Rachel Reeves to announce £20 billion cuts today

Andy_W said:
It's not "not fair", or more tax, it's just less relief (i.e less of a tax dodge), how can getting the same relief as someone on less money (say 20%) be not fair, when they're both going to be taking it back out at the same rate (say 20%)? Nobody is really going to be avoiding paying less than 20%, not when you also factor in a lot of their time retired will be bumped to the tax band by the state pension.

I know 40% tax payers are not necessarily "rich", I am one, effectively as a sole breadwinner, but it depends who you're comparing to. Most 20% tax payers would say we're loaded, and have a much bigger head start on a more comfortable and earlier retirement. A sole breadwinner on the bottom of the 40% band certainly won't be rich though, and might even have less than 2 people getting average wage.
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For every £100 someone pays into a pension via PAYE today, if this were to happen, they would then be paying an additional £20 in tax in real terms reducing their take home pay by £20. For £500/month that's £100 more tax paid/reduced take home pay.

When they look at their payslip, that's more tax and less take home pay.

Personally I there is quite some difference between someone on 60k looking at their payslip Vs someone who is fortunate enough to add additional money to a pot(s) outside of PAYE and/or in lieu of savings/ISA or future inheritance tax.

Regardless of anything my central point is, personally I don't think someone on 60k a year putting 5% of their salary a month into a pension by PAYE is the problem. I think it's an easy target when there are much much bigger problems that need sorting.
 
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gramercy said:
The vast majority of 40% tax payers will be earning an amount that means that they aren’t going to be worrying about limiting their pension draw down to £50k, as their total pension pot will fall well short of the amount needed for that figure.
If the relief went to a flat 20% the vast majority would be taxed at the same rate in and out.
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Yeah, good point, would need like a 600k pot at 60, to be able to take 50k per year from 60 onwards, and having that last to 80, assuming what you aren't taking is still growing at net 6%.

Someone on 50k for 20 years, saving 10%/ 5k per year, would get to about 200k over 20 years with ~5% growth, it's nowhere near higher rate tax. Might be able to take 15k a year at that.
 
m3t4tr0n said:
For every £100 someone pays into a pension via PAYE today, if this were to happen, they would then be paying an additional £20 in tax in real terms reducing their take home pay by £20. For £500/month that's £100 more tax paid/reduced take home pay.

When they look at their payslip, that's more tax and less take home pay.

Personally I there is quite some difference between someone on 60k looking at their payslip Vs someone who is fortunate enough to add additional money to a pot(s) outside of PAYE and/or in lieu of savings/ISA or future inheritance tax.

Regardless of anything my central point is, personally I don't think someone on 60k a year putting 5% of their salary a month into a pension by PAYE is the problem. I think it's an easy target when there are much much bigger problems that need sorting.
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It's only reducing as they're dodging tax to a lesser degree than they otherwise would have, it's not like they're paying more tax than the rate of the band which they're in. I don't really see a problem with that reducing, as a higher rate payer, but I understand why some would want to be able to doge tax as much as possible, especially if they're just into that band etc. Personally I'd rather pay the tax (if everyone else is, especially those well high up this and higher bands), and then that tax or more relief goes to those who need it more.

£100 a month is probably largely un-noticeable to someone who is paying, or can afford to pay £500 a month into their pension. That £100 is only about 2.5% of a 50k monthly wage. But like the thread is kind of about, for those who need winter fuel payments that could be eat or heat. I'd rather they have both and I'll skip a night out a month.
 
Andy, I agree with your sentiments about paying more tax so that vulnerable people get the support they need

My problem with what we are talking about here is that I would hope the government would go after the REALLY well off first, before targeting those who are a bit better off than average

If also like to see more done to make the tax system recognise household income and circumstances when there is marriage and kids involved - however that's a different thread altogether
 
Andy_W said:
It's only reducing as they're dodging tax to a lesser degree than they otherwise would have, it's not like they're paying more tax than the rate of the band which they're in. I don't really see a problem with that reducing, as a higher rate payer, but I understand why some would want to be able to doge tax as much as possible, especially if they're just into that band etc. Personally I'd rather pay the tax (if everyone else is, especially those well high up this and higher bands), and then that tax or more relief goes to those who need it more.

£100 a month is probably largely un-noticeable to someone who is paying, or can afford to pay £500 a month into their pension. That £100 is only about 2.5% of a 50k monthly wage. But like the thread is kind of about, for those who need winter fuel payments that could be eat or heat. I'd rather they have both and I'll skip a night out a month.
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I don't think it's dodging tax, it's certainly not even equivalent or even comparable to something like tax avoidance schemes. There were huge numbers of people getting this allowance that didn't need it. That was dumb. Even more dumb even criminal is punishing those that did by removing it from those most in need. I'm of the view nobody in this country should be cold, hungry, without a roof over their head, a proper education and a healthcare system fit for purpose. I take the view that it isn't that we can't afford these things, we choose not to. The usual line that we can't afford or have no money is generally over simplified claptrap. Everyone knows where the money is, it's tied up in the trickle down economics that doesn't trickle down anywhere but flows outside the country.

