Will MSE lobby the government to raise either PSA or ISA allowance?

eskbanker

pecunianonolet said:
@eskbanker: In other countries e.g. Germany a 50k salary isn't seen as something extraordinary, still a good salary but in the UK you have income tax and national insurance deducted. In Germany you have deducted income tax, unemployment insurance, health insurance, pension insurance, caring insurance (those without kids pay a premium), and church tax if you are in the church but you can opt out for a fee. In turn state pensions are higher for most, you get a dentist appointment within a week, you can see a GP as you wish and no phone triage. Situation in caring sector and hospitals is not great due to staff shortages, etc. What I am trying to say is that a higher median leaves more in peoples pockets but ensures public services are better (not perfectly) funded. Also, more people contribute a little compared to a small group having to fund the majority. I would think that they are still competitive as a country...

A £50K salary isn't seen as something extraordinary here either, but it's above the average, as it is in Germany too.  You obviously know far more about life in Germany than I do but I'm still unconvinced that it's particularly desirable (or even practical) to try to project their economic policies onto our culture, politics, etc, and, even if a valid distinction, don't really see that "more people contribute a little compared to a small group having to fund the majority" as being something to aspire to.

Exodi

"Will MSE lobby the government to raise either PSA or ISA allowance?"

Could you imagine? I expect that would look tone deaf at best or totally ruin Martin Lewis's credibility at worse.

Could you imagine trying to propose measures that specifically benefit people who are able to save up more than £20,000 a year? That's more than the entire annual salary of a full time worker on minimum wage . Did you not see the absolute kicking the government took for trying to scrap the additional rate tax bracket?

I wouldn't hold your breath! £20k is more than generous, in my opinion.

Albermarle

Germany a 50k salary isn't seen as something extraordinary, still a good salary
I would think that they are still competitive as a country...

You can also see that from another angle. Germany has been a very successful economy for decades ( maybe stuttering a bit now) based a lot on technology, engineering and manufacturing skills. PLus a long term investment outlook.
These type of jobs tend to pay well ( better than service based jobs), and as the German economy and companies are successful, they can afford to pay them. 

dunstonh

In other countries e.g. Germany a 50k salary isn't seen as something extraordinary, still a good salary but in the UK you have income tax and national insurance deducted. In Germany you have deducted income tax, unemployment insurance, health insurance, pension insurance, caring insurance (those without kids pay a premium), and church tax if you are in the church but you can opt out for a fee. In turn state pensions are higher for most

The German pension system is largely funded by the state.  To get that generous pension (and it is) you pay 18.6% of your salary (rising to 20% by 2025).     Typically, half paid by the employer and half by the employee.

In the UK, we have a smaller state pension but it costs less.  However, auto-enrolment exists as the private sector fills the gap instead of the state.   The UK has always had a greater focus on private sector provision and personal responsibility

pecunianonolet

Exodi said:

"Will MSE lobby the government to raise either PSA or ISA allowance?"

Could you imagine? I expect that would look tone deaf at best or totally ruin Martin Lewis's credibility at worse.

Could you imagine trying to propose measures that specifically benefit people who are able to save up more than £20,000 a year? That's more than the entire annual salary of a full time worker on minimum wage . Did you not see the absolute kicking the government took for trying to scrap the additional rate tax bracket?

I wouldn't hold your breath! £20k is more than generous, in my opinion.

Took me 13 months to save up 20k during lockdown and Covid period... and at that time I was a 20% tax payer getting literally no interest so not at danger of tax and no need for an ISA so left in easy access. We had low inflation and luckily no deflation as other countries. As I wrote above, this was planned to be used as a deposit after lockdown and some sort of normality. Gov incentivised the property market by 5% mortgages and stamp duty reduction, in turn prices rose and the bubble got more inflated and I was not willing and able to pay 20-30% above home report for average or below average quality housing (if a mortgage would be based on purchase price and not home report value it would have been a very different story). My cash is still here, I changed job and will be a higher rate tax payer by Feb/March. My 20k in this example are getting less every day by inflation and interest rates rise slowly. Now the gov wants me to pay tax on my nominal gains, while I still accrue real term losses. 

Property market has started to cool down, but mortgage rates rise very quickly so I can buy to a still highly inflated price and pay now a very high mortgage or try to wait for prices to come down, get screwed by inflation while I wait and hope a low LTV will balance it out? Would call that a double screw up in any way!

