Inflation plunging

Yes, keepingquiet, it’s affected approximately 650,000 additional pensioners this year, more are being pushed into income bands where tax is payable year on year, one of the major reasons is the failure to raise the personal allowance.
This article from the Financial Times is helpful in understanding, pensioners are the biggest losers in the latest budget.
www.ft.com/content/d181dc01-dd75-40f5-a3b4-c7d09883e4ad

As you are ‘just over’ the basic tax band, presumably you have just slipped into the higher rate and are therefore paying more tax than previously. Not due to the budget but due to an increase in your income.

I rang my work pension- they told me it was a tax issue- the tax people said it was DWP who said it was National Insurance. I was on the phone the whole morning and in the end deduced it must be due to the budget, which came out after I received my new tax code. Therefore I will be getting a new tax code and maybe, maybe? a refund.
Meanwhile I am a significant amount of money short of my income this month.
According to your figures I am just over the the basic rate of tax.
I don't wish to be specific about my financial matters here but wonder if this has happened to anyone else?

I'm not sure that's right, keepingquiet, unless you owe tax from last year and they are taking it off monthly.

The personal allowance has remained the same.

Personal Allowance: 0% tax on earnings up to £12,570.
Basic Rate: 20% tax on earnings between £12,571 and £50,270.
Higher Rate: 40% tax on earnings between £50,271 and £125,140.
Additional Rate: 45% tax on earnings over £125,140.

They think we're stupid. My work pension went down this month- due to tax increase I was told.

State pension rise is paid in arrears- so I'm having to pay for a tax rise on money I have not yet received.

The increase in my SP will be cancelled out by the tax increase on my WP. No rise in living standards for me after 50 years of working. Great.

Greta

Yes, Monica, politicians are good at twisting things. When inflation was very high it was a "global phenomenon" but now Rishi Sunak claims that HE has managed to reduce it. His plan is working.

Yes, I noticed that too

Yes, Monica, politicians are good at twisting things. When inflation was very high it was a "global phenomenon" but now Rishi Sunak claims that HE has managed to reduce it. His plan is working.

I might add that the politicians do not produce the figures. They are produced by the ONS, Office of National Statistics, staffed by statisticians, actuaries and mathematicians, who work to meticulous rules.

Politicians claim ownership of these figures when they work to their advantage and reject them when they don't.

M0nica

Overall inflation is falling. I wouldn't use the word plunging, because it isn't.

Inflation falling does not mean that prices are falling. It means that prices are not going up as fast as they were.

Inflation can fall at the same time as someone's Council tax, vehicle tax, home insurance and vehicle tax to name just a few. are rising. All that as happened is that they are not rising as much as they did last year or the yyear before.

The government collect the prices of over 700 products and services to calculate inflation and within that mix there will be items that have rocketted in price - ike car insurance this year -and other items, not necessarily high profile items, that have dropped in price. The final inflation figure is an average figure.

Good analysis.

Inflation can fall at the same time as someone's Council tax, vehicle tax, home insurance and vehicle tax to name just a few. are rising. All that as happened is that they are not rising as much as they did last year or the yyear before.

And, in fact, that is something to be grateful for. I don't mean grateful to any individual or organisation, just grateful of the fact.

mabon1

So inflation is plunging. All my pension rise has gone on Council tax, vehicle tax, home insurance and vehicle tax to name just a few. How stupid do these politicians think we are.

I imagine for some, that the cost of living has outstripped the pension increase and also put them in the tax bracket to boot.

Win, lose - as opposed to win, win.

However, at least the increase has gone some way towards mitigating price inflation.

I'm already paying tax anyway - but I think my personal cost of living has exceeded the rise. I'm in the fortunate position of being able to make cut-backs (and will), but I do feel sympathy for those who've gained with one hand and are 'giving back' rather more with the other.

Of course the Chancellor honoured the triple-lock to keep the 'grey-vote' on side - knowing full well that it would tip sufficient numbers into paying tax. That's why the personal allowance was not increased.

That's how you manage a budget. Rob Peter to Pay Paul, and when you've paid Paul, take it back off him in some way to give it back to Peter again.

Overall inflation is falling. I wouldn't use the word plunging, because it isn't.

Inflation falling does not mean that prices are falling. It means that prices are not going up as fast as they were.

Inflation can fall at the same time as someone's Council tax, vehicle tax, home insurance and vehicle tax to name just a few. are rising. All that as happened is that they are not rising as much as they did last year or the yyear before.

The government collect the prices of over 700 products and services to calculate inflation and within that mix there will be items that have rocketted in price - ike car insurance this year -and other items, not necessarily high profile items, that have dropped in price. The final inflation figure is an average figure.

Don’t you realise that inflation going down only means that the rate at which prices increase is going down, not that the prices themselves are going down?