Does anyone else feel penalised for being sensible with money?

Albermarle

 In my mind poverty is about not being able to afford the essentials to live .
That is classed as absolute poverty.

Relative poverty means you just about have enough for the basics, but everything else is a struggle.

MattMattMattUK

Bradden said:

@DullGreyGuy thanks.. you made some good points. I do agree that the gap between the richest and poorest in the UK needs reducing,, ..getting below inflation pay rises in the private sector and then hearing clergy pushing for inflation linked benefits on just seemed unfair to me. Why not just call for all pay rises to be in line with inflation?

My real concern is the seemingly arbitrary poverty level.. Why is it set at 60% and not a lower or higher figure? Should  poverty be a comparative calculation? 

Arbitrary is easier for people to make a big song and dance about, nuance is harder to explain to people. I do not think it should be comparative as that is a measure of inequality rather than poverty. The advantage for the campaigners is that it will pretty much be impossible to every eradicate it based on the relative figure, so giving them a perpetual job. 

DullGreyGuy

MattMattMattUK said:

Bradden said:

@DullGreyGuy thanks.. you made some good points. I do agree that the gap between the richest and poorest in the UK needs reducing,, ..getting below inflation pay rises in the private sector and then hearing clergy pushing for inflation linked benefits on just seemed unfair to me. Why not just call for all pay rises to be in line with inflation?

My real concern is the seemingly arbitrary poverty level.. Why is it set at 60% and not a lower or higher figure? Should  poverty be a comparative calculation? 

Arbitrary is easier for people to make a big song and dance about, nuance is harder to explain to people. I do not think it should be comparative as that is a measure of inequality rather than poverty. The advantage for the campaigners is that it will pretty much be impossible to every eradicate it based on the relative figure, so giving them a perpetual job. 

Remember that relative poverty is based on the median income not the mean income... if you moved the 49.9% of households that earn below the median income up to the median then you havent changed the median and you have eliminated poverty. Obviously you dont need to go as far as that, just move everyone to at least 61% of the median it doesnt change the median and you've still eliminated relative poverty.

You could argue its inequality however that is more commonly looking at the top earners -v- the bottom earners whereas poverty is looking at the midpoint earners and setting an arbitrary line below them. 

Would be interesting to see any analysis on the correlation between median incomes and cost of living

MattMattMattUK

DullGreyGuy said:

MattMattMattUK said:

Bradden said:

@DullGreyGuy thanks.. you made some good points. I do agree that the gap between the richest and poorest in the UK needs reducing,, ..getting below inflation pay rises in the private sector and then hearing clergy pushing for inflation linked benefits on just seemed unfair to me. Why not just call for all pay rises to be in line with inflation?

My real concern is the seemingly arbitrary poverty level.. Why is it set at 60% and not a lower or higher figure? Should  poverty be a comparative calculation? 

Arbitrary is easier for people to make a big song and dance about, nuance is harder to explain to people. I do not think it should be comparative as that is a measure of inequality rather than poverty. The advantage for the campaigners is that it will pretty much be impossible to every eradicate it based on the relative figure, so giving them a perpetual job. 

Remember that relative poverty is based on the median income not the mean income... if you moved the 49.9% of households that earn below the median income up to the median then you havent changed the median and you have eliminated poverty. Obviously you dont need to go as far as that, just move everyone to at least 61% of the median it doesnt change the median and you've still eliminated relative poverty.

You could argue its inequality however that is more commonly looking at the top earners -v- the bottom earners whereas poverty is looking at the midpoint earners and setting an arbitrary line below them. 

Would be interesting to see any analysis on the correlation between median incomes and cost of living

In FY 21 the median household income was £31,400, up from £29,900 in FY 20. How that all comes together gets a bit messy though. 59% of households have someone working, 41% of households have no working people, either due to unemployed (for various reasons, including illness) or retirement. For retired households their income in FY 21 grew 7%.

