so wages will never be high (although the stress levels sometimes are!).

We live in an area where wages are low in comparison to house prices. DH doesn't earn a huge amount, although it is more than the local average (I married for love not money).

We could move, but both our families are here and the quality of life is great. However my monthly budget would keep some of you awake at night I'm sure!

[DebiTheScot]

It totally baffled me. I couldn't remember dh's salary so put in the lower value and it said we'd be £82 worse off. Then tried it again with the higher number and it said we'd be £140 better off!
Sat looking at it for ages before I realised it's because according to their calculation we recieved £340 tax credits based on lower salary and only £78 based on higher one but will lose it all anyway.

As dh only started his current job this year and got a pay rise for it and the tax credit is worked out based on last year's salary I'm none the wiser as to how much difference it'll make to us!

I agree with the daftness of the general £42k = well off. Location and therefore mortgage affects that the most but obviously lots of other things do too.

[needmyrootsdone]

Can someone please tell me what's happening with Working tax Credits? We get the min. £40/month for two children.

Is that going? DH - 47K, part-time 22K. Everyone talking about child tax credits - that's something different isn;t it?

When is CB actually going? Is it 2013?
When are public sector pension contributions increasing?

Got all of above to look forward to.

On paper we might look ok, but we are stretched with childcare + big mortgage. We are lucky I have potential to earn £800/month more if went FT but that means time away from DCs, just spending more on nursery fees and a very stressed household.

[sieglinde]

But jemima, you are therefore choosing to pay a premium for closeness to family, job satisfaction, and quality of life... which is fine. Sounds like you've made very good choices.

[Niceguy2]

Exactly Devon. The problem is that the system is all wrong. At the moment it's pretty much "Here's some money based on whatever criteria you can meet....now we'll beat you for taking that money"

The bottom line is that throwing money at people is not the answer and what it's doing is encouraging people not to work, rewarding those who can play the system and penalising those who do.

What I'd like to see is a VERY basic minimum direct support but then a lot more indirect support.

So for example, employers should be given incentives to employ disabled people. Let's say it costs i dunno...£2k to adapt a training course, change their desk & chair. Let the business claim the costs back from the govt.

Unemployed? Here's free education, free childcare whilst you are in college studying & once you get a job, a gradual tapering of subsidised childcare. But let's limit JSA to a defined period of time (eg. 2 years).

My point is that giving money to someone is rarely the answer. We need to move to a system which rewards people for working hard and doing the right thing. Not "here's some money now go away!"

[JemimaMop]

I don't think on a joint income of £69K you will get any tax credits at all. Try running the figures through this calculator

[needmyrootsdone]

didn't think so - does it stop automatically this month or do you have to inform?

Don't want to end up in a situation owing it back

[Chil1234]

@needmyrootsdone HMRC Tax Credits will assume your circumstances have stayed the same until they receive your new claim in a few weeks time. If your existing circs mean you no longer qualify under the new rules, you'll get no more payments.

[adamschic]

Jemima, same here, great job for a charity in a lovely area which I feel lucky to live and work in. No-one in our organisation is a HRT payer not even the top dogs. I really would not miss a few quid a week handouts if my income was more than double to take me up to such heights.

[JemimaMop]

I think you learn to live on the amount that you have (although at the very bottom of the scale this must be very tough).

SIL lives in the SE and her household income is more than 4 times ours with the same size house and the same number of children. But I don't think they have any more spare cash left over at the end of the month than we do.

So anyone facing cuts will feel the pinch as they are used to more money coming in.

[PrincessScrumpy]

I was hoping to go back to work after twins are born (and a year's mat leave). Looks like childcare will be more than my income and tax credits won't balance it out so guess I should start budgeting to become a SAHM. Hey ho.

[stressedbutluvem]

Worked hard, stayed at school, got qualifications, trained as a nurse, went back and got more qualifications with my own money in my own time. Worked for the NHS for 22 years. Look after my kids by working p/t when they go to bed, do charity work, support our school and church. Instil into our kids the need to work hard, fend for themselves and be good to others.
Husband pretty much all the same things and now??
Ive been made redundant, pay freeze in NHS for hubby for 3 years, losing his on call pay but still has to do the on call, works every 4th weekend,opportunities for any paid overtime gone but still works average of 10 additional unpaid hours a week to get the job done which is pretty standard for clinical NHS workers. Will get caught up in the new tax band, will lose child benefit and I think child tax credit. So, approx £1200-£1400 per month worse off, baby on the way (before all of this became known), no baby element of child tax credit anymore, cant afford a pram, certainly no holiday, hubby drives an old banger, cant afford extra curricular school stuff for daughter and she doesn't even bring home the letters for school holidays. Clear to me that as we're not 70K plus earners who probably wont feel the changes then we would almost certainly be better off on benefits. Not saying I have a halo by any stretch of the imagination but what are you supposed to teach your kids about being responsible members of society?? (no insult to those who have had a rough ride and thus ended up dependant on benefits for this reason) Oh, and thats in the North west.Totally fed up.Every single hit seems to have come our way.

