The Budget

vivatifosi

For me, one of the most interesting points was that once the country is back in surplus, the plan to change the law so that the government can't run a deficit unless GDP growth is 1% or lower. Almost Keynesian.

If it goes through, that could shape the country for many years.

jimibaboza

kabayiri wrote: »

Notable omissions anyone ?

My take : not much on OAPs costing the state £100bn of that £250bn bennies bill. No suggestion of means testing the state pension.

I guess the blue rinse brigade in Knutsford would ambush him outside Waitrose if that happened.

The sad truth is that addressing the pensions will cost the government a huge amount of support and hand the opposition a major advantage in the next election. I doubt this will ever be looked at.

kabayiri

vivatifosi wrote: »

For me, one of the most interesting points was that once the country is back in surplus, the plan to change the law so that the government can't run a deficit unless GDP growth is 1% or lower. Almost Keynesian.

If it goes through, that could shape the country for many years.

Then again...didn't Gordon Brown have the Golden Rule once upon a time?

He just loaded up on the PFI credit card instead.

MFW_ASAP

kabayiri wrote: »

Notable omissions anyone ?

My take : not much on OAPs costing the state £100bn of that £250bn bennies bill. No suggestion of means testing the state pension.

I guess the blue rinse brigade in Knutsford would ambush him outside Waitrose if that happened.

With a nation of debters, is it really a good idea to punish people for being sensible and putting a little by for their old age?

Much better to means test/ stop the benefits they receive that are above and beyond their pension such as free TV licenses and free bus travel, etc.

cells

theEnd wrote: »

My interpretation may well be wrong. The details will be interesting. Quite a big deal for me.

From what I understand its an increase in tax for everyone who receives dividends outside of a pension/ISA which on my first understanding is a bit !!!!

from the interweb

Under the reforms every investor will be entitled to £5,000 of dividends tax free. The rates will then be 7.5% for basic rate taxpayers, 32.5% for higher rate taxpayers, and 38.1% for additional rate taxpayers.

Dividends held in ISAs and pensions will continue to be tax free.

Osborne said the changes would mean around 85% of investors would pay less tax.

The changes will come into force next year.

There is currently a 10% tax rate on dividends for basic rate taxpayers, up to £31,785 on top of the personal allowance for the 2015/2016 tax year.

A 32.5% rate is paid on dividend income between the higher rate threshold (£31,786) and the additional rate threshold (£150,000).

Osborne said: ‘I am today undertaking a major and long overdue reform to simplify the taxation of dividends. The dividend tax credit will be replaced with a new tax-free allowance of £5,000 of dividend income for all taxpayers.’

MFW_ASAP

Thrugelmir wrote: »

They'll have to remain living at home, or gain the necessary qualifications or training to get a decent job.

Or do what I did and just rent a room in a shared house. It's amazing that despite having so many advantages in being a citizen of the First World, that there are still some people who expect a leg up.

They could learn a lot from the poor people who are literally dying to get here just for the chance to get a job, any job, and make something of themselves.

It truly is the Entitled Generation.

kabayiri

MFW_ASAP wrote: »

With a nation of debters, is it really a good idea to punish people for being sensible and putting a little by for their old age?

Much better to means test/ stop the benefits they receive that are above and beyond their pension such as free TV licenses and free bus travel, etc.

If old people (and I don't exclude myself) have a desire I think it's to leave a legacy of a sustainable economy to the next generation.

I still think the state is too big for a competitive UK.

Technology and demographics will mean more older people, not less. I worry about this cost area growing.

cells

Dividend Changes:

From what I can understand so far. If you receive £5k of dividends or less you are most likely going to see no tax changes unless you are a higher rate tax payer in which case your dividend tax is actually a little lower

However for people who receive more than £5k a year in dividends the tax they will pay is actually a good deal higher. Often it will be 7.5% of the dividend income higher than before which is quite substantial.

So for example someone who gets £105k worth of dividends will have to pay £7,500 MORE than they previously would have


HOWEVER

If the corporate tax rate is reduced to 19% and then 18% that means companies should have more dividends to give out which could offset some of the higher tax on dividends

Those earning over £140,000 will pay more, while 85 per cent of taxpayers will see no change or be better off,

suggesting that those who earn £140,000 or less will pay the same or less.
Either I dont fully understand it or thats plain wrong. Anyone getting more than £5k dividends will be worse off

vivatifosi

jimibaboza wrote: »

The sad truth is that addressing the pensions will cost the government a huge amount of support and hand the opposition a major advantage in the next election. I doubt this will ever be looked at.

My 2p worth is that they will wait until the new pensions take hold and cut back on the additional funding. I can see a point in the future, probably when I get to retire, where if people haven't saved into a pension and don't have their own house get the luxury of a room in a shared house or some other very basic accommodation.

MFW_ASAP

kabayiri wrote: »

If old people (and I don't exclude myself) have a desire I think it's to leave a legacy of a sustainable economy to the next generation.

I still think the state is too big for a competitive UK.

Technology and demographics will mean more older people, not less. I worry about this cost area growing.

The state pension is small beans compared to the huge liabilities involved with public sector pensions, most which are unfunded and rely on future taxpayers to foot the bill (look at how much council tax is used to fund council pensions!).

Moving everyone off unfunded final and career average pensions and onto money purchase ones would be the best place to start if you're worried about age-related demographics.