(Irony on) Maybe I should take out every possible credit card, give up my job, blow my cash travelling the world and max out all those cc and at the end declare bankruptcy, get a council house, pay no council tax and live on benefits, work illegally here and there for cash in pocket. (Irony off)

Grumpy_chap

pecunianonolet said:

Would you say 50k is an above average salary, 

Yes.

pecunianonolet said:

Good shout but I am not planning to retire in UK so I am trying to put in as less as possible in any pension pot 

Not investing for a pension because you plan to retire overseas seems an odd logic.  You do realise that the investment fund or income from a pension can move overseas with you.

pecunianonolet said:

My pension is concrete gold through future inheritance in another country and that's where I also plan to retire as oversees is warmer and sunnier 

Planning your entire retirement funding on the expectation of a future inheritance is a bit of a high-risk strategy.
You may wish to retire before your donor has moved on to their next stage.
Your donor may spend all the money.
Your donor may decide they don't like you and leave whatever is left to the local dog's home or whatever.

pecunianonolet

@eskbanker I have family living there so I know a bit more of how it works there. They have many other struggles we thankfully don't have. 
I agree with you that things can't be transferred as easy between one and another country but I still think it is desirable that the overall tax burden of a society is divided fairly over as many shoulders as possible.

Source: https://www.destatis.de/DE/Themen/Arbeit/Verdienste/Verdienste-Verdienstunterschiede/verdienste-branchen.html
Destatis is the German equivalent to ONS, translated via Google translate.

A full-time employee earned an average of 4,100 euros gross per month in 2021. Special payments, for example in the form of vacation, Christmas bonuses or other bonuses, are not yet taken into account here. The amount of earnings does not only depend on the individual characteristics of the employee, such as education, type of work and age. The industry in which the employee works is also important.

The sectors with the highest earnings in 2021 at a rough breakdown level were the areas "energy supply", "information and communication" and "provision of financial and insurance services". Here, the employees earned between 5,207 and 5,693 euros gross per month on average. The lowest gross monthly earnings were paid in the "hospitality" sector with 2,138 euros.

If you look one level down within the sectors, the range of earnings is even more pronounced. The industry "extraction of oil and natural gas" (6,617 euros) leads the ranking here, ahead of "coking plant and petroleum processing" (6,410 euros) and "broadcasters" (6,018 euros). At the lower end of the ranking are the areas of "accommodation" (2,116 euros), "gastronomy" (2,156 euros) and "placement and leasing of workers" (2,494 euros).

All earnings data published on this site and in the publications are arithmetic mean values. An idea of ​​the distribution of employees around this mean is important for the interpretation of these values: it is known from the 2018 structure of earnings survey that almost 2 out of 3 full-time employees (63%) earn less than the overall economic average; only a good third (37%) have higher gross earnings. This third has such high earnings that the average value for all employees is drawn "up". 

pecunianonolet

pecunianonolet said:

Good shout but I am not planning to retire in UK so I am trying to put in as less as possible in any pension pot 

Not investing for a pension because you plan to retire overseas seems an odd logic.  You do realise that the investment fund or income from a pension can move overseas with you.

pecunianonolet said:

My pension is concrete gold through future inheritance in another country and that's where I also plan to retire as oversees is warmer and sunnier 

Planning your entire retirement funding on the expectation of a future inheritance is a bit of a high-risk strategy.
You may wish to retire before your donor has moved on to their next stage.
Your donor may spend all the money.
Your donor may decide they don't like you and leave whatever is left to the local dog's home or whatever.

My mum was focussing on pension all her life to have a stress free retirement with travel, etc. Got cancer at the age of 52, chemo and treatment, 3-4 years of good life on meds, cancer broke out again, passed away with 60 last year. She made sacrifices all her live and was not able to spend a single penny. 

The donors are 90 years of age (mums parents) and I wish them to reach at least 100, the donor has everything written down in the will and all been done and sealed by a notary. I was there when it was drawn up.

jimjames

pecunianonolet said:

Exodi said:

"Will MSE lobby the government to raise either PSA or ISA allowance?"

Could you imagine? I expect that would look tone deaf at best or totally ruin Martin Lewis's credibility at worse.

Could you imagine trying to propose measures that specifically benefit people who are able to save up more than £20,000 a year? That's more than the entire annual salary of a full time worker on minimum wage . Did you not see the absolute kicking the government took for trying to scrap the additional rate tax bracket?

I wouldn't hold your breath! £20k is more than generous, in my opinion.

Took me 13 months to save up 20k during lockdown and Covid period... and at that time I was a 20% tax payer getting literally no interest so not at danger of tax and no need for an ISA so left in easy access. 

In which case £20k per year allowance in addition to pension and PSA should be plenty for the vast majority of people. It's really not something that MSE should be campaigning on. They might as well campaign to scrap the 45p tax rate.

pecunianonolet

In which case £20k per year allowance in addition to pension and PSA should be plenty for the vast majority of people. It's really not something that MSE should be campaigning on. They might as well campaign to scrap the 45p tax rate.

I guess I give up as people just don't understand simple economics as it seems. Even Martin Lewis said today that the middle class/earner carries the most burden. Scrapping the 45p tax rate was a stupid move by Kwasi Kwarteng and he should have instead left the 150k level and should have increased it to 48p, get rid of non dom and ensure companies like Starbucks and many others pay tax at source and not transfer all profits, like Starbucks, covered as licence fees to Dublin to pay very low cooperation tax there. https://www.theguardian.com/business/2022/mar/30/starbucks-uk-corporation-tax-profit-administrative-expenses-royalties