Savings and Investments thread

Stig said:

PragueAddick said:

I hope that like many other fine threads on CL this one will be a place where Lifers can share both knowledge and experience to help others. It isn't for "rich" Lifers. It's the way of the modern world that all of us have to try and save for old age. And it is not the place for politics, even though politics affects our decisions. I think the best way to get this going will be if people post some questions about things they are contemplating, puzzled about, scared of. Hopefully some Lifers with the relevant knowledge and experience will reply. So I will start, in the next post

Just posting this as a reminder of the purpose of this thread and that it shouldn't be a backdoor HoC.

valleynick66 said:

cantersaddick said:

Rob7Lee said:

cantersaddick said:

Carter said:

bobmunro said:

Rob7Lee said:

cantersaddick said:

Rob7Lee said:

I saw it on Twitter and immediately called bull, I then put the info myself into a benefit checker (entitled.co.uk if anyone wants to have a go and depress themselves!)

Clearly someone had worked out what the absolute maximum you could get based on circumstance.

£4,287 in benefits (made up of UC and Child allowance and council tax help). £11k a year on minimum wage/16 hours each gives you £6,120 a month.

Someone also made the point that if you also suffer with 'anxiety' (probably from having 5 kids and so much money) you can also get a brand new car on Mobility although I'm not convinced it's that simple!!

I'll get my coat......... someone turn the lights out on the way out

What housing costs assumption did you use in this example? was it a single parent family or 2 parent, what ages are the children? I think some pretty unrealistic and extreme assumptions will have been needed to get these figures. E.g. I think all 5 of the kids will need to be below school age and housing costs would need to be extreme. 

Not saying its impossible but its gonna be extremely unlikely to get numbers like this. 

And it was discussed on the general things that annoy you thread a couple of weeks ago but anxiety alone is not enough for motability. It Needs a few other conditions/criteria to be met alongside that to become eligible.

£1100 rent
Dual parent (hence two x minimum wage salaries x 16 hours each per week)
All school age (5-15).

I don't know the full calculation and exactly what it is made up from as it's an online calculator as linked to above.

As I say, I'm sure this is based on an extreme, but even still there should be no circumstances really where a couple with 5 children are working 16 hours a week each on minimum wage and are getting the equivalent of north of a £100k salary.

!00% agree. The benefits system is/was designed as a safety net - and those in genuine need should be supported. What it should never be is an alternative lifestyle choice, which it is for some. That's the fault of the system, not the individuals.

Its a fair chunk of both in my eyes 

Just because you can do something definitely doesn't always mean you should 

Being out of work is more about lack of purpose, structure and drive. I'm not talking about high performers or over achievers. Not doing that will absolutely wallop your mental health 

For my part, its the societal contract, I don't mind paying tax what I can't abide is how that money is wasted and given to people who have chosen not to take part in their end of the societal contract
 

I completely agree that the social contract has broken down. The other side to that social contract is low pay. the minimum wage was effectively brought in as part of that social contract to say that if you worked 40 hours a week you would be able to provide for yourself and your family and not be in poverty. Unfortunately that side of the social contract has also broken down. We now have massive and growing in work poverty. Thats a real issue and for me is the main factor in why welfare has exploded. Its not that the safety net is too high its that we have had a whole generation of wage suppression which means those in work also need the safety net. Yes there will be a minority who choose not to work but thats not because the safety net is too high but because the pay is too low (otherwise they wouldn't be in poverty).  


https://www.health.org.uk/evidence-hub/money-and-resources/poverty/in-work-poverty-trends

• 65% of children and working-age adults in poverty in 2023/24 lived in families where at least one adult was working part-time or more, up from 56% in 2012/13 and 44% in 1996/97.
• 18% of children and working-age adults in poverty in 2023/24 lived in families where all adults were working and at least one adult was working full-time (referred to here as high work intensity families), which is up from 13% in 2012/13 and 9% in 1996/97.

I don't actually think Minimum wage is the real issue. We are taxing ourselves as a country to the bottom.

