child benefit..

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

how much rent/mortgage do you pay out TJ?

whats the market rate?

All this £35-40k pa makes you extremely well off – is that means tested? Working tax credits certainly aren’t – they simply look at your salary and say yay or nay, ignoring whether you live in a cheap as chips town up north or the ridiculously expensive South.

Down here we are £2k per month down on rent and childcare before we have even started on heating, fuel, food, clothes, council tax. This is on rent on a very small starter home that we cram 4 people in. We rely on every penny we have coming in, and are about to lose child benefit because someone in Hull earning my salary is “well off” apparently.

And TJ – have you ever been to Romford? Its a war zone. Try looking at somewhere that you might wat to actually bring kids up.

If the house/street/town/region you live in is expensive its because you and your neighbours make it expensive. People generally pay as much as they can to live in the best house they can. Housebuyers, collectively, set the price of the houses they buy, and the they set it at the most they can possibly afford. If you were to provide subsidy through tax and benefits to people buying in Kensington then the result of that would be the cost of buying in Kensington would increase, because people who want to live there would continue to pay as much as they could afford to live there.

I’ve recently moved to one of the most expensive neighbourhoods in scotland to what is quite possibly the cheapest neighbourhood in scotland. But I’m paying the same rent because I can and I like what I can get for my money.

Its a fallacy to say “after I’ve paid my rent / mortgage I only have ‘x’ left to live on” The decision people make is “I can manage to live on “x” so I’ll spend the remainder on the nicest house I can find”

TandemJeremy – Member
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.

Stop trolling. Everyone knows your sample of a website and a few houses in one place in the South East is not representative of the wider region.

Just accept that average individual income is not a very good measure.

Its a fallacy to say “after I’ve paid my rent / mortgage I only have ‘x’ left to live on” The decision people make is “I can manage to live on “x” so I’ll spend the remainder on the nicest house I can find”

The latter was probably true until the world all went wrong a few years ago … now, the former is generally a more accurate picture for a lot of people …

Welcome to Romford.

Don’t forget, some people here live in one of those parallel universes. You know the one, where you can live a 5 minute walk from your work, or where public transport exists.

I still don’t get this high income equals wealthy thing.

In my opinion “wealth” is accumulated retained net income or inherited assets, e.g. people with 2 or more flats/houses with little in the way of mortgages or other debts.

We’ll likely lose it, and with three kids, it’ll be a noticeable amount, £200 a month. But we never really needed it, and if it hadn’t been around fifteen years ago wouldn’t have influenced our decision to have kids. Not qualifying for WTC/CTC either. There used to be an argument that the state gives at least symbolic support for family life, but that seems to have gone too. I remain unconvinced that anyone getting around or above the average wage should be getting any benefits, massive bureaucracy and skewed labour market results. Plus the opportunity for politicians to keep offering rises come election time only to find the country bankrupt by the time the next election comes round.

Don’t forget, some people here live in one of those parallel universes. You know the one, where you can live a 5 minute walk from your work, or where public transport exists.

Like tram systems perhaps? 😉

rkk01 – Member
After all, the furore about the £26k (?) benefits cap was quite enlightening. What does 26k after tax equate to as an earned gross salary equivalent? – must be somewhere in the mid 30s????

I can see your point that someone could in theory “earn” £26k tax free in benefits. One person would need to earn just shy of £35k gross to end up in the same ball park.

But when my CTC notice arrived for 2012/13 the upper cap was £26k, gross. As a family we are now £240 a month worse off.

I’ve had mixed fortunes with jobs / redundancies / jobs over the last few years. I went from circ £30K to £14K and now back up to £30K. Plus The Wife now works part time. I can testify that £30K is bloody comfortable compared to £14K.

I can only dream of the “hardship” that £42K must bring.

very few public servants will ever get into that £40 000+ bracket. So how do you think nurses, teachers, etc manage in the south east?
simple – its cut your cloth according to your means.

Still avoiding the question up in your ivory tower tj…

what jambo? I pay around £300 a month – dead cheap. I do live in a one bed flat in a non posh part of town.

very few public servants will ever get into that £40 000+ bracket

Well, not until they retire that is 🙂

When they’ll then take out a big lump sum and have a final salary pension – which is why the rest of us need to pay higher taxes.

what jambo? I pay around £300 a month – dead cheap. I do live in a one bed flat in a non posh part of town.

As said TJ, you’ve no idea of the costs involved for the majority of us.

Ah but I do BR and the point remains no matter what your costs are earning in the top 10% of earners makes you well off which is the basic point

My heart bleeds for all these people on the breadline on £42 000 pa who cannot possibly live in a cheap house.

90% of the population don’t get these choices including the vast majority of public servants. you know -the folk who empty your bins, the ones who teach your kids, the ones who look after your granny when she is ill, the ones run all the services you take for granted. they have to live in the south east as well and they do not earn £42 000+ PA

Reality check required please

TJ is absolutely right of course.

it’s just a shame that his point is lost in the pious way he posts it…

(100!)

And TJ – have you ever been to Romford? Its a war zone.