Covid meses with a lot of the yearly changes for the last few years so it is hard to correlate directly, as is the split between homes with working and non-working residents. The states for "employed" are equally fudged, many of the "in-work" households have two adults, with one adult not working and the other only working 16 hours a week, with the rest of their income being benefits. All the data is such a mess that it is very difficult to draw any concrete conclusions other than the entire system is a labyrinthine mess. 

A household income of £31,400 for a single person living on the edge of Manchester is absolutely fine, they could probably afford to buy a flat or possibly a house, £31,400 for a family of five in Westminster is going to leave them on the breadline. I think we need to fix benefits nationally, housing benefit should not be based on where you live, but on a nationally set allowance, people will have to move to where they can afford to live, just as those who pay for our own accommodation have to. 

MalMonroe

RainbowLaura said:

Just a general vent really, not sure where this belongs.

I always wanted to be a stay-at-home mum, but both my husband and I have always been low earners. We had two choices - just go for it and start claiming benefits, or save like crazy so we could manage by ourselves.

So save we did, for several years, before starting a family. This way, his income could just about cover the bills but we wouldn't have to worry if he lost his job or we found ourselves in financial difficulty. This has worked out really well for the last couple of years, and we were looking forward to using our savings to buy a bigger house once the children are at school and I'm back in work.

With the 2 year energy price guarantee, we'd have been fine. But thanks to the reversal, it's becoming clear that our savings are about to be wiped out on energy bills. 

I can't help but compare myself to my friend, who is also a stay-at-home mum. She and her husband bought the bigger house before having their children, but leaving themselves with hardly anything in the bank. Then, when she gave up work, went on universal credit. Now, they will get plenty of help with her energy bills yet we probably won't. 

I feel so resentful, not towards my friend, but towards a system which does nothing to reward financial responsibility. We will probably never have the bigger house now, all because we were sensible. We'd be entitled to around £400 a month in benefits if we'd just blown our savings instead of trying to do the right thing. I kind of wish we had.

No point to this post really. I just needed somewhere to vent, as it's eating me up a bit at the moment.

Hi, just to say - no, I do not feel penalised at all. Because of a marriage breakdown and single parent-hood, I found myself in a terrible financial situation that built up for years thanks to my using credit cards and loans when I didn't have the income to repay my debts in full.

I was helped by StepChange, one of the free debt help agencies and I am now debt-free. I'm not wealthy by any means but I can now manage my own money, I have never been in receipt of benefits and am self-supporting. If I can't afford something, then I don't have it - and that was a very hard lesson for me to learn!

It's never a good idea to compare yourself with anyone else or be envious of others, including those who need to rely on benefits. I'm very glad that we live in a society that does try to help those in need (not enough but better than nothing) but I would not want to take anything myself as I do believe that there are far more deserving cases out there. 

You say you will probably never have the bigger house now but why would you want a bigger house? More expensive to heat, carpet, decorate, insure. . . etc.  And for what? Just to say you have a bigger house? . 

Now that the government here in the UK is in turmoil, we don't really know what's going to be happening where energy costs help is concerned, so I wouldn't worry about that - and at least we are all getting some relief for 6 months.

It sounds as if you are only young yet, since you say "we were looking forward to using our savings to buy a bigger house once the children are at school and I'm back in work" - it really is far too early for you to be throwing the towel in. You never know what's around the corner, especially when you have ambition as well as a goal in mind.

Of course, we all need to vent sometimes but if you look at your positives, rather than focusing on the negatives, I'm sure you'll find that there are more of the former. 

You have a home, a husband and your children. You felt like you were doing the right thing and I would agree one hundred percent.

There's absolutely no reason why you can't have that bigger house in the future, although I do agree that things seem quite bleak right now.  (Many of us are having rants and vents all over the place!)

But what I think is - well done you and your husband for being self-sufficient and looking after yourselves and your family. You are doing good and long may it continue. Good things will come but it may just take a little bit longer.  

elsien

To answer the original question, no I don’t feel that I’d rather have lived a life on benefits or that I’ve lost out be being financially responsible. 

