Jeremy Hunt in plea to early retirees: ‘Britain needs you’

Silvertabby

Sea_Shell said:

For the record, I have no intention of "fudging" any self employment.

I can't be bothered with the paperwork 😉

Ditto.

Before I bought 4 years of NI contributions at Class 3 rates, the advice on here was to:

1.  Claim free NI conts for looking after grandchildren.

2.  Sell a few bits of tat on e-bay and pay the much cheaper self employed Class 2 rates.

1.  No children thus no grandchildren.

2.  Really couldn't be *rsed.

Sea_Shell

Silvertabby said:

Sea_Shell said:

For the record, I have no intention of "fudging" any self employment.

I can't be bothered with the paperwork 😉

Ditto.

Before I bought 4 years of NI contributions at Class 3 rates, the advice on here was to:

1.  Claim free NI conts for looking after grandchildren.

2.  Sell a few bits of tat on e-bay and pay the much cheaper self employed Class 2 rates.

1.  No children thus no grandchildren.

2.  Really couldn't be *rsed.

I think someone also gave me that gem of "advice" when I was planning to make vol. cont.

My response was the same!! 😉

jimi_man

Sea_Shell said:

For the record, I have no intention of "fudging" any self employment.

I can't be bothered with the paperwork 😉

Agreed. And 99% of people would also have the same mindset. The difficulty is that the exemption exists and there is nothing to stop people doing it. I have no problem with people doing it if it's legal - most people on here indulge in tax avoidance in one form or another. I suppose it's where do you draw the line.

zagfles

Anonymous101 said:

Last few comments are around the issues I mentioned in my last post.

It doesn't pay to work (wages - child care costs) unless you're earning more than an average salary, say £30k pro rata.
Childcare varies from setting to setting but a rough guide for 5 days per week care is £1000 a month per child. Its around £50-£60 per day before any government help.

The significance of 16 hrs is that you need to work a minimum of 16 hours to qualify for a level of childcare support (30 hrs per week term time). You don't receive any additional benefit if you work more than this but you would incur additional childcare costs.

It's also the threshold for working tax credit for single parents. The PP said the kids "weren't youngsters" so working >16 hours should be easily possible with kids in school without any childcare costs. Kids are at school about 30 hours a week.

zagfles

CoastingHatbox said:

Fortnite_hero said:

Hi

People on PT work and getting benefits should be pulled up more often for interviews and assessed why they cant work more hours.

One of the places I worked at years ago - not sure how it workd but she said something about " cant work more than 16 hours" -  - the reason she mentoned that was that a full time role for our admin had come up annd I was confused until someone enlightedn me.

Not sure how rules have changed since - btw, she had 2 kids aged around 10.

Agree with the above.

Brother in law is single with no dependants, he claims UC and has just had to work an extra 2 hours to a grand total of 14 per week.

Why are we paying UC to people who should be working full time. The criteria for UC should be X amount of hours per week not so many £ per week 

This would stop the "I can't work more than 16 hours as it effects my benefits nonsense.

The problem here is that wages have not kept pace with growth in GDP.
The problem isn't the welfare state itself. It is employers offering such poor wages people are worse off after working more hours.

A significant proportion of UC (and before that Tax Credits) is supporting employers that do not pay properly.

As I said above, full time minimum wage would be too much for benefits for most people without kids. Do you think employers should pay people with kids more? Or part timers more per hour than full timers?

Also as I said earlier, for a lot of people tax credits/UC just refund some of the tax they pay, as the UK tax system overtaxes families.

In any case it's not true employers pay low wages in the UK. UK minimum wage is higher than the average wage in a lot of Europe, that's why we were so attractive to EU workers especially eastern Europeans before Brexit. UK wages are 10th highest in Europe, out of 46 countries.

https://en.wikipedia.org/wiki/List_of_European_countries_by_average_wage

bostonerimus

OldScientist said:

EdSwippet said:

OldScientist said:

Quite... so, I had a salary that, in the latter part of my career was in the top 10% in the UK and, accounted for properly, I won't have paid for my state pension.

Even if you include employer NICs? Those shift the needle a lot, since they never top out.