Contrary to what you might think from my posts, I'm generally in favour of a larger state/higher taxes for better services and welfare, I believe the state should be there to support anyone in real need and down on their luck and I'd be first in line to pay my share towards it.

I just don't think an idea like this is the right way to achieve it, and I think there are way better targets to increase tax take. These ideas are blunt instruments that lump people together that are not the same. A pensioner that can't afford to heat their house is not the same as one that uses the money towards a holiday. Someone that earns 60k putting 5% a month into a pension isn't the same as someone who earns 150k and puts £60K a year into their pension to avoid tax and even worse inheritance tax. I just feel things are more nuanced than that.

I should add even further I'm not even arguing from my own position. I am fortunate and lucky, I will be fine. It just grinds my gears when we are chasing the wrong (IMO) targets and are essentially telling people on 20% tax thresholds that it's the people on 40% that are the problem. They're not.
 
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Alwaysaborolad said:
I bet the OAP that voted Labour are glad they did, Taxes will go up in the next budget, and then the working man will be paying for the public sector pay rises. we will see the real Labour government soon, they will f**k it up, they always have done whenever in office.
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They would have to go up regardless who won the election. unless you want vital services decimated further. Which is it?
 
Alwaysaborolad said:
I bet the OAP that voted Labour are glad they did, Taxes will go up in the next budget, and then the working man will be paying for the public sector pay rises. we will see the real Labour government soon, they will f**k it up, they always have done whenever in office.
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As opposed to the fantastic job the Tories have done the last 14 years.

Tax highest since WW2 and ever widening rich poor divide.

Thank goodness they have been kicked out.
 
festa5 said:
The flaw in that is that house valuations aren't necessarily that accurate and is it fair to increase someone's tax just because their house valuation has gone up?

Just because someone lives in a £500k house doesn't mean they're earning enough to afford a £500k house. They could have bought it when it was worth half that (eg. mine has gone up 30 - 40% in about 3 years as I'm sure have lots of peoples).

I mean yes, you could move in that curcumstance. But do you really want a system driving people out of family homes due to the whim of the housing market?

Agree the current system isn't great either mind.
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True but the current council tax bands were done by drive by surveys in the early 1990s.

If you disagree with the zoopla valuation you can appeal it.

Something has to change.
 
Redpete said:
No they will not.
Have you not read this thread, according too Age UK 2 million of the most needy old age pensioners will no longer receive the winter fuel allowance according to there spokesman they will have to choose to eat or heat.

Heres a link just for you.

Heartless Labour government
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Thanks for that, the problem appears to be mainly that those elderly who are entitled to benefits, for whatever reason, do not or don’t know how to claim them, it is a lot more than a few hundred pounds towards the fuel bills they are missing out on.

You would think their families would help them with the claims wouldn’t you?
 
HolgateCorner said:
Thanks for that, the problem appears to be mainly that those elderly who are entitled to benefits, for whatever reason, do not or don’t know how to claim them, it is a lot more than a few hundred pounds towards the fuel bills they are missing out on.

You would think their families would help them with the claims wouldn’t you?
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It’s more than just unclaimed benefits. The threshold for pension credits is very low.
 
There is several hundred of us on this Board.

We should all check our own relatives over 65 and have a sensitive chat with them about Pension Credit. I have done with mine.

Key figures are £218.15 per week if single or £306.85 for a couple. If income is below this claim Pension Credit.

Divorced older women tend to be most at risk from missing out - often they only have the state pension and its not the full amount.
 
gramercy said:
Mother in law is couple of quid over the amount where the pension credits stop. She’ll not get the payment this winter. It made a massive difference to her as her income is minuscule.
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And there are many many many more like this who are not entitled to pension credit because they are just over the limit who will lose their payments.

About 1.2 million according to Age UK who just over the entitlement limit.
This policy is either badly thought out by the government or they don't care about the most vulnerable in society. Either way its not a good look.
 
RedAsABeetroot said:
"Some of those who need the payment will still get it" is more accurate.
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See my post above, I acknowledge some will still fall between the cracks.

It is ridiculous that a few million old people are so hand to mouth that they rely on a specific state handout to heat their homes, that is the bigger issue that needs addressing by Labour.

A few scraps off the table when you are desperate is far too Tory for me but that is where we are just now I’m afraid.
 
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