The party of taxation - Here we go hitting pensioners again!

rowyn

Ironically, I've paid into a private health scheme for most of my life, but never made use of it. I've now had to cancel it because, being on my own, with higher energy bills looming, plus the possibility of no Council Tax discount for those living on their own , amongst other things, I cannot afford the payments, thanks to the Labour government.
So all the money that went into the health insurance pot has been wasted, and would have done much better in a savings account.

Seriously? You have cancelled a health scheme because of rumours and the 'possibility' of no CT discount, when the budget is a week away, and you will find out then what is actually going to happen?

That's your choice, obviously, but I can't see how your decision is 'thanks to the Labour government'.

We know about pay increases for those in the public sector, I suspect much of the private sector depending on the nature of their business cannot match those rises or pensions for that matter. Whilst zero hour contracts are to go, unless the employee wants them. We still have a gig economy to an extent very aware of Deliveroo cyclists going about their deliveries in all weathers which would seem a shit an exploitative way of earning a living. I wonder how many businesses operate under a radar, sweat shops for example, who are not being investigated.

Many pensioners may be drawn into the tax system or a higher tax bracket because of so-called "fiscal drag" (freezing the tax fee allowances). In the current climate this is a mean and sleazy way of increasing taxation. It more or less invites people to find a cash in hand side hustle to make up the deficit.

Short term pain for long term gain??? Well I wont live long enough to see the long term gain so no thanks mate. Youve already had enough of my taxes for things I do not want and cannot use.

TerriBull

We know about pay increases for those in the public sector, I suspect much of the private sector depending on the nature of their business cannot match those rises or pensions for that matter. Whilst zero hour contracts are to go, unless the employee wants them. We still have a gig economy to an extent very aware of Deliveroo cyclists going about their deliveries in all weathers which would seem a shit an exploitative way of earning a living. I wonder how many businesses operate under a radar, sweat shops for example, who are not being investigated.

From the Office of National Statistics:

Yes, wages have gone up more in the private sector than in the public sector in the UK

Annual average regular earnings growth
In May to July 2024, the private sector's annual average regular earnings growth was 4.9%, while the public sector's was 5.7%.

Weekly wage growth
In August 2024, the private sector's weekly wage growth was 4.7%, while the public sector's was 0.1%.

Sorry, missed the last part of the information

Annual average regular earnings growth in October to December 2023

The private sector's annual average regular earnings growth was 6.2%, while the public sector's was 5.8%.

May to July 2024's public sector above unusual figures were the pay settlement of that period only.

I have a client who has a property company which is used for a commercial property. He pays himself a small salary so that he can claim the child benefit.

His wife is self employed and they both have a large investment portfolio which is what he spends most of his time on, I suspect.

I don't prepare is tax return so don't know the amount of his income but I don''t consider what he does to be work in the normal sense.

rowyn

Ironically, I've paid into a private health scheme for most of my life, but never made use of it. I've now had to cancel it because, being on my own, with higher energy bills looming, plus the possibility of no Council Tax discount for those living on their own , amongst other things, I cannot afford the payments, thanks to the Labour government.
So all the money that went into the health insurance pot has been wasted, and would have done much better in a savings account.

You said it yourself!

Some of our friends save the money that they would have spent on pet insurance, rather than pay the premiums. You could have done the same and would have had a decent sized pot to fall back upon now.

ronib

I don’t think for one minute this country is in a financial crisis …yet. It’s a very inefficiently run country and I see no signs of any improvement. If this country is at rock bottom then why is Rachel Reeves rewriting the borrowing rules? It’s all a gamble?

It makes sense to me that RR is re-writing the fiscal rules relating to borrowing.

Most of us have borrowed in order to buy a house. If you were including this purchase on a balance sheet, on the debit side you would have the cost of the house and the loan on the credit side. Income comes into the bank account and is used to gradually pay off the loan (plus interest). At the end of a defined period you would have the cost of the house (asset) and a Nil mortgage (creditor). The latter would be replaced by your capital account (ie money put into buying the house)

Apologies if the above is a little simplistic.

More Daily Wail scaremongering. Only Budget Day counts.

biglouis I agree with every word you said.

Wyllow3

And.....yes, its fresh out of the Daily Mail headlines today.
Let's wait for the actual budget for those all so crucial details.

Generally speaking, the increases needed for the NHS and other facilities we all use, unless you have private health insurance, cannot be conjured out of the ether.

How do posters think we should raise the money?

I think that taxation on all working people should have gone up, income tax!
They stupidly ruled that out in the run up to the GE.That would have been the best and the fairest way to do it and raised a lot of money.