They are after all a portion of your overall 'compensation' package. That is, if your employer did not have to hand this part of what they make from your efforts over directly to the government, they could instead have paid you a higher salary.

As far as I am aware, the values in the NI record only include the personal ones so I've not included the employer ones.

A full lifetime calculation on the paying in side would include NI, tax, etc. while the outgoings would include pension, use of NHS, roads, schools, etc. In other words, it deserves a far better treatment than a casual post to a forum (if it deserves a treatment at all)!  I am minded of what is written on the US IRS building, "Taxes are what we pay for a civilized society" - simple accounting of money in an out ignores the benefits everyone gets.

I note that the ONS report (https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/financialyearending2021 ) suggesting that just over half gain more in benefits than are taxed (in 2021, the figures were skewed by covid, previously it was just under half) is an instantaneous measure and not a lifetime one.

Various OECD reports have identified the UK SP as one of the worst values for money in the developed world. The benefit just isn't very much for the level of contributions and replaces a small portion of earned income. Of course it's complicated as NI pays for more than SP and cross border comparisons are difficult.

However, for those paying Class 2 NI the UK flat rate SP is a fantastic deal; 35 years of voluntary NI has cost me around £6k and for that I'll get get full SP at age 67. The US equivalent of SP is Social Security and that will pay me 3x the UK SP. It is funded by a 15.3% payroll tax split equally between the employer and the employee, so 7.65% each, and has a lifetime earnings component like the old SERPs. The US SS benefit isn't great when compared with other countries, but it is better than the UK's. For high levels of state pension you should live in the Netherlands or Denmark.

Fortnite_hero

CoastingHatbox said:

Fortnite_hero said:

Hi

People on PT work and getting benefits should be pulled up more often for interviews and assessed why they cant work more hours.

One of the places I worked at years ago - not sure how it workd but she said something about " cant work more than 16 hours" -  - the reason she mentoned that was that a full time role for our admin had come up annd I was confused until someone enlightedn me.

Not sure how rules have changed since - btw, she had 2 kids aged around 10.

Agree with the above.

Brother in law is single with no dependants, he claims UC and has just had to work an extra 2 hours to a grand total of 14 per week.

Why are we paying UC to people who should be working full time. The criteria for UC should be X amount of hours per week not so many £ per week 

This would stop the "I can't work more than 16 hours as it effects my benefits nonsense.

The problem here is that wages have not kept pace with growth in GDP.
The problem isn't the welfare state itself. It is employers offering such poor wages people are worse off after working more hours.

A significant proportion of UC (and before that Tax Credits) is supporting employers that do not pay properly.

So the problem of people choosing to work 16 hours who could easily work full time is the fault of the employers..

You say it is not the fault of the benefits system, I would say it is entirely the fault of the welfare system that is allowing this to happen.

NedS

Fortnite_hero said:

CoastingHatbox said:

Fortnite_hero said:

Hi

People on PT work and getting benefits should be pulled up more often for interviews and assessed why they cant work more hours.

One of the places I worked at years ago - not sure how it workd but she said something about " cant work more than 16 hours" -  - the reason she mentoned that was that a full time role for our admin had come up annd I was confused until someone enlightedn me.

Not sure how rules have changed since - btw, she had 2 kids aged around 10.

Agree with the above.

Brother in law is single with no dependants, he claims UC and has just had to work an extra 2 hours to a grand total of 14 per week.

Why are we paying UC to people who should be working full time. The criteria for UC should be X amount of hours per week not so many £ per week 

This would stop the "I can't work more than 16 hours as it effects my benefits nonsense.

The problem here is that wages have not kept pace with growth in GDP.
The problem isn't the welfare state itself. It is employers offering such poor wages people are worse off after working more hours.

A significant proportion of UC (and before that Tax Credits) is supporting employers that do not pay properly.

So the problem of people choosing to work 16 hours who could easily work full time is the fault of the employers..

You say it is not the fault of the benefits system, I would say it is entirely the fault of the welfare system that is allowing this to happen.

