Maybe we have very different definitions of "reasonably paid" and "generous final salary pension" then. Chief Execs and heads of big departments maybe, but the ordinary grunts on the ground, no. And people in the public sector who were contracted out of SERPS because they are in an occupational pension scheme are also having to pay extra NI due to the introduction of the single tier pension scheme, and have been since last year, but I don't remember the tabloids being outraged about that.
I am not talking Chief Execs or even middle management. My sister worked 25 years as a PC. No easy job by any means. But she is now one of the better off people I know. 'Retired' at age 50.
Nice to get a pension of any sort in your fifties. I need to work until I am 68 to get a state basic one.
Yeah, I wouldn't call being a PC a "low risk position", and I should imagine their pension scheme takes into account the increased likelihood of early retirement, given officers of her vintage pay 14-15% pension contributions on top of their NI. And like most public sector schemes it's been reformed in recent years, so newer entrants may pay a little less pension contribution, but more NI, and get less generous benefits for it.
Anyway, my issue is not really the benefits others do get. It is the taking away of incentives to either be self-employed or to declare earnings fully (for those who operate in cash). If you listen to May, it seems she contrasts the self-employed to 'ordinary working families'. Joke.
In the main we are all paying more tax and getting less for it (inc high earners). Depends on your definition of higher earners but say £120k+ They have seen quite a large increase in the tax they pay over the last 10 years. Loosing their tax free allowance meaning anyone earning 120k pays 62% tax between 100k and roughly 123k. Higher rate comes in much lower as well, 45p band at £150k, reduction in the tax benefit on pension contributions etc etc.
I'd like to see more done for those on average wages but of course to do so someone has to pay..... I'd like to see the personal allowance nearer £20k.
Good luck to those who have a final salary pension, those who don't start saving as soon as you start work!!
Income tax or corporation tax are far and away the 'fairest' taxes but government shies away from that out of cowardice or even from collecting the latter from the big corporations.
I don't earn anything like £120k but if I was lucky enough to, I would not have a problem with higher rates of income tax as earnings increase.
Yes, you always have to appreciate that the self emloyed create wealth. one of the issues is that there are different types of self employment so you can have somebody who was say employed by the government who leaves that job, becomes self employed and contracts their services at a higher price doing the same job. I think people need to consider the value of that to the public purse, but it can be cost effective - I appreciate that too.
This type of self employment is different to small businesses creating wealth, tax reciepts and paying people. And maybe it would be good for governments to acknowledge the difference. The real question is will £250 a year stop people going self employed? -I don't think so. But the wrong attitude towards these important wealth creators may.
I do think executive pay and tax avoidance need to be tackled and wonder why they are not. There are CEOs who deserve every penny they get, but there is a scam that goes on in this world of high earners. This year's star performer may be next years loser - but losers get looked after because it may be you tomorrow. So you get somebody who gets a silly salary, makes a pigs ear of it, but still gets a massive pay-off. If you squeeze ordinary workers it is a form of elitist corruption in my opinion.
I think rail companies can and should be run by a set of principles - with safety, service, value and customers at the top of the list. They don't need to pay staff silly money. Yes, public services without the correct checks can be wasteful, but it doesn't have to be and that should be the way forwards for these type of services. Not silly money to people with their snouts in the trough.
Income tax or corporation tax are far and away the 'fairest' taxes but government shies away from that out of cowardice or even from collecting the latter from the big corporations.
I don't earn anything like £120k but if I was lucky enough to, I would not have a problem with higher rates of income tax as earnings increase.
Agreed and neither do I, but there does seem to be a general view at times that higher earners somehow avoid tax or don't pay their fair share in recent years. I'm not complaining as I earn a good living but I am paying somewhere in the region of £1k a month more in tax or lost tax benefit than 10 years ago (assume the same salary).
To be honest, if you looked at our tax system and started again from scratch - you would only have one tax -income tax. Easier to collect and harder to avoid - everybody knows where they stand and no more stealth taxes.
60% drop in tax allowance for those set up as a limited company. Rise in NIC contributions for self employed even though we don't get holiday or sick pay and can't claim benefits.
Absolute joke, self employed and small business owners another couple of groups on the long list of people the tories screw over.