Go back a few pages where a lifer talked about closing their business. Now I don't know the ins and outs of that business or the numbers involved, but a clear indication was given that the increased staff costs was a real issue (the increased Min Wage, increased NI levels, no doubt things like compulsory pension contributions also).

In my view the long and short is government expenditure is simply too high. The country cannot continue to spend what it does, it needs to spend considerably less as a %. Of course there are 101 ways that can happen and of course we need to protect the most needy/vulnerable. But unless we have a grown up conversation about that, we are on a race to the very bottom.

Taking your point on minimum wage, on a 40 hour week that will be £26,500 roughly come April. Your saying that isn't enough to live on and remain outside 'poverty' - well from that amount the government are taking £4k in tax and national insurance. Why are we taxing these people who earn the absolute bare minimum? And as we know with the freeze on tax bands and the tax free amount for about another 6 years, that will only get worse assuming minimum wage continues to increase by at least inflation. By the time we get to 2031 the bands won't have really changed for 12 years, is it any wonder the lower paid (in particular but by no means exclusively) are worse off? The tax free allowance was £11k in 2016, it's now 12,570. By simple inflation that should be £15,300 and on an increase of 3.5% per annum that should be £19,000 by 2031.

We can either make some tough decisions, or we can continue the race to the bottom, which compounds year after year. I fear if we continue as is for another few years we will be past the point of it being possible to resolve, if we aren't already there.

I've all but given up that Great Britain will resolve any of these issues in my lifetime, which is why as every day passes it's becoming more and more likely I'll retire early and leave the country and my advice to my two daughters is to do the same.

I completely agree on the bit in bold. Where I disagree is that its expenditure thats the problem. I think what we need to do is redress the balance of where tax comes from.

My brother in law is a small business owner, he has a bespoke house building and barn conversion company. He has for years said similar things to what you're saying here and also things like the minimum wage is too high. I persuaded him to spend some time sat with the public accounts of the national large house builders (with multinational ownership structures and parent companies) in the UK and look at their tax. He realised that he was paying as a proportion of both revenue and profit roughly double the rate of tax they are. How is that small business supposed to compete. My family come from farming - a number of them campaign and leaflet for reform. I got one of them to sit down with the published supermarket accounts and they found a similar story. How are farms meant to survive when 98% of the profit on food goes to large supermarkets with multinational ownership structures with massive oligopoly power and only 2% left for farmers, processors and distributors. 

This is why we need to move the tax burden both from lower-middle earners and small businesses to large corporations and multi nationals and a small number of very wealthy individuals. 

How? Well I've talked in the last few weeks about how I would do this. I have talked about the medicines pricing mechanism and applying that to other sectors like energy, I would also take the model of the digital services tax and go sector by sector and apply an operations tax in the same way on companies whose profits are based overseas. I'd return the bank levy to its post 2008 banking crisis level rather than the version we have now which is massively watered down. Remove the private equity tax relief. Other things like bringing back the investment income surcharge on high amounts, and I still believe in a wealth tax (but on much higher levels - progressive from 1% over £50/100m up to 3% over a billion) plus an exit tax. Possibly moving CGT rates slightly towards income tax rates (which would be coming down a little too). I've probably (definitely) missed a couple other things I've talked about recently.

If we did that we would be able to massively raise the thresholds of income tax and likely reduce the rates too, as well as reduce the burden on small businesses. More cash in peoples pockets means due to the Marginal Propensity to Consume that money is more likely to be spent rather than saved or moved abroad, the velocity of money is also higher at the lower end so you're more likely to get the multiplier effect and so this should boost growth.

I fundamentally believe it is possible to both reduce the tax burden on people earning under say 60K and small businesses as well as fund public services. 

It needs a government willing to take on the oligopoly power of big business. It wont be this one as they are 60% funded by those multinationals. The Tories and reform even more so. The only party not funded by them are the Greens.

So why didn’t we see bolder choices ?

