Budget!

RE: Budget!

Martin Atkinson — Fri, 10 Jul 2015 18:54:53 GMT

[quote user="Neil Wheadon"]

[quote user="Martin Atkinson"]The state pension will be the icing on the cake for most of us[/quote]

This is very revealing and applies to many of us really. As I have tried to illustrate that little extra, be it a cocktail by the beach or a coffee at Costa will cost the country an extra 4.5 billion/year and could be used instead to support the younger generation who will be buying puppies and kittens or simply trying to make ends meet on a living wage

[/quote]The point is we have paid for it from our taxes/NI contribution. That we were hard working/astute enough to invest in a decent private pension as well doesn't mean it should be taken away from us. We have contributed far more to the economy from our spending power and taxation than we will ever get back.

This younger generation of which you speak, if they are prepared to work hard enough. still has far more spending power than I ever did at their age yet I'm still supporting two of them who haven't yet fledged the nest!

RE: Budget!

Neil Wheadon — Fri, 10 Jul 2015 18:20:49 GMT

Hi Martin

[quote user="Martin Atkinson"]Are you really suggesting you live on £120/week ? - you're having a laugh![/quote]

The government thinks so, and if you have made absolutely no provision or on state benefits all your life then you'll get just under £116. The thing is that for most, extra provision has been made, be this additional pension, what was SERPS or property or maybe even paintings as friend of mine has done preferring to enjoy his investments.

[quote user="Martin Atkinson"]The state pension will be the icing on the cake for most of us[/quote]

Neil

RE: Budget!

Martin Atkinson — Fri, 10 Jul 2015 15:23:28 GMT

[quote user="Neil Wheadon"]Now assume the state pension will be £120/week (I'm being generous here - £150 is the aim). If you removed the triple lock and asked pensioners to live like the rest of us will have to,[/quote]

The state pension will be the icing on the cake for most of us and I will take advantage of the generous terms for waiting as long as possible to collect it. But for those who depend on it even £150 is miserly. Are you really suggesting you live on £120/week ? - you're having a laugh!

RE: Budget!

Neil Wheadon — Fri, 10 Jul 2015 12:26:05 GMT

[quote user="Martin Atkinson"]My generation planned for retirement based on the regulations that were in force at the time. You can't suddenly move the goalposts [/quote]

I'm not saying that Martin, no goalposts are being moved.

Consider the definition of triple locking

The "triple lock" ensures that the state pension will rise every year in line with wages, prices or by 2.5 per cent - whichever is highest - until at least 2020.

The government have decided that NHS workers/public sector can live with a 1% rise. Therefore pensioners will see an increase over that of at least 1.5% per annum for the next 5 years

Now assume the state pension will be £120/week (I'm being generous here - £150 is the aim)

If they increase by 1.5%/annum that's an extra £93/annum/pensioner per year

Here's where the maths gets scary

£93 x 5 years x 10 million pensioners = 4.65 Billion pounds

If you removed the triple lock and asked pensioners to live like the rest of us will have to, then that's quite some saving isn't it?

Neil

PS Rather than star these posts folks have a look at

http://www.parliament.uk/business/publications/research/key-issues-for-the-new-parliament/value-for-money-in-public-services/the-ageing-population/

It is an issue and increasing, and my children will be paying for it

RE: Budget!

Martin Atkinson — Fri, 10 Jul 2015 11:39:45 GMT

[quote user="Neil Wheadon"]I am asking is that we stop this frankly ridiculous notion that those who benefitted from all the spending shouldn't at least help just a little in paying it back[/quote]The benefits you quote above are peanuts in the greater scheme of things. I may be nearly retirement age but I'm not intending to do so just yet, quite frankly although I have a healthy pension pot and valuable properties which may give me income, I can't afford to and keep a decent, not extravagant, lifestyle. Don't forget it has still got to last me probably for another 30 years. And I will be taxed on that income if it goes over the threshold so I will still be contributing back into the system.

My generation planned for retirement based on the regulations that were in force at the time. You can't suddenly move the goalposts and say sorry guys we're taking it away now or we may have done things differently which would probably have involved saving more and spending less thus contributing less to the economy and everyone would be worse off.

