How much to live on

Albermarle

Organgrinder said:

Well another month of stoozing done (to aid with how much I will have to live on).

That's £16,000 this year give or take, earning over 5% tax free interest. Mostly generated from spending on interest free credit card accounts which still have 10 months to run. Obviously a big note in the diary to pay these off in full!

Still lots of bank switching offers about, though after several switches last year I'm not eligible.

A couple of big dates coming up in the next few months. Eg regular saver maturing.

Also doing a little bit of private tutoring.

Next step is to cut my higher rate tax bill to zero by topping up my private pension. Our crazy tax system let's us avoid 40% tax by putting it in a pension where we can take 25% of it tax free and only pay 20% tax on the remainder. 

Eg I owe the tax man £1000. So I put £4000 into a pension. He tops this up by £1000 so I now have £5000 but he also wipes out the £1000 I owe him as I've only had 20% tax relief and not 40%.

Out of this £5000 I can take £1250 tax free with 20% tax on the remainder. So it's net worth to me in total is £4250.

So had I not put it into the pension I would have had a net £3000. £4000 minus the £1000 I owe HMRC.

By putting it into the pension it's net value is £4250, a whopping 41.6% increase. 

Bonkers.

 So I put £4000 into a pension

I am thinking that the £4000 is maybe after tax ( @20%) so if you take that into account then the gain is not as high as 41.6% . Depends how you look at it I guess.

Bravepants

[Deleted User] said:

Organgrinder said:

Well another month of stoozing done (to aid with how much I will have to live on).

That's £16,000 this year give or take, earning over 5% tax free interest. Mostly generated from spending on interest free credit card accounts which still have 10 months to run. Obviously a big note in the diary to pay these off in full!
....

Seems very unfair to me. Those with least end up paying more not knowing about all the tax loopholes.
In my world higher rate tax payers would get less tax relief than basic rate tax payers on any pension contributions.

My main disagreement with MSE Forum is that some of the boards contain people who want to get the most out of the system and put the least in even if they have the means to do so. Gone are the days when the forum existed mainly to help the average person get out of debt and manage finances properly.  Many areas have been taken over by the well off wanting to be even better off.

@organgrinder some of your posts may be suited sorted to the Savings and Investment area of the forum. They don't seem to be that much about how much I need to live on, but rather look how much I have made lol!

The whole point of such tax relief is an incentive to try to encourage people to save money for their old age / retirement, thus reducing their reliance on benefits. So save some tax now to avoid spending tax payers' money in the future. Many of my friends and acquaintances don't understand this. They spend all their money, saying how they don't understand pensions, and then later on complain that the State Pension is not enough to live on!

Organgrinder

Albermarle said:

 So I put £4000 into a pension

I am thinking that the £4000 is maybe after tax ( @20%) so if you take that into account then the gain is not as high as 41.6% . Depends how you look at it I guess.

I used net values for both as this is what it means in my pocket. 

As a way of using the current tax system to my advantage I totally agree with you. I would be crazy not to.

Now, I feel like I am going to repeat myself. But I will address this "look at me" suggestion. 

Personally getting a few thousand pounds over a couple of years hardly puts me in Warren Buffet territory. But it allows me to buy things I wouldn't otherwise afford.

I post my successes so others may do likewise. I don't complain that I cannot afford certain things then refuse to contemplate getting extra money to do so.

It is also very disingenuous for anyone to claim they've never been on these boards before when it's rather obvious to all and sundry that they have, even in so far as to talk about "the old days" which rather contradicts the "never been here before" nonsense. It does not take a forensic scientist to spot posting styles, eg "lol" in sentences, let alone clear similarities in earnings, lifestyle, purchases and, shall we call it "lounge wear".

As I've said before, it is nobody's job to police the forums, save for those admins tasked to do it. Noone has to read a post, especially when anyone who has been here before knows the sort of things I post. 

So, there we are then.