Look who's untouched again? Ah yes, pensioners, the ones who got us into this mess.
Quite a good rant until you got to that point.
Are pensioners to blame because they are not dying fast enough for your liking?
Nope, they're to blame, or rather successive governments that they voted for are to blame for esssentially mortgaging the future of younger people so they can have a cushty life relative to young people from the same background.
Which of the two is it - pensioners or successive governments?
I do believe (I am a pensioner and not planning to kick the proverbial bucket just yet) that my generation had it slightly easier that the current generation; that is not to say we had it easy. Being born just after the second World War was very difficult for many people like me; never had a holiday, largely wearing 2nd hand clothes, no family car etc etc. When I left school in 1962, I recall there being a whole range of unskilled jobs available for people (which is perhaps not the case today). Furthermore, buying a house in the 70s was easier than today (size of deposit needed) but at some point therafter I recall house interest rates rising to 15% or thereabouts. I had to move out of London to afford my first house. I also enjoyed an advantage that the current generation wont receive, which is that of a "Golden Handshake" pension.
So, on balance, given the factors above, I would judge that many of the current pensioners, NOW, and only NOW enjoy the fruits of their life. It remains to be seen how our lifestyle/quality of life will compare with that of the current generation when they reach pension life.
From what I can tell (and don't quote me on this, I wasn't alive then) governments are made up of people, who are voted for by people. Baby boomers were and remain the largest block of voters, thus if the majority vote a specific way, the extreme likelihood is that party would form a government.
As for reaching pension life... to be honest I doubt we'd be able to get a pension at this rate, or at least reach pension age as it would have to be pushed up considerably at this rate.
Money has to be put away for pensions today, as much as they were in my day. Nothing changed there, except the potential size of the pot.
I find it difficult to compare quality of life between different generations. There are pros and cons on both sides. I mentioned in my previous post the advantage that current pensioners had when they were younger in terms of house buying opportunities and today with enhanced pensions. On the other side, disposable income available to today's generation is far far greater than in mine, which can be measured by the number of social activites on tap and peoples' use of them. Many of my generation, as young people, could not afford to eat out, run a car, go on holiday. I guess the quality of life "experience" is different for differing generations.
Where on earth are the young people with disposable income?!i can't afford to do any of the things you mention.
Going back many of the people that you refer to (pensioners) had to do 2 years of national service, and earlier than that they had to fight a bloody war to give some people your age the freedom to bitch and moan that life hasn't handed everything on a plate to you....oh yes and no one my age had a 'gap year' whereby they could ponce of their parents for a year or so, after partying at university for 2-3 years........in the world we live in now, everything is always someone else's fault, do me favour! Life is out there, go out and grab which ever part of it you want.......or sit and wallow in self pity......you choose.
The vast majority of people who are of pension age have never been near a firearm.
Many people who are of pension age did have the opportunity to go to university free of charge, a luxury no longer afforded to today's youngsters.
What utter garbage. I went to Dartford Technical high school for boys left in 1973 at 16, it was a Friday, started work on the Monday, an been lucky an healthy enough to have not had more than two weeks off in the 43 years since. As for Uni being free, no one but the elite went to Uni. I reckon 90% of us left at 16, and of the 10% that did A levels 3 % went to Uni. Now, you all bloody go for the 3 year fun fest !
I'm 59 an most 25 year olds have seen more of this world than I ever will. Because I went to work at 16, and was paying in to a pension at 20.
Sorry can you actually point to me which part of my post was inaccurate? I said many, not all. Just because you didn't go to uni doesn't mean no one else did. It's really not that hard to understand.
Maybe read posts properly before you write it off as utter garbage, you might save yourself the embarrasment.
My embarrassment ? you obviously have a very high opinion of yourself. I hardly think your reply renders me in anyway embarresed. Many may have had the opportunity, few were in a position to avail themselves of it. An in those times, getting the required A levels was quite a challenge, the exams were actually difficult. Unlike today, where no one is allowed to fail, an even a very moderate student can reach the standard required to get accept a Uni.
You still haven't pointed out why my post was 'utter garbage' so I take this as an admission that you were wrong to do so.