That maybe because as a single person with a mortgage I’d be living on bog all anyway. It seems to be having children/renting which for some people brings in the additional money. (thinking of an ex colleague of mine who would only work part time to maintain her tax credits even though she got a huge amount of maintenance from her ex-husband which didn’t count as income).
So when I lost my job, I was quite glad to have savings behind me so that I could hold out for a job that I wanted as opposed to having to go and get the first minimum wage one that came along. 

Plus I will have a better retirement than someone living on a state pension and pension credit. 

Some people on benefits do live a very hand to mouth existence -  thinking particularly of people with disabilities here. So would I want the uncertainty of watching prices rise and hoping that the government would do something to help,  whilst being very unclear what help that might be or how long for before  it would be retracted?
 Absolutely not.

MovingForwards

I was a 'benefit baby' following my parents divorce. I never knew what life was like with them working due to being tiny when they split up, but clearly remember what life was growing up and it wasn't pleasant. Back then it was income support, family allowance and free school meals, now it's UC, child element and child benefit, free school meals, plus clothing grants, free food for being pregnant and having a baby, grants for babies, grants as they head through school and other bits. 

Hand me downs, jumble sales, not going on school trips, home cooked meals from scratch but the same thing each week as there wasn't the choice and value brands like there is now; thank goodness for milk and biscuit in primary school, enjoyed the meat pie in secondary school. I still despise and refuse to eat / drink certain things after all these years.

I'll take the life I have now of picking where I work, where I live, what I do for a living, how many hours I work and having money in the bank over the 'free' stuff.

However, I do think a proper overhaul is needed to make work, rather than benefits, be a lifestyle where possible (I'm not including disabled and those genuinely unable to work in this). 

Ksw3

I try and remind myself, would I actually be happy on benefits and not-working?

The answer is no, I don't think so. I grew up quite poor and the struggles instilled in me a very strong sense of personal responsibility (and absolute fear at being cold and hungry again). Relying on others for security I find very difficult. I need to know that I could improve my situation and being out of the job market would likely be very hard for me in that respect. 

My sense of self worth, my need for social connection and a life away from the home is also a benefit to me. I need something to give me drive.  

OP, you sound like you work very hard. Besides money, I'm sure you have gained a lot. It's just that in a world that is driven by money it's often seen as the only measure of success. Teaching children life skills, setting examples and choosing your own way in life is success and valuable too. 

Flat_Earther

RainbowLaura said:

Just a general vent really, not sure where this belongs.

I always wanted to be a stay-at-home mum, but both my husband and I have always been low earners. We had two choices - just go for it and start claiming benefits, or save like crazy so we could manage by ourselves.

So save we did, for several years, before starting a family. This way, his income could just about cover the bills but we wouldn't have to worry if he lost his job or we found ourselves in financial difficulty. This has worked out really well for the last couple of years, and we were looking forward to using our savings to buy a bigger house once the children are at school and I'm back in work.

With the 2 year energy price guarantee, we'd have been fine. But thanks to the reversal, it's becoming clear that our savings are about to be wiped out on energy bills. 

I can't help but compare myself to my friend, who is also a stay-at-home mum. She and her husband bought the bigger house before having their children, but leaving themselves with hardly anything in the bank. Then, when she gave up work, went on universal credit. Now, they will get plenty of help with her energy bills yet we probably won't. 

I feel so resentful, not towards my friend, but towards a system which does nothing to reward financial responsibility. We will probably never have the bigger house now, all because we were sensible. We'd be entitled to around £400 a month in benefits if we'd just blown our savings instead of trying to do the right thing. I kind of wish we had.

No point to this post really. I just needed somewhere to vent, as it's eating me up a bit at the moment.

And what's going to happen when her mortgage deal ends and she's gone from a 1.5% mortgage to 6% when she was already at breaking point?

She may be able to get a loan (Support for Mortgage Interest) to cover the mortgage interest (and only up to £100,000), but it'll be secured against the property and very quickly she'll own nothing.

Don't be envious of the benefit queens, rarely do they do as well as they like to portray, or the media like to portray them.

Shirker_Bee

There are those who feed the cow and there are those that milk the cow. 

Those that feed the cow will see big tax increases soon to give those that don't a large benefit increase.