Rikk – sorry it does add up – its just your expectations are unrealistic as are your comparisons.

BiL’s expectations were to be able to feed his family, and at just over the 40% threshold he struggled – so much so, that he took his expertise out of the UK. He was earning a good salary, but it wasn’t sufficient in terms of family housing availability and cost.

I don’t think his expectations were unrealistic. His lifestyle was pretty modest, ran 2 old cars, no foreign holidays. IIRC his budget for going out / mtb / other hobbies etc was £50pm!!!

Any discussion of wealth HAS to consider both income and outgoings.

ETa – Just to put some estimated numbers to this…

42k – approx 2576 pm take home
26k (median) approx 1670 pm take home

So about 900 pm difference – which could very easily be swallowed up in fixed costs

OTH, if that 26k is at the benefit cap level, and not taxed, surely that is close to 35k pa of earned, taxable income…..

So how do you think people in the south east living on average or below average earnings manage?

sorry – to claim not to be able to live on his £42 000+ and her few thousand on top is ridiculous

Rikk – sorry it does add up – its just your expectations are unrealistic as are your comparisons.

How on earth do you thing public servants and manual workers survive? You know – people earning half what you think is not well off?

Yep, it sucked.

And I thought when I earnt more I’d be better off. Bills just get bigger.

The most significant differentiator in my experience is when someone got on the property ladder. I know people who earn a third of what I do and have far more disposable income.

So how do you think people in the south east living on average or below average earnings manage?

I dont doubt some / many will be struggling. I’m just trying to illustrate that being a 40% tax payer does not equate to “wealth”. You need to look at income and expenditure.

From my experience many people on lower salaries do have a higher level of disposable income, despite lower earnings. I guess their fixed committments are less

Meanwhile, back to child benefit, one thing is sure…

The Govt have painted themselves into a pretty messy corner

So how do you think people in the south east living on average or below average earnings manage?

Median Gross Weekly Wage in the UK is ~£500

But it is lower than that in every region in the UK, except South East and that London. In that London the median is £651 !

Yeah I think your definition of “well off” may be different than some TJ.

When you say:

How on earth do you thing public servants and manual workers survive? You know – people earning half what you think is not well off?

I personally wouldn’t consider “well off” to be earning twice what someone can just “survive” on, especially when they also have benefits and tax relief that you don’t get.

It might be “comfortable”, but it’s hardly the Millionaire’s Row you portray it as.

b r – Edinburgh is a cheap city? By what comparison?

well here oop north if you earn 42.5k before tax your a millionaire..those living here and travalling to that london each week are bill gates esque.. we have two on our modest rochdale street.. mrs dont work and boosts local economy by driving everywhere in 61 plate range rover/ audi estate and graciously attend school coffee mornings….. need an extra score a week to feed little billy.. i dont think so.

Presumably

mrs dont work + driving everywhere in 61 plate range rover/ audi estate

= much, much more than 43.5k……

Summary of what was on R4 link

Will somebody please square the iniquitous circle of 2 people earning £39 k and getting paid by the state for having one child yet a household with one earner on £40K and a partner looking after 3 children gets nothing.Do the arithmetic!No Range Rover Parked outside our flat!
Don’t hear many calls for capping NHS treatment for those earning over £40k.

Its important not to confuse individual salaries with household income. A net, combined household income of £40,000 puts you in the top 10%.

Where there has been bickering in the media about households where both earners earn just under the proposed cut-off for benefit – this hypothetical household would just scrape into the top 1% of richest households.

While a median salary of £26k gets banded about, 50% of households have a net income of £20k or less, a third of households have a combined income of less than £15k.

As I mentioned earlier, not all income is salaried, mine isn’t. Not all salaried work is full time, or permanent either

Going back to the original post – wasn’t child benefit paid separately so it could be given directly to the mother to pay for things like food rather than going into the fathers pocket (and straight to the pub with it?

Anyway, it’ll cost more to administer a revised policy than just give it to a couple of billionaires…

Anyway, it’ll cost more to administer a revised policy than just give it to a couple of billionaires…

But there are ways it doesnt have to cost more.. Simply withdraw it all together and increase the benefits cap.

interesting question rkk01, range rovers are circa 750pcm to lease so not an issue if your gross is plus 42.5 pa.. as i’d assume take home would be min. 2.5k a month.
even a cracking 4 bed detached on our rochdale street is 330k max so all will have low or none existant mortgage, as 80% of neighbours have been here since built 10yrs ago when they were half that price..