[GrendelsMum]

I remember the programme about whether 'David' was well off - very interesting. Was it More or Less?

Don't forget that our hypothetical David is a man, which raises his average income, and in London, which raises his average income. And didn't they take into account his education level as well? So they were asking something more like 'how much does a University-educated man of 43 in London earn on average', which would actually tip him very much to the higher end of the scale.

[notyummy]

£500 worse off- no tax credits involved as we were not eligible anyway. We'll manage.

[NoseyNooNoo]

We're about £1500 pa worse off. It's a bit of a bugger especially since we recently moved house. However, the changes have been widely sign-posted and we all have to tighten our belts don't we?

[twolittlemonkeys]

£101.62 better off here, all due to the income tax threshold going up. DH gets an apparently slightly higher than average salary and I don't even earn enough to pay any income tax. Woohoo. We don't drink/smoke at all so that helps to minimise the impact of VAT rise I suppose.

[allgonebellyup]

can anyone say whether i will be worse off?
Am single parent, i work full time practically but only earn £13k.

[JemimaMop]

I would guess that you would be better off. Try running your figures through the bbc calculator linked to at the start of the thread.

[throckenholt]

Am single parent, i work full time practically but only earn £13k.

I bloody well hope you will be better off otherwise their justification for it all means nothing. They are claiming most people will be better off I think (although not sure how that is supposed to save money ?).

[sieglinde]

stressedbut, you are just the kind of 'loser' I have in mind, and I have no bloody idea what to tell my kids either, or why people like you and your family should bear the brunt of this. Holidays? Don't make me laugh. We don't get any. I work all year round to earn a bit extra, and so does DH. Still, we couldn't afford them anyway

[Lottiegal]

We will be about £800 worse off, dh is a civil servant so is on a pay freeze for 2 years and his has recently forced to pay a high pension contribution. That along with NI and tax rise and scrapping of child benefti will hit our household income hard. I'm a sahm with two toddlers and am 7 months pregnant. I feel annoyed that I'm not able to get a job right now to supplement our income, it will be at least 6 months before I can do that. Also the whole thing about trying to increase social mobility is silly, I came from a working class background went to uni and worked hard for 10 years until we were 'secure' enough to have a family. Now we are no better off really than if I'd stayed local and got an admin job (nothing against admin of course). Where is the incentive to better yourself financially if you are going to be chastised for it in taxes?

[Lottiegal]

Just wanted to add we live in the SE and dh earns just over the higher tax threshold. We have one 12 year old car and haven't had a foreign holiday in 5 years (since having kids) We live in a modest 2 bed terraced house.

[MrsArchchancellorRidcully]

I agree with most posts but KaraStarbuck I must disagree with your comment:
"Niceguy2 - I agree with you. £45K is a good income up in the North, but if you live in the SE/London it doesn't get you far - house prices and rents are very very scary!"

I live in 'the North', about 20mins from Chester and my job involves a lot of contact with people living in London/City and things are just as bad up here I can assure you!
I earn just above £45k and, whilst I agree I am not living on the breadline, I am not exactly living the highlife. My mortgage is over £1100/month (normal family home on a normal estate, nowt fancy) and our childcare costs are about £500/month at but about to shoot up as I am pg with #2 and dear MIL cannot look after 2 due to her age so we will have to pay for FT nursery (DD currently in nursery only 3 days a week due to kindness of MIL)

I'm certainly not wingeing about my lot but in the same way that someone earning just over £45k is being hit hard and should not be lumped into the same bracket as those earning £70k+++, don't assume that once you get above the M40 we're all living it up with oodles of spare cash. Prices are not that different. I appreciate that house prices may be a bit different in certain parts of the SE but it's not that different. Houses in Chester generally start at around £300k for a small terrace/apartment and up to £2m+ for a top spec/location house. We live outside, as cannot afford Chester prices.

On another note (probably been done to death) is that as I am a higher rate tax payer I will lose CB, yet my friend who is separated from her DH won't lose hers, despite her exDH being higher rate payer and paying a proper amount of maintenance to her. Don't begrudge my friend having it but if I split from DP and had the kids, I would still lose CB!
Sorry, just my side moan.

[bronze]

Very very slightly better off though of course we won't feel it really with the way things are

[wubblybubbly]

We live in the NE, my DH earns just above the national average, works hard, long hours, travels around the country, put himself through Uni, paid for professional qualifications etc.

We bought our house on an interest only mortgage, despite having a 50% deposit, it was the only way we could afford the monthly bills.

We're going to be around £100 a year better off according to the calculator. I think that's already gone on the increased price of food.