LOL. Plenty of places you could live in Essex within commuting distance to London where you could rent a family home for less than 50% of your take home on a 42k income. It’s a simple measure to implement I guess. I know that simplicity means there will be some losers in this scenario but most people with at least £40k coming into the household should be able to adjust with only a reasonable amount of pain IMO. Have a look at the changes to WTC if you want to find some people who are about to really suffer 🙁

Agree with ho hum, takehome is an indication of wealth, but it should not be taken in isolation. Those who have managed to scrape themselves onto the housing ladder for the first time in the last few years are saddled with pretty big outgoings. Those with more modest incomes but cashed in on the equity boom are in much much better positions. The majority of my colleagues in their late 30s early 40 s are in nice family homes and pretty close to paying mortgages off…..things are very different for those in their early 30 s. My poor sisters in their early 20s are resigned to living at home until their thirties! Salary is a bollox way of determining if someone is wealthy.

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?

The state does still pay for baby milk for those on the lowest income.
You recieve a ‘healthy start’ voucher and use it to pay for the milk at a shop ,rather than having to collect it from the health centre, thats the only difference.

TJ – the point remains no matter what your costs are earning in the top 10% of earners makes you well off which is the basic point

actually that is the top 10% of tax payers, not the top 10% of earners. If you bear in mind that there are a lot of tax payers who aren’t in employment (esp. retired people), then the %age is different. I’d contest household incomes are more relevant in considering child benefit anyway.

However, generally speaking I don’t think most people have an absolute objection to getting rid of the benefit for high earners (although tell anyone that they will loose say 5% of their net income and they will understandably be concerned) – inevitably anyone just the wrongside of the threshold wishes they weren’t. What I do hear people objecting to is that HOUSEHOLDS with earnings just over the limit from a single earner will loose the income but households with joint incomes will not, and perhaps most concerning households with joint incomes at the top 3% will still qualify…

HMRC stats for income.

http://www.hmrc.gov.uk/stats/personal_incomes/statistics-release-note.pdf

Amusing graph on page 10.

Basically, if you’re in the bottom 90% of earners, your salary has been slowly increasing over the last decade.

If you’re in the top 1% of earners, though, your salary has gone up around 60% in the last decade.

I guess because you’re worth it.

And that was under a Labour(champagne socialist swigging)government!

Where did this top 10% figure come from by the way? I noticed Nick Robinson said ” only 15% of people earn enough to be higher rate taxpayers.”

Other google sources say there are currently 3.74 million higher rate tax payers. And the IFS says 1-in-4 will be higher rate taxpayers by 2015. As I said, this isn’t some wealthy elite in gold plated hot tubs we’re talking about.

poly has it right – the issue is fairness.

Suggesting that higher earners may not need the Child Benefit is fair. It’s rather against the idea of a universal benefit, but fair.

However removing the benefit based on one salary, while allowing households with far higher incomes to keep it is unfair.
Likewise expecting households with children to suffer much greater benefit cuts than those without is unfair, especially at a time when funding cuts means they already suffering due to various child facilities and support services being withdrawn.

Graham S, the only caveat I’d have against your point above is that a dual income family might well have a healthy childcare bill.

Where did this top 10% figure come from by the way?

HMRC. But it turns out that the “top 10%=£40k” statistic is from 2008. Google is your friend.

How about flipping the argument on it’s head. How much money will be saved in removing child benefit from the top 10% compared to the cost of administering it?
Miss CD is from Denmark, a country often put forward as having one of the best standards of living and social care in the World. Their child benefits (and may other) are universal and most women are only out of work for a year when they have a child where as in the UK women often have to take a career break for 5 years as childcare costs are so high. Consequently they have far more women in you positions that we do. It could be argued that in the UK by achieving ‘fairness’ based on salary we could help create (continue) gender inequality.

Graham S, the only caveat I’d have against your point above is that a dual income family might well have a healthy childcare bill.

As someone in that exact position, I’d definitely agree 😀
Childcare costs can be crippling and there is a definite consideration of “is it worth both of us working when the childcare costs are practically one salary?”

Someone will be along to tell you you shouldn’t have had kids 🙄

Indeed. I’ve got money on who it’ll be too 😀

Before tax people in the 90th percentile get £46,600 (09/10).

After tax people in the 90th percentile get £39,200 (09/10)

Here is an informative table:

(source)

I may just need a coffee, but I have no idea how to read that table or what it shows. Can you explain it and where you get your £39,200 figure from?

The table refers to the cumulative amount of tax (in millions) per salary group and numbers of people per group are in thousands. Hence those earning over £30k pa, 5.4million people pay the largest amount of tax (cumulatively) but are the biggest group.

You shouldn’t have kids.

tonyg2003, ta! I’m being a bit slow today.

So… the 30k is lower limit. So the range means 30-50k, yes?

Looks like that is the second biggest group with 5,490,000 people, with the biggest being 20-30k with 6,800,000?

Why the odd distribution of the ranges?

And how does this relate to the £46,600 pre-tax, £39,200 after tax figures that CaptJohn mentioned?

TandemJeremy – Member
very few public servants will ever get into that £40 000+ bracket. So how do you think nurses, teachers, etc manage in the south east?
simple – its cut your cloth according to your means.

Erm, they get things like London waiting, first dibs on shared accomodation etc.

Things that we are unable to get because we both work and are just above the cut off line. The fact that we both work and pay a fortune in childcare is not taken into account – apart from by the mortgage lenders who say that we earn too little disposable income to warrant lending money to.

very few public servants will ever get into that £40 000+ bracket. So how do you think nurses, teachers, etc manage in the south east?

This is disingenuous anyway