Budget Day

The OBR has stated that the U.K.’s population will see the biggest fall in living standards over the next few years since records began.

Over the next 2 years living standards will fall by 6%

Hunt’s headline grabber that the OBR had up-rated the U.K. economy from recession to tottering on the brink of recession for this year. The U.K.’s economy will grow this year, but grow lower than every other developed economy including Russia.

However, what Hunt failed to add was that the OBR has actually down-rated the UKs economy for the following years.

So the tax give away on pensions - hmm

Headlined that it will “encourage consultants” to get back to work.

It is thought that it will benefit only 15000 doctors - always assuming that they will return to work or delay retiring early - doubtful.

But it will benefit the wealthy far more. So big tax break for the wealthy.

Why on earth could it not have been a targeted give away?

There is no reason.

The pensions cap was put in place by the Tories so removing it is just another U turn on a misguided Tory policy. Free childcare is all very well but with 400+ nurseries closing last year as they can’t afford to stay open Im not sure where all the nursery places are going to come from - the amount paid by the government for the free places doesn’t cover the costs for the nurseries.

The reason the situation has arisen is because Osborne was trying to stop high earners at the end of their working lives from paying into a pension scheme rather than salary. The pension contributions aren't taxed, whereas salary is taxed with some of it taxed at 40%. It's likely that the pension pays less than the salary, so less tax is paid. It's a way of deferring pay and paying less tax.

However, there was an unintended consequence. High earners such as hospital consultants couldn't defer their pay in this way, so they exceed the lifetime allowance they're allowed to put into a pension fund. When they draw their pension they pay a tax surcharge on the excess, which I think (not 100% sure) is 55%, which is higher than the highest tax level.

They're not actually losing money, but they do their sums and work out that their pensions will only increase by a relatively small amount and presumably weigh up their work/life balance and decide to take early retirement.

It was mentioned on Peston yesterday evening that the change will only affect about 15,000 people and will cost the Treasury £66,000 for each one (I think those were the figures quoted). I don't think it's a very efficient way of keeping a few doctors in work. They might very well decide that working in the NHS is too tough and take early retirement anyway.

Wyllow3

Can someone explain to me why its a good ideate give the rich tax breaks?

And no rise in state benefits except small %? Beyond me.

The Tories say it's to get doctors back into work. When they had the same problem with Judges, the government made changes specifically for them. So why give such large cuts to all those falling into this taxation?

I keep hearing that it's because they pay the most tax (poor souls). What percentage of overall income do they receive? If it is less than the percentage of tax they pay, then perhaps there is an argument there. However, I very much doubt their tax percentage is higher than their percentage of the overall income.

Perhaps someone knows how to find this out?

Urmstongran

Nothing judgemental DaisyAnne I’m just saying , if 2 parents smoke a packet of cigarettes each every day then they will need £200 p.w. to find. An because nicotine is addictive they will fund this before most other priorities, is all.

Except you did suggest this is how "low income families" will behave.

Can someone explain to me why its a good ideate give the rich tax breaks?

And no rise in state benefits except small %? Beyond me.

I’m guessing that the continuing rise in tax on smoking is also linked to health promotion, because smoking is so detrimental to health. I can’t think of anybody I know who still smokes, I do know a few who used to, but now vape instead, which is much cheaper.

Nothing judgemental DaisyAnne I’m just saying , if 2 parents smoke a packet of cigarettes each every day then they will need £200 p.w. to find. An because nicotine is addictive they will fund this before most other priorities, is all.

Yes, smoking is an addiction, along with alcohol, chocolate, sugar, chips ….. Life is full of addictions. One has to make a choice and prioritise. Not easy for everyone.

Urmstongran

Nothing in the budget for me and mine.
I’m bitterly disappointed the personal allowance tax threshold has been frozen at this level for the next 5 years. Taxation stealthily. So for every slight increase we get on our pensions the Treasury will be taking 20% of it. Nice for them.

We don’t smoke but whoever knew a packet of 20 fags was now £13? That a huge amount of money per week. My mum and dad both used to smoke 20 a day. That would now be a household budget of almost £200 a week! It’s an addiction, hard to get off, so I imagine some low income families need this amount per week before they even do anything else.

^ It’s an addiction, hard to get off, so I imagine some low income families need this amount per week before they even do anything else.^

I'm not sure what you are suggesting there UG. Can you explain?

Ums people don’t smoke they used to, before you get over excited😂 I work in a factory and there is only 1 smoker who has 3 breaks per day. The rest (ex smokers) vape but they don’t even use that regularly…taxation of the future. I’m a purist

Patsy70

Iain Dale, on LBC, will be discussing this on his ‘cross question’ programme tonight, should anyone be interested.

Thank you Patsy.

Nothing in the budget for me and mine.
I’m bitterly disappointed the personal allowance tax threshold has been frozen at this level for the next 5 years. Taxation stealthily. So for every slight increase we get on our pensions the Treasury will be taking 20% of it. Nice for them.

We don’t smoke but whoever knew a packet of 20 fags was now £13? That a huge amount of money per week. My mum and dad both used to smoke 20 a day. That would now be a household budget of almost £200 a week! It’s an addiction, hard to get off, so I imagine some low income families need this amount per week before they even do anything else.

Happygirl79

Help for the richer people . Now those who can afford it can put more into their pensions. Happens immediately.
Help with childcare costs for families delayed until next year. Coincidence. Election year. Trying to buy votes. But I honestly don't think it will happen. Just like the care costs we were promised but didn't happen

I've been struggling to know what to do with my spare £60k a year! (not)

Our life will not change, we’ll just chip away into our million pound pensions

Help for the richer people . Now those who can afford it can put more into their pensions. Happens immediately.
Help with childcare costs for families delayed until next year. Coincidence. Election year. Trying to buy votes. But I honestly don't think it will happen. Just like the care costs we were promised but didn't happen

Iain Dale, on LBC, will be discussing this on his ‘cross question’ programme tonight, should anyone be interested.

Wyllow3

I shall be looking out no 1 for funding of Social Care and NHS.

A quote from NPC Budget Comment

It is also shocking that the budget had no firm or clear resolution to the crisis in care services. Older people are being denied the help they need just to survive every day. They are dying through lack of access to appointments and treatments. We believe there is no commitment by this government to properly invest in care provision even though they know it is right to do so.

...

Pat Hughes, 70, retired nurse, Kent: “Apart from the fact that households will not be any better off, for me the key thing is the lack of commitment to health and wellbeing and rebuilding the NHS, which will result in the whole country being sicker and poorer.

grannydarkhair

Germanshepherdsmum Why not £20,000? Do you think the PA should be as low as £12,570? Do you think it’s right that it’s been frozen until 2028?

20k? For everyone? ;Have you done the maths?

Whitewavemark2

Wyllow3

There was a confident prediction that inflation will drop in a year from around 10% to around 2.5% (approx)

This is completely pie in the sky!

Tbh it is expected that inflation will drop, but it will be nothing to do with what this government has done.

Well, it can hardly go up much more, can it!

Prices won’t drop to though, they will just not be going up so quickly

Wyllow3

There was a confident prediction that inflation will drop in a year from around 10% to around 2.5% (approx)

This is completely pie in the sky!

Tbh it is expected that inflation will drop, but it will be nothing to do with what this government has done.

There was a confident prediction that inflation will drop in a year from around 10% to around 2.5% (approx)

This is completely pie in the sky!