Autumn statement reactions with reference to pension & retirement planning, views & comments?

Steve_666_

Fiscal drag is the stealth tax, and disproportional effects the lower paid. In addition, my state pension is now above the lower threshold, doesn't effect me as I have to fill in the tax return anyway, as I'm still working. However its going to heap a lot more work on  HMRC which we all know is already stretched beyond hope. The NI reduction again rewards the higher paid, 2% of 40K is 800, 2% of 10K is 200. At least they honoured the triple lock and wealth fare increases.

zagfles

Steve_666_ said:

Fiscal drag is the stealth tax, and disproportional effects the lower paid. In addition, my state pension is now above the lower threshold, doesn't effect me as I have to fill in the tax return anyway, as I'm still working. However its going to heap a lot more work on  HMRC which we all know is already stretched beyond hope. The NI reduction again rewards the higher paid, 2% of 40K is 800, 2% of 10K is 200. At least they honoured the triple lock and wealth fare increases.

If you're using absolute terms to argue that the NI reduction benefits the higher paid more (ie the higher paid save more £ rather than %), then you can't argue that fiscal drag affects the lower paid more. The £ effect of fiscal drag is identical to someone on £20k and someone on £50k. By all means use £ or %, but don't use one to make one point and the other to make another.

whattochoose

I believe the next budget is in March?
What's the betting that Jeremy Hunt will find a way to fund a generous increase in allowances, however he chooses to do it?
Won't make any difference to how I'll be voting in the next election though.

michaels

whattochoose said:

I believe the next budget is in March?
What's the betting that Jeremy Hunt will find a way to fund a generous increase in allowances, however he chooses to do it?
Won't make any difference to how I'll be voting in the next election though.

Careful, part of your post sounded off topic....

zagfles

whattochoose said:

I believe the next budget is in March?
What's the betting that Jeremy Hunt will find a way to fund a generous increase in allowances, however he chooses to do it?
Won't make any difference to how I'll be voting in the next election though.

Unlikely. March would be too late to adjust NI thresholds (and tax and NI thresholds are now linked) and yet another in-year adjustment to rates would be far too messy. If he was going to do it he'd have done it now. They can still argue that the personal allowance is higher in real terms than 2010 even with the recent fiscal drag. Plus people don't really understand fiscal drag so it's the ideal stealth tax.

Hoenir

whattochoose said:

I believe the next budget is in March?
What's the betting that Jeremy Hunt will find a way to fund a generous increase in allowances, however he chooses to do it?
Won't make any difference to how I'll be voting in the next election though.

Unlikely. Unless we all suddenly become more productive and wealth creating. The pie to share out isn't going to grow significantly.  Progressive tweaking  is the best we can hope for. As Truss found out last year. The markets fund the deficit the country is running. They have the final say as to what's acceptable or not. 

Steve_666_

zagfles said:

If you're using absolute terms to argue that the NI reduction benefits the higher paid more (ie the higher paid save more £ rather than %), then you can't argue that fiscal drag affects the lower paid more.

I meant it in the sense that its effects are more dramatic. I'm in the 2nd group and inflation really only effects a proportion of  my income, that spent on energy, food, entertainment... For the lower paid that is generally all of their income, so not increasing the lower tax band in line with inflation is  a year on year real terms pay decrease.

thriftytracey

Apropos of Nothing - what happened to the Truss Alternative Budget?  Was she silenced?

penners324

Should have indicated that they were scrapping employees Ni completely
 A simplification of the income tax system is massively needed