The Most Important Document You Will Never Read....

Graham_Devon

RenovationMan wrote: »

Get a better paid job, or a part time job to raise your income. If you have kids then make sure you are getting your CB, CTC and WTC. If your income is so low, then you can have your council tax reduced.

This link provides details of the benefits you are entitled to if you have a low income:

http://www.turn2us.org.uk/benefits_search.aspx

WTC and CTC actually increase if you are contributing to a pension. They deduct pension contributions from your income before they make the calculation to see what you are entitled to.

You can't just magic up a better job reno....the whole worlds poverty would be sorted if this was the case and it was oh so easy.

And all of that still doesn't change the fact that apparently having a roof over your head is seen as a "choice".

We appear to be drifting away from reality again I fear.

wotsthat

Graham_Devon wrote: »

Sure, people can do away with some things, but the cost of council tax and housing you simply cannot avoid. Would you seriously tell me that it's my fault for not saving for a pension as I "chose" to put a roof over my families head?

It's a fairly simple concept that LM proposes. Say you earn £30k a year then simply live like you earn £26k and save the £4k. Two advantages (1) you're saving and building some security and (2) when you retire you will be used to living on £26k rather than £30k so the drop in income is less of a shock.

It's obviously harder to do the lower down the income scale you get but for all the people who are on £18k who say they simply 'can't' live on, say, £16k are wrong because there will be examples of people on £16k doing just that.

People make choices all the time. It's quite emotive to say that you 'chose' to put a roof over your families heads rather than save but, in reality, few people have to make that direct choice.

RenovationMan

Graham_Devon wrote: »

You can't just magic up a better job reno....the whole worlds poverty would be sorted if this was the case and it was oh so easy.

And all of that still doesn't change the fact that apparently having a roof over your head is seen as a "choice".

We appear to be drifting away from reality again I fear.

We're not talking about the whole world, you do indeed seem to be drifting from reality. We are talking about this country and there are millions of people who change jobs for financial reasons. It's hardly an 'off the wall' suggestion....

However, that was a small part of what I posted. What about the WTC, CTC, etc?

wotsthat

Graham_Devon wrote: »

You can't just magic up a better job reno....the whole worlds poverty would be sorted if this was the case and it was oh so easy.

We're really talking about the UK. People could look at the qualifications they left school with - could they do a couple of GCSE's, could they do some retraining or fit in some volunteering. There's no magic solution but if someone is young enough what's the problem with spending 5 years making themselves more employable?

There's no magic required - just some effort and a bit of luck always helps.

Graham_Devon

wotsthat wrote: »

It's a fairly simple concept that LM proposes. Say you earn £30k a year then simply live like you earn £26k and save the £4k. Two advantages (1) you're saving and building some security and (2) when you retire you will be used to living on £26k rather than £30k so the drop in income is less of a shock.

It is a simple concept, and that's the problem.

The net wage on 30k is £22,762, or £1,896 a month.

If you are going to save 4k a year, then you leave yourself with £1,550 a month to live on.

Rent at £600 a month
Council tax at £120 a month
Gas & Electric at £60 a month (generous)
Water at £30 a month
Food, clothes, other general living items (toothpaste, over cleaner etc) £150 a month (very generous).
Car & Other related car maintenence (without any unforseen bills) £150 a month
Fuel £150 a month (for anyone travelling the average 30 miles a day).

Oops, I've only got £200 left to pay for everything else, including any items I need to buy (bed, fridge, literally anything).....any child maintenance payments, any telecommunication payments, any debt payments, any health (dental etc) payments, any car parking charges, any prescriptions, literally anything.....

Any two or three of those things crop up....car needs a new tyre or two? Oops....I'm in debt.

As I said....too simple...and void of reality.

RenovationMan

wotsthat wrote: »

It's obviously harder to do the lower down the income scale you get but for all the people who are on £18k who say they simply 'can't' live on, say, £16k are wrong because there will be examples of people on £16k doing just that.

Why speculate. Lets create a single dad who has a son and is on £18k per with £1000 per annum council tax and lives in his own home and has £100 child care per week.

He earns £18k and puts £2k into a pension:

This is what he will receive:

Tax Credits - £7,618.10
Council Tax Benefit - £0.00
Child Benefit - £1,058.50
Total Entitlements - £8,676.60

If he contributes £4k per year to a pension:

Tax Credits - £8,438.10
Council Tax Benefit - £0.00
Child Benefit - £1,058.50
Total Entitlements - £9,496.60

So by putting a further £2k into a pension, he will lose £1600 from his wage (remember pensions have 20% tax rebate) and he will receive and extra £820 in benefits and so for a £2k gain it costs him £780.