It should be noted that the 16h limit is something largely imposed by legacy benefits which are slowly being phased out and replaced by Universal Credit which does not have any such limits. Indeed, UC deliberately implements a system whereby working more will always result in a claimant being better off overall due to the tapered way benefits are withdrawn as earnings increase. Still, trying to explain that to claimants where views around 16h are deeply entrenched is sometimes difficult and it takes time to change behaviours. Childcare costs are also generously supported on UC, refunded at 85% of the cost.

zagfles

Fortnite_hero said:

CoastingHatbox said:

Fortnite_hero said:

Hi

People on PT work and getting benefits should be pulled up more often for interviews and assessed why they cant work more hours.

One of the places I worked at years ago - not sure how it workd but she said something about " cant work more than 16 hours" -  - the reason she mentoned that was that a full time role for our admin had come up annd I was confused until someone enlightedn me.

Not sure how rules have changed since - btw, she had 2 kids aged around 10.

Agree with the above.

Brother in law is single with no dependants, he claims UC and has just had to work an extra 2 hours to a grand total of 14 per week.

Why are we paying UC to people who should be working full time. The criteria for UC should be X amount of hours per week not so many £ per week 

This would stop the "I can't work more than 16 hours as it effects my benefits nonsense.

The problem here is that wages have not kept pace with growth in GDP.
The problem isn't the welfare state itself. It is employers offering such poor wages people are worse off after working more hours.

A significant proportion of UC (and before that Tax Credits) is supporting employers that do not pay properly.

So the problem of people choosing to work 16 hours who could easily work full time is the fault of the employers..

You say it is not the fault of the benefits system, I would say it is entirely the fault of the welfare system that is allowing this to happen.

Yes it's enirely the fault of the tax/benefit system, the old tax credits system used to create a sweet spot at 16 hours, but earnings over that were effectively taxed at 73% with the tax credits taper plus income tax & NI, or even around 90% if housing benefit was being claimed. Universal credit has lowered the taper rate a lot, but it's still over 50% effective tax.

That's the problem with targetting benefits at those who "need" it. Those with the greatest need have the least incentive to work (or work more), the classic "poverty trap".

zagfles

bostonerimus said:

OldScientist said:

EdSwippet said:

OldScientist said:

Quite... so, I had a salary that, in the latter part of my career was in the top 10% in the UK and, accounted for properly, I won't have paid for my state pension.

Even if you include employer NICs? Those shift the needle a lot, since they never top out.

They are after all a portion of your overall 'compensation' package. That is, if your employer did not have to hand this part of what they make from your efforts over directly to the government, they could instead have paid you a higher salary.

As far as I am aware, the values in the NI record only include the personal ones so I've not included the employer ones.

A full lifetime calculation on the paying in side would include NI, tax, etc. while the outgoings would include pension, use of NHS, roads, schools, etc. In other words, it deserves a far better treatment than a casual post to a forum (if it deserves a treatment at all)!  I am minded of what is written on the US IRS building, "Taxes are what we pay for a civilized society" - simple accounting of money in an out ignores the benefits everyone gets.

I note that the ONS report (https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/theeffectsoftaxesandbenefitsonhouseholdincome/financialyearending2021 ) suggesting that just over half gain more in benefits than are taxed (in 2021, the figures were skewed by covid, previously it was just under half) is an instantaneous measure and not a lifetime one.

Various OECD reports have identified the UK SP as one of the worst values for money in the developed world. The benefit just isn't very much for the level of contributions. Of course it's complicated as NI pays for more than SP and cross border comparisons are difficult.

However, for those paying Class 2 NI the UK flat rate SP is a fantastic deal; 35 years of voluntary NI has cost me around £6k and for that I'll get get full SP at age 67. The US equivalent of SP is Social Security and that will pay me 3x the UK SP. It is funded by a 15.3% payroll tax split equally between the employer and the employee, so 7.65% each, and has a lifetime earnings component.

The "value for money" of the state pension varies massively with income, for those on low incomes it's fantastic value for money, for those on higher incomes it's not.

For instance under today's rules, someone could earn £12,000 a year for 35 years and pay zero NI, and get a full state pension of about £10k a year! You can't get much better value than that!

Whereas someone earning £50k a year for 45 years would pay almost £500,000 in NI (inc employer conts), and get exactly the same state pension, £10k a year.  Not great value for money.

The old rules were even worse, I remember a time when I was paying 20 times as much NI as my wife, but she was accruing more state pension than me!!