RE: Budget!

Neil Wheadon — Fri, 10 Jul 2015 10:43:27 GMT

[quote user="Gerry Henry"]I've paid into the system big time for 40 years, never troubled the state to school my children nor to treat us when we're sick, what I get in retirement I've worked for, stop whining and get on with it[/quote]

It's a typical response and looking at the stars there are a few others out there with this view.

Put it another way then. We're overdrawn (deficit) and need to pay it back (reasonable) The debt has been accumulated in the past tense, yet we are asking members of society who were children at the time to bear the burden (Analysis of the budget conclude that the under 25's will be worst affected) rather than on those who actually benefitted from the expenditure.

Over the past 20 years average house prices have risen from 3 to 4.5 times national wage. (In London's case 7) Consider who's holding the housing stock?

Students are now expected to fund their way through university and maintenance loans have be restructured

Both of these aren't insignificant sums and add to that stagnant wages

These are things simply not faced by the raft of retirees, who have not and will never have it quite so good again. To take 1/4 of society and simply state that they will be triple lock protected is wrong isn't it? Winter fuel allowance at 2 billion, free bus passes at 1 billion, should better of pensioners really be getting this?

It would be great to truly say that "i've paid into the state pension for 40 years and want my money back' but it's not set up that way. Pensions are paid out of present day taxation, there isn't a vault full of cash somewhere.

As Bob says many have made private arrangements and he's right these folk are in the same boat.

I'm very much against means testing retirement benefits as it discourages planning for the future, and I expect many people are saving for the future (I've practically discounted the state pension from my retirement planning) All I am asking is that we stop this frankly ridiculous notion that those who benefitted from all the spending shouldn't at least help just a little in paying it back

Neil

RE: Budget!

Gerry Henry — Fri, 10 Jul 2015 08:27:42 GMT

@ neil Wheadon

I've paid into the system big time for 40 years, never troubled the state to school my children nor to treat us when we're sick, what I get in retirement I've worked for, stop whining and get on with it, you're time will come too.

RE: Budget!

grumpyoldman — Thu, 09 Jul 2015 23:20:15 GMT

On the whole pretty neutral , min wage is not an issue ,the dividend changes were a bit stingy , and lots of people have been moving away from poorly returning pensions into buy to let market ,so sooner or later you would expect them to follow the money ,just surprised they did not do it earlier. We did a SIPP conversion a while ago ,which separates the premises from the rest of the business , then lease back the property to the Ltd Co . What ever happens in budgets I just tweak the price structure to compensate for any loss in income ,so essentially I just pass it on.

RE: Budget!

Clive Ansell — Thu, 09 Jul 2015 20:21:38 GMT

[quote user="Neil Wheadon"]Why are pensioners so protected?[/quote]

Because there are a lot of them, most of them vote, and most will vote conservative. Compare to other groups of benefit claimants who are much smaller in number, and either don't vote or don't vote conservative.

If I remember correctly 1 in 6 people in the 2011 census were pensioners, which is set to rise to around 1 in 4 by 2020. Last thing they want to do is p*** of such a large group of potential tory voters, as opposed to other benefit claimants that are seeing relentless and ruthless attacks on their income.

RE: Budget!

bob lehner — Thu, 09 Jul 2015 17:33:03 GMT

[quote user="Neil Wheadon"]And your point is?[/quote]

Well - you asked 'Why are pensioners so protected?' and I was pointing out that they are not - and are as vulnerable to the vagaries of economics as anyone else.

RE: Budget!

Martin Atkinson — Thu, 09 Jul 2015 17:19:59 GMT

[quote user="Neil Wheadon"]Why are pensioners so protected?[/quote]I hope you are acting as Devils's Advocate Neil but in case you're not: because they (nay us, I'm 65 in 10 days) have got to live off their pensions until they die. We are the generation that put the Great back into Britain and we may never have its so good again, ever. We've earned those perks from what we have put back into the economy and the social system, given another generation or two employment. scrimped and saved, spent cautiously and invested wisely, we deserve to keep it.