Not again TJ. We did this last time. This is what you should be focusing on:

maccruiskeen – Member
Its important not to confuse individual salaries with household income. A net, combined household income of £40,000 puts you in the top 10%.

Where there has been bickering in the media about households where both earners earn just under the proposed cut-off for benefit – this hypothetical household would just scrape into the top 1% of richest households.

While a median salary of £26k gets banded about, 50% of households have a net income of £20k or less, a third of households have a combined income of less than £15k.

As I mentioned earlier, not all income is salaried, mine isn’t. Not all salaried work is full time, or permanent either

And take into account the cost of living in different place. A UK average is pretty meaningless.

macruiseeen – also a gross earnings of £42 000 puts you in the top ten % of earners. Check the WIKI link

Not matter how you try to distort it if you are earning enough money to get into the 40% tax band you are a part of the wealthiest minority in the UK

What if you’re not on benefits?

Surely the govt. could easily make up the revenue by taxing the top 1% a fraction of a % more.
Or by taxing a bit more those true running dogs of capitailsm -second property owners and those with income from property.Or maybe stop EU migrants claiming benefit? There are a lot more groups in society that could be taxed more with little or no effect to their standard of living so why take money off our children?
If the economy was doing well we would all be talking about spending more public money and/or tax cuts.

TandemJeremy – Member
macruiseeen – also a gross earnings of £42 000 puts you in the top ten % of earners. Check the WIKI link

Not matter how you try to distort it if you are earning enough money to get into the 40% tax band you are a part of the wealthiest minority in the UK

That doesn’t mean things are comfortable for everyone in that band, nor that losing child benefit would have an impact.

All of that aside, before the election the tories said they wouldn’t scrap child benefit. If i’d decided to have a child, worked out if it was affordable (inc CB) i’d be pretty annoyed if it was going to be taken away.

Back in the days when child benefit was introduced there was a real need for it, but many decades of rising living standards later, can it still be justified? I think not. In the depths of my old shed I have a slowly rusting tin dating from the early sixties that once contained state-issued milk powder for infants, I may well have drunk some of it. AFAIK the state doesn’t issue tins of milk powder anymore so shouldn’t the child benefit be reduced over the next decade, then be abolished?

Not matter how you try to distort it if you are earning enough money to get into the 40% tax band you are a part of the wealthiest minority in the UK

If you are ignoring location and living costs then you might as well go the whole hog and argue that everyone in the UK is “well off”.

Even the very poorest in the UK are very wealthy on the global scale.

ohnohesback – Member

Back in the days when child benefit was introduced there was a real need for it, but many decades of rising living standards later, can it still be justified?

Surely most people can afford private health insurance too so let’s bin the NHS while we’re at it.Insurance is less than the price of a family holiday abroad…

Graham – eve if you include living costs yo are still well off – how can you be in the top 10% of earners and not be?

Most of the population will never get anywhere near that level of income

4 bed detached on our rochdale street is 330k max so all will have low or none existant mortgage

ahh, that’s ok then…

I didn’t realise 330k houses were so easily affordable 😯

I couldn’t afford anything like a 330k house!!!
That’s a salary multiple of over 7x the higher rate threshold…..

80% of neighbours have been here since built 10yrs ago when they were half that price

THIS – This is an aspect overlooked by TJ (and others).

If you’ve lived in an area for a long while, family / family property in the area, ridden the house price increase etc, then 42.5k probably feels very comfortably off.

If you’ve moved to a new area for work, starting from fresh, then that is a very different position.

What are current mortgage multiples? Back to 3x salary? So a 40% tax payer could have a mortgage for 120k???? Well off my backside 😯

Graham – eve if you include living costs yo are still well off – how can you be in the top 10% of earners and not be?

The point was that living costs and other considerations mean that people receiving the benefits can end up more “well off” than people on higher incomes.

As rkk01 pointed out, you can be a top 10% earner but have significant enough outgoings that you have no disposable income.

Just pointing out the inherent flaws in basing UK wide tax decisions purely off personal income and national averages.

Thought you of all people would understand the need for the northern provinces to have more control of their own tax affairs due to different circumstances? 😀

Most of the population will never get anywhere near that level of income

As mentioned earlier, IFS say as many as 1-in-4 workers will be higher rate tax payers in a couple of years. So it is a pretty significant minority, not some rich elite.

The point was that living costs and other considerations mean that people receiving the benefits can end up more “well off” than people on higher incomes.

Rubbish – simply not possible unless you pay ridiculous amounts for housing

As rkk01 pointed out, you can be a top 10% earner but have significant enough outgoings that you have no disposable income.