I agree about a very modest raise on a well graduated income tax oreo as long as low earners including pensioners had proper consideration.

I suspect people would have found reasons it wasn't "fair"?

Maybe low middle income people with substantial responsibilities?

Differing mortgage costs hitting income severely in different parts of the country?

And...would it have been enough on its own?

Yes, it would have been fair as tax is graduated.I’m not pension age and am in a low income job but think it would have been absolutely fair for a slight raise in income tax.
The vast majority of tax isn’t from the few at the top of the income tree but from the rest of us, low and middle income people, but the more you earn the more you pay.It should never have been ruled out .

Dinahmo

I have a client who has a property company which is used for a commercial property. He pays himself a small salary so that he can claim the child benefit.

His wife is self employed and they both have a large investment portfolio which is what he spends most of his time on, I suspect.

I don't prepare is tax return so don't know the amount of his income but I don''t consider what he does to be work in the normal sense.

"Unless you get your ands mucky, you aint working".

Romola. Keir Starmer is not going to increase the tax for working people, he is increasing tax for employers via their National Insurance contribution.

Shropshirelass so increasing the National Insurance employer’s contribution will have consequences. We can guess - fewer jobs and lower employer’s pension contributions. Any other possible outcomes? Higher unemployment benefit bills?

I think that taxation on all working people should have gone up, income tax!
They stupidly ruled that out in the run up to the GE.That would have been the best and the fairest way to do it and raised a lot of money.

How is it 'the fairest way to do it' that those working pay tax and those not working don't? People on PAYE don't just pay tax and NI, they contribute the fruits of their labours, ie goods or services, whilst too many people opt out of doing either. Why should not producing anything or providing any service to society mean that you also get out of paying tax, and expect a free ride?

Also, can someone please explain to me how pensioners are 'being hit again'?

I realise that nobody has any idea of what will be in the budget at this stage, but in what way do people think pensioners are going to be targeted?

Even if the things in the OP come to pass, they will apply to landlords and stocks/shareholders of any age, surely? As people have said, the money to pay for pensions, the NHS, defence, education etc etc has to come from somewhere, and expecting people on PAYE to cough up more would be unfair, as in the majority of cases they are paying high housing and childcare costs, student loans etc out of salaries that have been fairly static for years. Are people really saying that there should be exemptions from taxation for pensioners, even though it is pensioners who benefit most from the welfare budget and the NHS?

I realise that older pensioners can't easily earn more money by working extra hours, but nor can parents with children who need looking after, or those who are already doing 12 hour days on minimum wage. If the budget reduced the amount of pension (beyond unlikely) or increased the rates of tax for those on pensions I would think that pensioners were being targeted, but if measures are taken to bring in more money that involve taxing people on a passive income, then that's not 'hitting' any group more than any other.

The economy is in a mess, and we have to get out of it somehow. If there are cuts, people object when it affects them, but who do people think is going to pay? Nobody wants to have less coming in and more going out, but that doesn't just apply to pensioners. Food, fuel, energy, housing - all of these things cost the same for younger people, more if they are feeding a family and need a house big enough for them.

I agree that fiscal drag is an issue, but again, not just for pensioners. Anyone on a low income will find themselves paying tax on anything over the allowance, and the category of 'middle earners' will expand to include relatively low paid workers.

Personally, I'd rather not see 'working people' continue to shoulder the burden, so that leaves those with passive income to cough up - it's only fair.

Biglouis, I too agree with every word you have said.

Allira

^road workers with calloused hands^??
Good grief!

🤣

Again, let’s not speculate, get upset, panic until AFTER the budget, when we will know actual facts.

Willow3 - thank you for your articulate, well researched and rational posts. You are a breath of fresh air and help to lower my blood pressure on threads like this.

For those who listen to the radio, it was interesting to hear that it’s government practice to leak many of the things in the Budget, reserving a few things which only a very select few are party to, until budget day.
That way they can say “But you already knew”.
Likewise, some drastic things are leaked, which are then toned down in the actual budget so people will say ”Oh it’s not as bad as we were led to believe”

Thank you Greyisnotmycolour.

I think no increased income tax for “working people” was fair enough the revenue has many ways to increase indirect taxation, or indeed cut benefits or services to balance the books. It’s likely that tax thresholds will not rise, that in itself is an increase, if we want better services it has to be paid for, most of us are going to be paying some.

I'm not sure what has been leaked which suggest that pensioners will be "hit". AFAIK the biggest hint has been about employers' contributions to NI, which won't affect pensioners, unless they happen to employ people, which I suspect most retired pensioners don't. The other big leak about CGT will affect everybody who sells a valuable asset.