RE: Budget!

Neil Wheadon — Thu, 09 Jul 2015 17:03:00 GMT

[quote user="bob lehner"]Yes - but you earn b****er all on any money invested in safe savings accounts - since I 'retired' in 2005 my investment income has halved - was getting 6%- now lucky to get 3%.[/quote]

And your point is?

Oh yes, pensioners can afford to save whilst those under 25 are scraping to make a living and can't save a bean.

Did you buy any pensioner bonds, remember them, the pre-election sweetener to the grey vote

Sorry, it sounds a bit fierce, and I'm not being personal but do you get my drift?

Neil

RE: Budget!

Martin Atkinson — Thu, 09 Jul 2015 16:37:34 GMT

[quote user="Robin Grimmer"]What will happen is many landlords will sell meaning tenants evicted and even more housing shortage, and/or landlords will have to put rents up to compensate for the loss. Either way it's going to be worse for tenants and landlords.[/quote]Look on the bright side: it will release homes into the housing market.

RE: Budget!

bob lehner — Thu, 09 Jul 2015 16:34:17 GMT

[quote user="Neil Wheadon"]

OK reaching for the tin helmet

Why are pensioners so protected?

Lots are sitting on final salary pensions, have seen enormous gains in property, have free bus passes, BBC and get some of their heating paid. It's a bit like Greece was

Neil

[/quote]

Yes - but you earn b****er all on any money invested in safe savings accounts - since I 'retired' in 2005 my investment income has halved - was getting 6%- now lucky to get 3%.

All my working life I wanted interest rates to be low - now I would like them high!

RE: Budget!

Hannah Wynne Richards — Thu, 09 Jul 2015 16:29:24 GMT

More and more firms are replacing final-salary index-linked pensions with pensions funded from the stock market. Most of the final-salary schemes are in the public sector, i.e. funded by tax levied on the rest of us!

Wynne

RE: Budget!

Neil Wheadon — Thu, 09 Jul 2015 16:18:10 GMT

OK reaching for the tin helmet

Why are pensioners so protected?

Lots are sitting on final salary pensions, have seen enormous gains in property, have free bus passes, BBC and get some of their heating paid. It's a bit like Greece was

Neil

RE: Budget!

Neil Wheadon — Thu, 09 Jul 2015 16:15:21 GMT

[quote user="Bob Russell"]Hopefully the accountants will be able to tell me it is not as bad as it looks! The additional 7.5% tax on dividends would appear to take my tax bill back up near to the crazy figures they were before incorporation![/quote]

Hi Bob

Can you explain this. Is it dividend that you pay yourself by setting up a company

or dividend by investment

http://www.telegraph.co.uk/finance/personalfinance/investing/shares/11726664/Budget-2015-investors-face-tax-raid-on-dividends.html

Investors who receive more than £5,000 from company dividends held outside tax-efficient plans such as Isas will pay more tax from next April, George Osborne announced in the Budget.

Currently, dividends paid to basic-rate taxpayers are regarded as taxed already within the corporate tax system so there is no further tax to pay. Under the new rules only the first £5,000 a year of dividend income will remain exempt.

For dividend income above this allowance, basic-rate taxpayers will pay 7.5pc, while higher-rate taxpayers will pay 32.5pc tax and those who pay the additional rate of 45pc will face 38.1pc tax.

Confused from Bath

RE: Budget!

Bob Russell — Thu, 09 Jul 2015 15:37:04 GMT

Absolutely no reason to be pilloried. Generations of vets depended on the rising value of practice properties to provide investment.

Partnerships often owned properties including housing for assistants. These were bought and sold at market valuations when buying into partnerships and on retirement. I suspect many made more money this way than by increased value for a partnership share.

Clearly now a different world but property is still a good alternative or complimentary to a pension. Renting out a property is a service like any other and profit is the difference between money taken and costs - same as any other business. Increases in property values gets taxed as capital gains.

RE: Budget!