MarzipanCrumble

#Organgrinder has told us that maths is one of their skills - which makes what Organgrinder does low risk because they understand what any consequences are.  

I admire Organgrinder and wish I had the confidence and skill to do it too - but I am risk adverse mostly, but sometimes go risk I don't care.  And often it ends not well.

Organgrinder

MarzipanCrumble said:

#Organgrinder has told us that maths is one of their skills - which makes what Organgrinder does low risk because they understand what any consequences are.  

I admire Organgrinder and wish I had the confidence and skill to do it too - but I am risk adverse mostly, but sometimes go risk I don't care.  And often it ends not well.

Thank you for your kind words.

Albermarle

Organgrinder said:

Albermarle said:

 So I put £4000 into a pension

I am thinking that the £4000 is maybe after tax ( @20%) so if you take that into account then the gain is not as high as 41.6% . Depends how you look at it I guess.

I used net values for both as this is what it means in my pocket. 

As a way of using the current tax system to my advantage I totally agree with you. I would be crazy not to.

Now, I feel like I am going to repeat myself. But I will address this "look at me" suggestion. 

Personally getting a few thousand pounds over a couple of years hardly puts me in Warren Buffet territory. But it allows me to buy things I wouldn't otherwise afford.

I post my successes so others may do likewise. I don't complain that I cannot afford certain things then refuse to contemplate getting extra money to do so.

It is also very disingenuous for anyone to claim they've never been on these boards before when it's rather obvious to all and sundry that they have, even in so far as to talk about "the old days" which rather contradicts the "never been here before" nonsense. It does not take a forensic scientist to spot posting styles, eg "lol" in sentences, let alone clear similarities in earnings, lifestyle, purchases and, shall we call it "lounge wear".

As I've said before, it is nobody's job to police the forums, save for those admins tasked to do it. Noone has to read a post, especially when anyone who has been here before knows the sort of things I post. 

So, there we are then.

Now I understand your previous post 

But recently, elevated to the Lords I see.

Welcome back.

Organgrinder

Albermarle said:

Now I understand your previous post 

To quote from a favourite film:

"Only the true Messiah denies his divinity"

WYSPECIAL

Albermarle said:

Organgrinder said:

Albermarle said:

 So I put £4000 into a pension

I am thinking that the £4000 is maybe after tax ( @20%) so if you take that into account then the gain is not as high as 41.6% . Depends how you look at it I guess.

I used net values for both as this is what it means in my pocket. 

As a way of using the current tax system to my advantage I totally agree with you. I would be crazy not to.

Now, I feel like I am going to repeat myself. But I will address this "look at me" suggestion. 

Personally getting a few thousand pounds over a couple of years hardly puts me in Warren Buffet territory. But it allows me to buy things I wouldn't otherwise afford.

I post my successes so others may do likewise. I don't complain that I cannot afford certain things then refuse to contemplate getting extra money to do so.

It is also very disingenuous for anyone to claim they've never been on these boards before when it's rather obvious to all and sundry that they have, even in so far as to talk about "the old days" which rather contradicts the "never been here before" nonsense. It does not take a forensic scientist to spot posting styles, eg "lol" in sentences, let alone clear similarities in earnings, lifestyle, purchases and, shall we call it "lounge wear".

As I've said before, it is nobody's job to police the forums, save for those admins tasked to do it. Noone has to read a post, especially when anyone who has been here before knows the sort of things I post. 

So, there we are then.

Now I understand your previous post 

But recently, elevated to the Lords I see.

Welcome back.

As soon as I read their first post I was thinking along the same lines as you!
I can't understand the denial.

MarzipanCrumble

They may just want to drop the past baggage and start anew.

SouthCoastBoy

When a higher rate tax payer gets tax relief, they are only being refunded the tax they would have paid, they are not receiving any additional money. It's open to all there are no restrictions on who is allowed to be a higher rate tax payer.

IMO, the biggest problem with the UK is the benefits bill for working age people, and too many people not working.