By the way - I think there is a fantastic opportunity to try to find a better model in the train industry. You have to design a cheaper/better public owned model, then apply it to a failing company - sacking the franchise ownwers for poor delivery. If it works it grows and if it fails it dies. The problem is with this government - Privitisation is a religion. It is the opposite with the labour party. You don't need the two extremes, you need to see what works best here and what works best there.
I think this should apply to the energy industry too.
To be honest, if you looked at our tax system and started again from scratch - you would only have one tax -income tax. Easier to collect and harder to avoid - everybody knows where they stand and no more stealth taxes.
If you're talking about tax on income, then that was what UKIP once proposed. "UKIP will combine income tax and national insurance into a flat-rate income tax of 31% for all incomes over £11,500." (2010 manifesto). Of course, it soon got dropped when UKIP suddenly realised that pensioners don't pay NICs so their tax bill would rise hugely and that the old were a very large percentage of their potential voters.....
Trying to subsume ALL taxes, VAT, fuel duty, car tax, etc, etc, etc, etc into just one income tax would be an interesting exercise. My guess would be that income tax rates would need to be somewhere around 70%. Would people tolerate that do you think?
No they wouldn't - but they would probably end up payingless tax overall. Yes, the problem would be pensioners if you introduced it now - they would have accrued their money under the old system so avoid tax laibility as a result. If done now, you would probably have to give pensioners a tax bill based of their wealth - but this would be messy and unpopular. This would need to be reduced as future pensioners have contributed under the new system when they are working, until a point (probably 40 years time) is reached where no pensioners have to pay any tax.
So how much extra NI will you have to pay as self employed @Weegie Addick?
Pretty sure it will still be less than the NI I pay as an employee.
And quite right too, employees have loads of rights and access to benefits that self employed people don't have. The pay off for that is that as a self employed person you get paid slightly more and get to keep slightly more of your money than those that are employed. It's a reward for taking a risk and possibly growing to the point where you are a small business and can go on and employ some one else and pay more tax in business rates and maybe eventually also VAT.
Clamping down on those that become self employed simply for tax reasons is fair enough, but why lump in (the majority) of self employed people with them? The industry I work in (film post production) is literally all self employed people because of how feast and famine the work can be, it's simply not realistic for any business to employ people.
Paying into pensions is hard as you could earn nothing for the next month or so and need to keep money aside for that tax and now for even more NICs
Maybe we have very different definitions of "reasonably paid" and "generous final salary pension" then. Chief Execs and heads of big departments maybe, but the ordinary grunts on the ground, no. And people in the public sector who were contracted out of SERPS because they are in an occupational pension scheme are also having to pay extra NI due to the introduction of the single tier pension scheme, and have been since last year, but I don't remember the tabloids being outraged about that.
When contracted out of SERPS you paid lower National Insurance and gave up additional State pension. The NI savings were for you to invest in a pension to replace the State Pension you gave up. The State AVC scheme giving added years was fantastic value. If not, you were choosing to have a smaller overall retirement pension and spend the benefit of not paying for a State pension.
The higher NI contributions now paid means everyone gets the same State pension and there is no choice to "opt out". It means you no longer have to put anything away to make up the State pension you gave up. So the increase in NI is offset by ceasing to pay the savings into a top up pension. It is a neutral position except if you spent the NI savings instead of saving, yout free money has stopped and you can't spend what you are no longer getting.
Blame the idiots who allowed contracting-out, nothing more than a device to allow employers (including the State) to avoid paying for State pensions because they argued they were paying enough already on company pensions. It had the effect of enforced lower pensions on contracted-out employees unless they invested the NI savings. Shame no one had a clue what was going on, least of all the politicians who passed it.
Slightly confused here golfie. If you're a non-worker what money are you getting this tax relief on?
Relief at source means if you save £100 you only pass over £80 to the pension provider who claims £20 from HMRC on the premise you have paid tax on earnings of at least £20. As a non tax payer, as long as you are not paying more than the amount @golfaddick has explained, £300 gross a month, the £20 stays in your pension pot even if HMRC haven't had a bean in tax from you. It's a pension tax credit strictly speaking, but it's processed through the tax "relief" system so it's called tax relief.