Robin Grimmer — Thu, 09 Jul 2015 15:10:31 GMT

[quote user="Martin Atkinson"]

[quote user="Robin Grimmer"]

As a landlord of 2 properties I've been stitched up good and proper.

[/quote]Robin, I don't know your circumstances so this may sound a little presumptious, but I find it hard to sympathise with someone who can afford the mortgages on 2 properties just to rent, Despite your poor pension I doubt you're on the breadline and I can't imagine the interest you will make on investing the proceeds of the sale will be greater than the rent despite the reductions in tax relief.

Overall I think this is an excellent, well balanced budget. you can't please all of the people all of the time.

[/quote]

Being a landlord is a small business or investment like any other. Why should we be pilloried for it? Surely we should be able to claim legitimate expenses like interest on the mortgage? Not capital repayments. There are already a lot of costs involved in being a landlord. I make very little money on it as it is. What will happen is many landlords will sell meaning tenants evicted and even more housing shortage, and/or landlords will have to put rents up to compensate for the loss. Either way it's going to be worse for tenants and landlords.

RE: Budget!

Martin Atkinson — Thu, 09 Jul 2015 14:45:10 GMT

[quote user="Hannah Wynne Richards"](although the true cost to the employer will be much higher due to employer's NI[/quote]I don't know about your situation but for the past year and the current tax year, all my employer's contribution is being negated by small employer's NI relief. Don't know what will happen when eh new minimum wage kicks in next year but there is the promise of of further relief so this is not necessarily an issue.

RE: Budget!

Gerry Henry — Thu, 09 Jul 2015 13:47:17 GMT

[quote user="Bob Russell"]

Not particularly concerned regarding the minimum wage here as it is likely to have little impact with our staff! Very miffed about the extra tax on dividends as it seems there might be little advantage in being a limited company.

Having forked out a fortune (including a sizable capital gains tax bill!) in fees, charges etc in the last 18 months it seems likely that I have just thrown money at the banks, accountants and tax man! Main reason for being decidedly grumpy this morning![/quote]

Yes and no; remember you will be able to draw your director's loan tax free; the dividend tax, while not welcome, is only £750 in every £10k with a £5k allowance, ie £1500 for dividends of £25k; if you have family members, children as shareholders you can still net a family income of £100k for £25k tax and no NI element (assuming a pre tax profit of £100k and CT at 19%) not as good as it was but still hugely better than if you were a partnership or worse, a sole trader.

Not against a proper minimum wage but corporation and income tax this year was (for the first time IMO) a fair reflection of my true income!

RE: Budget!

Hannah Wynne Richards — Thu, 09 Jul 2015 13:20:23 GMT

I'm hoping my competitir's wages bills will be affected, so they will be less able to undercut me!

What makes me really angry is that from next April, a full time (40 hours per week) worker will be working for a pre-tax income of £15k per annum (although the true cost to the employer will be much higher due to employer's NI) A total waste-of-space over-bratter will still be bribed £20k per annum "take-home" pay for further polluting the planet.

Wynne

RE: Budget!

KMurphy — Thu, 09 Jul 2015 12:12:00 GMT

[quote user="Hannah Wynne Richards"]The minimum wage doesn't bother me, as I'm already paying well over it![/quote]

Yes, but surely your staff wages will rise in line with the minimum wage anyway. So it will mean increased wage bills regardless of what you pay just now.

RE: Budget!

Martin Atkinson — Thu, 09 Jul 2015 11:16:14 GMT

[quote user="Robin Grimmer"]

As a landlord of 2 properties I've been stitched up good and proper.

Overall I think this is an excellent, well balanced budget. you can't please all of the people all of the time.

RE: Budget!

Bob Russell — Thu, 09 Jul 2015 11:07:50 GMT

I was shown a schedule of the tax savings by becoming incorporated. Over a number of years I should have been better off. What was not taken into account were the fees involved including changing lease/loan agreements to the new company.

I was made aware that there could be changes so cannot really blame anyone. I had reservations which rapidly turned to regret as the hassle hit us!

Now regretting the move big time! Apparently this change should net the tax man £2.5b next year!