Budget predictions / discussion

mebu60

Isn't the State Pension effectively means tested to some degree already in that it's taxable income? 

wmb194

I'm interested to see whether a 'British Isa' is introduced. In article somewhere I forget someone speculated that it could be implemented as an additional allowance of, say, £2,000, on top of the usual £20,000 that would only allow securities listed in London to be placed in it (as apparently per the original PEP). The downside is that it adds yet more complexity to Isas.

ColdIron

I'd be interested to see how British some of these companies might be, Coca Cola (CCH) is listed on the FTSE 100

Could it be as simple as just an LSE listing I wonder?

boingy

wmb194 said:

I'm interested to see whether a 'British Isa' is introduced. In article somewhere I forget someone speculated that it could be implemented as an additional allowance of, say, £2,000, on top of the usual £20,000 that would only allow securities listed in London to be placed in it (as apparently per the original PEP). The downside is that it adds yet more complexity to Isas.

I think the idea was floated but then they realised how difficult it would be to administer and, no, the ISA system does not need any more complexity. We already have too many types of ISAs and rule variations. It will be nice to see them lift the restrictions on "one of each type" though. That always seemed a bit unnecessary to me. Maybe it's time for all ISAs to be registered centrally so that providers can see exactly how much each punter has contributed each year so they could prevent people oversubscribing or otherwise messing up. One year I put 10k in cash and 10K in S&S and one of those providers actively encouraged me to use up my "extra 10K allowance" before the tax year was up. Not good.

pecunianonolet

The fundamental problem is that you can't miraculously create more money (you can issue more gilts, which is essentially borrowing, etc). 

The overall problems are so severe in any area that it more or less is just an exercise of taking something out of the left pocket to put it back into the right pocket. 

Looking at claims on taxes being at a 70 year high. In relative terms probably correct, if you compare to OECD, nothing outstanding and we're somewhere in the middle. 

Take fuel duty, why not lift the freeze and increase fuel duty and in exchange scrap road tax. If you drive more, you contribute more. At the same time you incentivise consumers to make the switch to electric cars by giving out interest free government backed loans e.g. 10k to purchase an EV manufactured primarily in Europe (keep the likes of BOYD out).

Income tax: Allow everyone to earn 20k tax free, regardless if they earn only 25k or 500k (people consume and pay tax that way) and make the system more progressive.

As I am north of the border, income tax set in Westminster doesn't affect me much but NI cuts do. As much as I like the little extra cash coming in now from the autumn budget, I probably spend it long term on car parts and repairs playing pothole bingo reverse engineered. National insurance in all honestly should go up not down. State pension today is a joke and nobody can seriously survive of it. 

Instead of 99% mortgages, as we have read might be coming, it should instead be changed that 80% LTV is the max. Minimum terms should be 10 years. It would calm the markets, the short term profiteering and inflated prices would sop helping a lot more people buying property they can actually afford.

Other measures, I am in agreement of increasing air passenger duty on business class flights, same as taxes on vaping. 

At the end of the day, it could be a very simple budget and any extra funding raised plus any headroom aka spare cash is just transferred back to the BOE to bring debt down. 

Any slight doubt by markets of unfunded tax bribes will just boost swap rates. 

Above all political colours, manifestos, bribes we only need a very few elements: trust, stability and much less ideology from left and right

friolento

Bobblehat said:

friolento said:

george4064 said:

These NI cuts (recently and chatter of another) does worry me, that the state pension is going to be cut.

Isn't it NI contributions that fund the state pension? I get a feeling that NI is getting cut because it might not be needed going forward, if state pension gets scrapped altogether.

IMO, there is no near or medium term risk that state pension will be cut. The Triple Lock is already funded for the next few years because there is currently a substantial surplus in the NI Fund ( (£72.4 billion audited as of 31/03/2023, and anecdotally sitting at over £80 billion YTD), and the basic costs will be funded by ongoing NI contributions, provided the economy is ticking over on at least the mediocre basis it has been ticking over for the last few years.

The Triple Lock must be reviewed, and replaced with a more sustainable solution, in the next 5-8 years, and in the long run, the State Pension might well become means tested. All this is a long time away, and not on the current radar of any political party.

 

Please educate me ... if the NI Fund is in a substantial surplus and basic costs will be funded by ongoing NI contributions .... etc, then why would there be a need to review the Triple Lock? Isn't it working as designed?

Edit: (genuine question from me, not sarcasm!)

As the Fund balance gets depleted, and as our pensioner numbers grow, the TL won't be sustainable with the present funding model

poshrule_uk

What is it really need is electoral reform. The current voting system only benefits the big two and ideally we need PR.

friolento

Albermarle said:

Bobblehat said:

friolento said:

george4064 said:

These NI cuts (recently and chatter of another) does worry me, that the state pension is going to be cut.