@Dippenhall Oh I'm not complaining about the increase in NI as a result of the SERPS changes. As I understand it, this year's NI changes are also driven by the move to the flat rate pension, so was pointing out that other workers have also had their NI contributions increased as a result, apparently without such an outcry.
And thanks for the explanation of the tax relief thing - the fact it's actually a credit makes more sense to me.
Self employed do have it tough... My mate owns a small carpet business he admitted the other day he pays himself 12k a yearr and a nice 100k dividend at the end of the year and pays 19% tax on it.
I earn a third of that and pay twice as much. His fitters who are self employed get to drive about in company vans to and from work and keep them over the weekend and the fuel of course they use can be claimed back.
I'm 35. I started my private pension last year. Probably won't scratch the surface unless I start earning mega money. May be too late and that might have to be another harsh lesson I learn when it comes to my finances.
I don't think the state pension will exist in a few years. I fully expect to have to work up until I die. And do that against a backdrop of a greater population and technology making more jobs obsolete.
It could get quite problematic come my 'time' for retitement for a number of reasons.
Self employed do have it tough... My mate owns a small carpet business he admitted the other day he pays himself 12k a yearr and a nice 100k dividend at the end of the year and pays 19% tax on it.
I earn a third of that and pay twice as much. His fitters who are self employed get to drive about in company vans to and from work and keep them over the weekend and the fuel of course they use can be claimed back.
Self employed do have it tough... My mate owns a small carpet business he admitted the other day he pays himself 12k a yearr and a nice 100k dividend at the end of the year and pays 19% tax on it.
I earn a third of that and pay twice as much. His fitters who are self employed get to drive about in company vans to and from work and keep them over the weekend and the fuel of course they use can be claimed back.
Tough old world.
then why dont you become self employed?
Cos i am happily employed and dont cry about putting an extra couple of percenrt in the coffers.... After all as i am paying more in, I dont get any extra benefit for thosr psying less... Why dont you go full employed then.
So just yesterday Tory politicians were adamant that the proposed changes to National Insurance contributions for the self employed were fair and needed to redress an imbalance. Twenty four hours later we hear that they weren't fair at all and won't now go ahead.
Is it any wonder that people don't have any faith in a single word that comes out of a politicians mouth. All politicians.
Self employed do have it tough... My mate owns a small carpet business he admitted the other day he pays himself 12k a yearr and a nice 100k dividend at the end of the year and pays 19% tax on it.
I earn a third of that and pay twice as much. His fitters who are self employed get to drive about in company vans to and from work and keep them over the weekend and the fuel of course they use can be claimed back.
Tough old world.
then why dont you become self employed?
Cos i am happily employed and dont cry about putting an extra couple of percenrt in the coffers.... After all as i am paying more in, I dont get any extra benefit for thosr psying less... Why dont you go full employed then.
Because in the industry I work in it's almost impossible to be employed, and if you are then you're likely either a mug or not very good at what you do or both.
You do get more benefits than those paying less (self employed) you get sick pay, holiday pay, you get paid when things are quiet, paternity leave etc etc, the list goes on.
Self employed do have it tough... My mate owns a small carpet business he admitted the other day he pays himself 12k a yearr and a nice 100k dividend at the end of the year and pays 19% tax on it.
I earn a third of that and pay twice as much. His fitters who are self employed get to drive about in company vans to and from work and keep them over the weekend and the fuel of course they use can be claimed back.
Tough old world.
then why dont you become self employed?
Cos i am happily employed and dont cry about putting an extra couple of percenrt in the coffers.... After all as i am paying more in, I dont get any extra benefit for thosr psying less... Why dont you go full employed then.
Because in the industry I work in it's almost impossible to be employed, and if you are then you're likely either a mug or not very good at what you do or both.
You do get more benefits than those paying less (self employed) you get sick pay, holiday pay, you get paid when things are quiet, paternity leave etc etc, the list goes on.
Well as i paid 18k in tax and national insurance last year i would like to think that i am entitled to some benefits...but i havent had a day sick in 4 years and before that ten.
Comments
Nice to get a pension of any sort in your fifties. I need to work until I am 68 to get a state basic one.
I'd like to see more done for those on average wages but of course to do so someone has to pay..... I'd like to see the personal allowance nearer £20k.