Again – only if you make stupid choices

Just pointing out the inherent flaws in basing UK wide tax decisions purely off personal income and national averages.

so you should get taxed less because you earn more than 90% of the country and want to live in an expensive house?

some of you guys need a reality check badly.

Surely the govt. could easily make up the revenue by taxing the top 1% a fraction of a % more

The richest 1% is an incredibly wide band, ranging from your GP (possibly) to Lakshmi Mittal. Its reckoned that the richest 5% pay 20% of the UK’s income tax. But thats not a measure of how heavily your GP is taxed, its a measure of how incredibly rich the top 0.0001% are.

Rubbish – simply not possible unless you pay ridiculous amounts for housing…
…Again – only if you make stupid choices

Have you ever looked at house prices TJ?
The average UK price for a flat is £221,054 and that’s in the middle of a housing bust.

Some folk have to move for their jobs. Sometimes, as in rkk01’s example, that can mean moving somewhere where houses are really chuffin expensive.

Obviously sticking with a job and moving with it is a “stupid choice”?

so you should get taxed less because you earn more than 90% of the country and want to live in an expensive house?

I don’t recall anyone saying that.

My point, as I already said, was that there are large regional variations in living costs and that basing benefits and taxation decisions on personal (rather than household) income in relation to skewed UK-wide averages, without any consideration for outgoings and living costs is a fairly flawed system.

Rubbish – simply not possible unless you pay ridiculous amounts for housing

In many parts of the country that is the choice… 🙄

Again – only if you make stupid choices

See above – many choices are pretty limited, and incur costs other ways. We chose not to live in Cardiff because of house prices. Living outside of the city requires outlay (money and time) on travel.

so you should get taxed less because you earn more than 90% of the country and want to live in an expensive house?

And how much is an “expensive house” – Go on, I’m interested…

Well earlier in this I thought I would have a look to see what was so expensive about the south east that you have to earn so much to afford to live there.

I looked in Romford as its where my dad lived for a part of his childhood. a perfectly acceptable 3 bed semi could be rented for £1000 a month – £850 for a cheap one.

So that would seem that reasonable priced accommodation is available in the south east.

Rubbish – simply not possible unless you pay ridiculous amounts for housing

In many parts of the country that is the choice…

The paradox with housing is the price is what the buyer makes it, – a house costs what it costs because the person that bought it was prepared to pay more for it than anybody else

Have you ever looked at house prices TJ?
The average UK price for a flat is £221,054 and that’s in the middle of a housing bust.

Supply and demand,good old capitalism!
Maybe if second properties were taxed more then they would be less attractive to own.That way they could be released back into the market increasing supply for first time buyers and the like.
Scotland already has a landlord/tax avoidance/evasion problem according to this
http://www.heraldscotland.com/mobile/news/home-news/landlords-targeted-in-tax-crackdown.16830308?_=17b274c391b96b98bc8515c516e0b4917a2e7387

a perfectly acceptable 3 bed semi could be rented for £1000 a month – £850 for a cheap one.
So that would seem that reasonable priced accommodation is available in the south east.

Meantime a perfectly acceptable 3 bed semi can be had round this way for £450 a month.

If you’re buying then an average semi in the South East is £247k, versus £135k round here (Northumberland).

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/html/houses.stm

With regards to Child Benefit, surely it’s the income of a household, not that of an individual that is relevant. The fact that it may be one earner bringing in 42.5k, or two earners bring in that amount (or more) jointly seems irrelevant.

I would agree that households bringing in over 42.5k can live without it, but I don’t agree with bringing in a law that discriminates between “households” in this way.

Maybe if second properties were taxed more then they would be less attractive to own

Yes, a lot of people getting rich from renting out properties 😆

… and if your buying, even £135k is still above the 3x mortgage income multiple for someone just above the 40% threshold.

Just a thought on a tax raising measure.
In Spain if you buy a house you’ll pay around 7% purchase tax,depending on the region.
The buyer prices this into the offer they make,as no one pays the asking price.The buyer does not notice the tax as they should have accounted for it in the offer.The seller gets a lower than asking price but overvalued it to start with.
The tax raised goes direct to the local governement and keeps the council tax down to levels we can only fantasise about in the UK.

The tax raised goes direct to the local governement officer and keeps the council tax down to levels we can only fantasise about in the UK him in a life of luxury.

😉

joeegg: sounds like Stamp Duty Land Tax in the UK, but a local tax rather than central?

In Spain you’ll pay the equivalent of VAT plus a tax for change of ownership plus another tax AJD that I’m not sure about. It’s different.