I don’t get it - if you don’t do it whilst you still have a sizeable majority then I assume they won’t next year either. 

So much of this is also back loaded and may well not land before the election cycle starts again. Feels like we will continue to drift along with just tweaks and twiddles. 

I worry more that unemployment short term will rise with AI further draining the economy. Can’t see much that suggests growth and where therefore best to invest. 

I guess the extra tax on savings will also be impacted by falling interest rates too. 

ForestHillAddick said:

cantersaddick said:

Carter said:

bobmunro said:

Rob7Lee said:

cantersaddick said:

Rob7Lee said:

I saw it on Twitter and immediately called bull, I then put the info myself into a benefit checker (entitled.co.uk if anyone wants to have a go and depress themselves!)

Clearly someone had worked out what the absolute maximum you could get based on circumstance.

£4,287 in benefits (made up of UC and Child allowance and council tax help). £11k a year on minimum wage/16 hours each gives you £6,120 a month.

Someone also made the point that if you also suffer with 'anxiety' (probably from having 5 kids and so much money) you can also get a brand new car on Mobility although I'm not convinced it's that simple!!

I'll get my coat......... someone turn the lights out on the way out

What housing costs assumption did you use in this example? was it a single parent family or 2 parent, what ages are the children? I think some pretty unrealistic and extreme assumptions will have been needed to get these figures. E.g. I think all 5 of the kids will need to be below school age and housing costs would need to be extreme. 

Not saying its impossible but its gonna be extremely unlikely to get numbers like this. 

And it was discussed on the general things that annoy you thread a couple of weeks ago but anxiety alone is not enough for motability. It Needs a few other conditions/criteria to be met alongside that to become eligible.

£1100 rent
Dual parent (hence two x minimum wage salaries x 16 hours each per week)
All school age (5-15).

I don't know the full calculation and exactly what it is made up from as it's an online calculator as linked to above.

As I say, I'm sure this is based on an extreme, but even still there should be no circumstances really where a couple with 5 children are working 16 hours a week each on minimum wage and are getting the equivalent of north of a £100k salary.

!00% agree. The benefits system is/was designed as a safety net - and those in genuine need should be supported. What it should never be is an alternative lifestyle choice, which it is for some. That's the fault of the system, not the individuals.

Its a fair chunk of both in my eyes 

Just because you can do something definitely doesn't always mean you should 

Being out of work is more about lack of purpose, structure and drive. I'm not talking about high performers or over achievers. Not doing that will absolutely wallop your mental health 

For my part, its the societal contract, I don't mind paying tax what I can't abide is how that money is wasted and given to people who have chosen not to take part in their end of the societal contract
 

I completely agree that the social contract has broken down. The other side to that social contract is low pay. the minimum wage was effectively brought in as part of that social contract to say that if you worked 40 hours a week you would be able to provide for yourself and your family and not be in poverty. Unfortunately that side of the social contract has also broken down. We now have massive and growing in work poverty. Thats a real issue and for me is the main factor in why welfare has exploded. Its not that the safety net is too high its that we have had a whole generation of wage suppression which means those in work also need the safety net. Yes there will be a minority who choose not to work but thats not because the safety net is too high but because the pay is too low (otherwise they wouldn't be in poverty).  


https://www.health.org.uk/evidence-hub/money-and-resources/poverty/in-work-poverty-trends

• 65% of children and working-age adults in poverty in 2023/24 lived in families where at least one adult was working part-time or more, up from 56% in 2012/13 and 44% in 1996/97.
• 18% of children and working-age adults in poverty in 2023/24 lived in families where all adults were working and at least one adult was working full-time (referred to here as high work intensity families), which is up from 13% in 2012/13 and 9% in 1996/97.