Good luck to those who have a final salary pension, those who don't start saving as soon as you start work!!
I don't earn anything like £120k but if I was lucky enough to, I would not have a problem with higher rates of income tax as earnings increase.
This type of self employment is different to small businesses creating wealth, tax reciepts and paying people. And maybe it would be good for governments to acknowledge the difference. The real question is will £250 a year stop people going self employed? -I don't think so. But the wrong attitude towards these important wealth creators may.
I do think executive pay and tax avoidance need to be tackled and wonder why they are not. There are CEOs who deserve every penny they get, but there is a scam that goes on in this world of high earners. This year's star performer may be next years loser - but losers get looked after because it may be you tomorrow. So you get somebody who gets a silly salary, makes a pigs ear of it, but still gets a massive pay-off. If you squeeze ordinary workers it is a form of elitist corruption in my opinion.
I think rail companies can and should be run by a set of principles - with safety, service, value and customers at the top of the list. They don't need to pay staff silly money. Yes, public services without the correct checks can be wasteful, but it doesn't have to be and that should be the way forwards for these type of services. Not silly money to people with their snouts in the trough.
I think this should apply to the energy industry too.
Of course, it soon got dropped when UKIP suddenly realised that pensioners don't pay NICs so their tax bill would rise hugely and that the old were a very large percentage of their potential voters.....
Trying to subsume ALL taxes, VAT, fuel duty, car tax, etc, etc, etc, etc into just one income tax would be an interesting exercise. My guess would be that income tax rates would need to be somewhere around 70%. Would people tolerate that do you think?
Clamping down on those that become self employed simply for tax reasons is fair enough, but why lump in (the majority) of self employed people with them? The industry I work in (film post production) is literally all self employed people because of how feast and famine the work can be, it's simply not realistic for any business to employ people.
Paying into pensions is hard as you could earn nothing for the next month or so and need to keep money aside for that tax and now for even more NICs
The higher NI contributions now paid means everyone gets the same State pension and there is no choice to "opt out". It means you no longer have to put anything away to make up the State pension you gave up. So the increase in NI is offset by ceasing to pay the savings into a top up pension. It is a neutral position except if you spent the NI savings instead of saving, yout free money has stopped and you can't spend what you are no longer getting.
Blame the idiots who allowed contracting-out, nothing more than a device to allow employers (including the State) to avoid paying for State pensions because they argued they were paying enough already on company pensions. It had the effect of enforced lower pensions on contracted-out employees unless they invested the NI savings. Shame no one had a clue what was going on, least of all the politicians who passed it. Relief at source means if you save £100 you only pass over £80 to the pension provider who claims £20 from HMRC on the premise you have paid tax on earnings of at least £20. As a non tax payer, as long as you are not paying more than the amount @golfaddick has explained, £300 gross a month, the £20 stays in your pension pot even if HMRC haven't had a bean in tax from you. It's a pension tax credit strictly speaking, but it's processed through the tax "relief" system so it's called tax relief.
And thanks for the explanation of the tax relief thing - the fact it's actually a credit makes more sense to me.
I earn a third of that and pay twice as much. His fitters who are self employed get to drive about in company vans to and from work and keep them over the weekend and the fuel of course they use can be claimed back.
Tough old world.
"As David Cameron was caught on camera saying this week, according to a lip-reader: “Breaking a manifesto promise – how stupid can it get?”
I don't think the state pension will exist in a few years. I fully expect to have to work up until I die. And do that against a backdrop of a greater population and technology making more jobs obsolete.
It could get quite problematic come my 'time' for retitement for a number of reasons.
Shameful by the Labour party for making their in-fighting their priority, rather than forming an effective shadow government.
Shameful by the Tory party for thinking that voters are too stupid to notice when their election promises are broken.
Is it any wonder that people don't have any faith in a single word that comes out of a politicians mouth. All politicians.
You do get more benefits than those paying less (self employed) you get sick pay, holiday pay, you get paid when things are quiet, paternity leave etc etc, the list goes on.
Is it the self-employed? Is it the permanently employed? Is it millennials? Is it pensioners?
Can't help but feel we all think we're hard done by no matter what.