EDIT: if he makes no contribution to a pension:

Tax Credits - £6,798.10
Council Tax Benefit - £0.00
Child Benefit - £1,058.50
Total Entitlements - £7,856.60

So zero contribution to a pension and so his net income goes up by £1600 per year and his benefits go down by £820. So by not contributing £2000 to a pension, he saves himself £780.

Graham_Devon

RenovationMan wrote: »

We're not talking about the whole world, you do indeed seem to be drifting from reality. We are talking about this country and there are millions of people who change jobs for financial reasons. It's hardly an 'off the wall' suggestion....

However, that was a small part of what I posted. What about the WTC, CTC, etc?

For WTC and CTC don't you have to have kids living with you? Indeed, you wouldn't get much on the 30k proposed by wotsthat.

And indeed, if you do have kids to look after, my sums change completely, and make them a whole lot worse. Nothing CTC and WTC or any other benefits could control.

The figures are there, and they are pretty true figures. We can all talk airy fairy what if's ,but try looking at the actual figures, and if you can cut anything out and do more with that 30k while saving 4k towards a pension, I welcome you to do so.

You could share, but that £600 rent is based on a 1-2 bed flat down here, which doesn't leave much scope to sharing....indeed, sharing isn't really viable with kids if you want the WTC and CTC route.

Sometimes you need to leave your "I've just bought a holiday home or 4th BTL" bubble to realise what you are talking is nonsense. You need to look at how others live. Not at how you live, as quite obviously, quite a few around here are very privileged compared to general society. It's usually those people suggesting airy fairy nonsense. You with your 450k mortgage and high flying job (allegedly), wotsthat with his holiday home, Hamish with his 100k income, others with BTL portfolios....not just one house, but many. They are all the people who seem to suggest everything is a lot easier than other people appear to suggest, and theres a lot in that.

wotsthat

Graham_Devon wrote: »

It is a simple concept, and that's the problem.

The net wage on 30k is £22,762, or £1,896 a month.

If you are going to save 4k a year, then you leave yourself with £1,550 a month to live on.

Rent at £600 a month
Council tax at £120 a month
Gas & Electric at £60 a month (generous)
Water at £30 a month
Food, clothes, other general living items (toothpaste, over cleaner etc) £150 a month (very generous).
Car & Other related car maintenence (without any unforseen bills) £150 a month
Fuel £150 a month (for anyone travelling the average 30 miles a day).

Oops, I've only got £200 left to pay for everything else, including any items I need to buy (bed, fridge, literally anything).....any child maintenance payments, any telecommunication payments, any debt payments, any health (dental etc) payments, any car parking charges, any prescriptions, literally anything.....

As I said....too simple...and void of reality.

I'm not going to argue the detail as the principle is sound and we'll just end up arguing about whether they could cycle to work etc.

Your example above demonstrates that someone earning £30k can't save £4k. How do people manage on £26k then? Would you allow them to save £2k?

The 'easy' thing to do is spend 100% of earnings. Down that road lies an impoverished bitter retirement and years of worry for any unfortunate offspring.

Graham_Devon

RenovationMan wrote: »

Why speculate. Lets create a single dad who has a son and is on £18k per with £1000 per annum council tax and lives in his own home and has £100 child care per week.

He earns £18k and puts £2k into a pension:

This is what he will receive:

Tax Credits - £7,618.10
Council Tax Benefit - £0.00
Child Benefit - £1,058.50
Total Entitlements - £8,676.60

If he contributes £4k per year to a pension:

Tax Credits - £8,438.10
Council Tax Benefit - £0.00
Child Benefit - £1,058.50
Total Entitlements - £9,496.60

So by putting a further £2k into a pension, he will lose £1600 from his wage (remember pensions have 20% tax rebate) and he will receive and extra £820 in benefits and so for a £2k gain it costs him £780.

Yes, great. But you haven't even looked at living costs. Apply living costs and you might find the elephant. How does the single dad work full time and bring up the child for instance? Large elephant that one...one which you haven't allowed in your figures.

RenovationMan

Graham_Devon wrote: »

For WTC and CTC don't you have to have kids living with you?

You said that "I 'chose' to put a roof over my families head?", so I did the calculations for someone who was putting a roof over his family's head.

Are the parameters changing now?