Isn't it NI contributions that fund the state pension? I get a feeling that NI is getting cut because it might not be needed going forward, if state pension gets scrapped altogether.

IMO, there is no near or medium term risk that state pension will be cut. The Triple Lock is already funded for the next few years because there is currently a substantial surplus in the NI Fund ( (£72.4 billion audited as of 31/03/2023, and anecdotally sitting at over £80 billion YTD), and the basic costs will be funded by ongoing NI contributions, provided the economy is ticking over on at least the mediocre basis it has been ticking over for the last few years.

The Triple Lock must be reviewed, and replaced with a more sustainable solution, in the next 5-8 years, and in the long run, the State Pension might well become means tested. All this is a long time away, and not on the current radar of any political party.

 

Please educate me ... if the NI Fund is in a substantial surplus and basic costs will be funded by ongoing NI contributions .... etc, then why would there be a need to review the Triple Lock? Isn't it working as designed?

Edit: (genuine question from me, not sarcasm!)

The NI fund is more of an accounting exercise. At the end of day all NI and tax goes to the Govt., and they divi out the money to the various places. So the more pensions cost, the less there is for other items, regardless of what is or isn't in the NI fund.
Some years it is in deficit and the Govt just covers the shortfall from other sources/taxes. Here is an explanation from google.

In practice, the money from National Insurance Contributions isn’t really separate from general government funding

Even though there’s a specific pot of money for NI funds to flow into and out of, it’s not helpful—as the Institute for Fiscal Studies has argued in the past— to think of this as a ring-fenced sum that’s separate from the rest of the government’s money.

That’s because when the fund runs low (after, say, years of deficits in a row), the Treasury steps in and injects new money into the fund. And as mentioned above, the surpluses in the fund are also invested in the national debt.

That means, in practice, some money flows into the fund that doesn’t come from NI contributions, and some money flows out that doesn’t go to pensions or contributory benefits

I agree that Governments are free to change the approach to managing taxpayer funds but for the time being. the NI Fund is ringfenced for state pensions and a couple of minor other benefits.

The last time a Treasury Grant was necessary was in 2015-16, as the NI Fund balance had sunk to below the statutory minimum balance.

A change to the approach to the management of the NI Fund requires changes to primary legislation as there are a number of existing laws (Social Security Act 1993, Social Security Administration Act 1992, Health and Social Care Levy Act 2021 and possibly others) which govern the managment of the NI Fund. I don't have a crystal ball but would hazard a guess that no Party Manifesto for the next GE will propose a change to those laws.

friolento

wmb194 said:

I'm interested to see whether a 'British Isa' is introduced. In article somewhere I forget someone speculated that it could be implemented as an additional allowance of, say, £2,000, on top of the usual £20,000 that would only allow securities listed in London to be placed in it (as apparently per the original PEP). The downside is that it adds yet more complexity to Isas.

If it is happening, I for one won't make any use of it. My investments are globally diversified and I can't see a reason why I would want to change this. What's a "British" company, anyway? Most if not all the large companies operate globally, and no big investors would invest in British companies only although some British companies are majority-owned by foreign investors Just look at our Water companies......

pecunianonolet

MissHap said:

As one of the 12 million grey voters, any tinkering with the triple lock will lose the Tories votes so I'm betting he'll leave well alone and if LIEBORE get in its there problem.
The next tax year I WILL pay income tax on my state pension and this alone sticks in my throat!
I'm not averse to being taxed but dont give it me with one hand and then take it back with the next!
I've never voted Tory and not voted LIEBORE for over 25 years and don't intend to.
Normally I vote for an Independent candidate in both local and national elections, my belief is change can only come if you DONT vote for the 2 party shambles, unfortunately I'm in the minority nationally but locally we've had an independent candidate in our ward for a number of years, unfortunately in a 49 seat local council, 45 of them are LIEBORE!
My vote at the next GE.........................REFORM......................even if they don't gain a seat, its a message we need to send to the big 2 that we aint happy!

So you are not happy with the two big parties and the damage which was done by one of them in the last decade in particular and therefore you want to vote for a party that is even more dangerous and destructive?

That's a clear message to be send out only encouraging more businesses to delist from LSE an list at NYSE. More companies to invest and build factories and create jobs in more stable and predictable countries. Also a clear sign to highly skilled people of colour, different religion, with different languages, traditions, gender identities, etc. that they are not welcome so they move to more liberal and progressive countries. Others already here may decide to leave (and from own experience I can tell you many already have or planning to do so this year).

I can't and won't stop you but I hope I can encourage you to think twice where you put the X, however bad the current offer is. 

poshrule_uk said:

What is it really need is electoral reform. The current voting system only benefits the big two and ideally we need PR.

Can't agree more!