Just to play devil's advocate a bit on these DWP stats. Surely the same stats presented in a different way lead to a different implication. If I were to say:

35% of children and working age adults living in poverty live in families with no working adult

82% of children and working aged adults living in poverty lived in families where either one adult was working full time with remaining adult(s) not working, OR no adults are in full time work 

Then the exact same stats would support the other side of the argument no?

cantersaddick said:

ForestHillAddick said:

cantersaddick said:

Carter said:

bobmunro said:

Rob7Lee said:

cantersaddick said:

Rob7Lee said:

I saw it on Twitter and immediately called bull, I then put the info myself into a benefit checker (entitled.co.uk if anyone wants to have a go and depress themselves!)

Clearly someone had worked out what the absolute maximum you could get based on circumstance.

£4,287 in benefits (made up of UC and Child allowance and council tax help). £11k a year on minimum wage/16 hours each gives you £6,120 a month.

Someone also made the point that if you also suffer with 'anxiety' (probably from having 5 kids and so much money) you can also get a brand new car on Mobility although I'm not convinced it's that simple!!

I'll get my coat......... someone turn the lights out on the way out

What housing costs assumption did you use in this example? was it a single parent family or 2 parent, what ages are the children? I think some pretty unrealistic and extreme assumptions will have been needed to get these figures. E.g. I think all 5 of the kids will need to be below school age and housing costs would need to be extreme. 

Not saying its impossible but its gonna be extremely unlikely to get numbers like this. 

And it was discussed on the general things that annoy you thread a couple of weeks ago but anxiety alone is not enough for motability. It Needs a few other conditions/criteria to be met alongside that to become eligible.

£1100 rent
Dual parent (hence two x minimum wage salaries x 16 hours each per week)
All school age (5-15).

I don't know the full calculation and exactly what it is made up from as it's an online calculator as linked to above.

As I say, I'm sure this is based on an extreme, but even still there should be no circumstances really where a couple with 5 children are working 16 hours a week each on minimum wage and are getting the equivalent of north of a £100k salary.

!00% agree. The benefits system is/was designed as a safety net - and those in genuine need should be supported. What it should never be is an alternative lifestyle choice, which it is for some. That's the fault of the system, not the individuals.

Its a fair chunk of both in my eyes 

Just because you can do something definitely doesn't always mean you should 

Being out of work is more about lack of purpose, structure and drive. I'm not talking about high performers or over achievers. Not doing that will absolutely wallop your mental health 

For my part, its the societal contract, I don't mind paying tax what I can't abide is how that money is wasted and given to people who have chosen not to take part in their end of the societal contract
 

I completely agree that the social contract has broken down. The other side to that social contract is low pay. the minimum wage was effectively brought in as part of that social contract to say that if you worked 40 hours a week you would be able to provide for yourself and your family and not be in poverty. Unfortunately that side of the social contract has also broken down. We now have massive and growing in work poverty. Thats a real issue and for me is the main factor in why welfare has exploded. Its not that the safety net is too high its that we have had a whole generation of wage suppression which means those in work also need the safety net. Yes there will be a minority who choose not to work but thats not because the safety net is too high but because the pay is too low (otherwise they wouldn't be in poverty).  


https://www.health.org.uk/evidence-hub/money-and-resources/poverty/in-work-poverty-trends

• 65% of children and working-age adults in poverty in 2023/24 lived in families where at least one adult was working part-time or more, up from 56% in 2012/13 and 44% in 1996/97.
• 18% of children and working-age adults in poverty in 2023/24 lived in families where all adults were working and at least one adult was working full-time (referred to here as high work intensity families), which is up from 13% in 2012/13 and 9% in 1996/97.

Just to play devil's advocate a bit on these DWP stats. Surely the same stats presented in a different way lead to a different implication. If I were to say:

35% of children and working age adults living in poverty live in families with no working adult

82% of children and working aged adults living in poverty lived in families where either one adult was working full time with remaining adult(s) not working, OR no adults are in full time work 

Then the exact same stats would support the other side of the argument no?

Not sure that really changes the story from how I read them. Still pretty stark. 35% is ridiculously low and goes against the narrative that its a majority of people who are lazy and not working. If it was all about work vs lazy then that number would be massively higher. One parent working part time to manage childcare arrangements should not be something that pushes a family into poverty.