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| ‘Our ability to save is non-existent’ – people respond to UK budget | ‘Our ability to save is non-existent’ – people respond to UK budget |
| (about 7 hours later) | |
| There was not much in the budget to please higher-rate taxpayer Charlotte Geeves, 42, and her self-employed partner, Chris, 47. Charlotte is the chief executive of the Henley Festival, a five-day music and arts festival that takes place in Henley every July, and the Geeves have a household income of over £100,000. | There was not much in the budget to please higher-rate taxpayer Charlotte Geeves, 42, and her self-employed partner, Chris, 47. Charlotte is the chief executive of the Henley Festival, a five-day music and arts festival that takes place in Henley every July, and the Geeves have a household income of over £100,000. |
| “At the moment, our ability to save is non-existent. Don’t get me wrong, we live well, we own our own home and we go on holiday at least once a year – but we have a large mortgage and our son, Henry, is three so we also have childcare bills to pay. Our budget is tight. We don’t have much wriggle room and we’ll have less money coming in as result of the increase in national insurance contributions for the self-employed. However, I think it will be manageable.” | “At the moment, our ability to save is non-existent. Don’t get me wrong, we live well, we own our own home and we go on holiday at least once a year – but we have a large mortgage and our son, Henry, is three so we also have childcare bills to pay. Our budget is tight. We don’t have much wriggle room and we’ll have less money coming in as result of the increase in national insurance contributions for the self-employed. However, I think it will be manageable.” |
| She’s not against the change. “I think it’s reasonable to increase the amount self-employed workers contribute, but I think the government should have simultaneously made sure the self-employed will get the same statutory pay as employed workers when it comes to holiday pay, sick leave and parental leave.” | She’s not against the change. “I think it’s reasonable to increase the amount self-employed workers contribute, but I think the government should have simultaneously made sure the self-employed will get the same statutory pay as employed workers when it comes to holiday pay, sick leave and parental leave.” |
| She was hoping to hear there would be further increases in the personal allowance. “That would have been an incentive to save.” | She was hoping to hear there would be further increases in the personal allowance. “That would have been an incentive to save.” |
| The couple own a second home, which they rent out. “We were recently charged the additional 3%stamp duty when we moved house. I’m disappointed the chancellor didn’t ditch that additional charge. Our second home is my partner’s pension. We’re being penalised for trying to protect ourselves and plan for our future.” | The couple own a second home, which they rent out. “We were recently charged the additional 3%stamp duty when we moved house. I’m disappointed the chancellor didn’t ditch that additional charge. Our second home is my partner’s pension. We’re being penalised for trying to protect ourselves and plan for our future.” |
| She would have liked to see the chancellor start means-testing pensioners’ benefits like the winter fuel allowance and the free TV licence for over 75s. “It’s bonkers to give those benefits to people who are financially secure in their retirement. Those benefits should only be given to people that need it.” | She would have liked to see the chancellor start means-testing pensioners’ benefits like the winter fuel allowance and the free TV licence for over 75s. “It’s bonkers to give those benefits to people who are financially secure in their retirement. Those benefits should only be given to people that need it.” |
| ‘I’ve had no choice but to evict tenants’ | ‘I’ve had no choice but to evict tenants’ |
| Buy-to-let landlord and property developer Jamie Brewis, 38, is annoyed about the reduction of the tax free allowance for dividends. He runs his own property development company, Haverbridge Homes and, as a 45% rate taxpayer, will pay about £1,000 more tax on his company dividends as a result of the changes. | Buy-to-let landlord and property developer Jamie Brewis, 38, is annoyed about the reduction of the tax free allowance for dividends. He runs his own property development company, Haverbridge Homes and, as a 45% rate taxpayer, will pay about £1,000 more tax on his company dividends as a result of the changes. |
| Outside his business, he has invested in 21 buy-to-let properties, in and around his hometown of Upminster, Essex. His tenants pay £23,500 a month in rent and he is concerned he may have to use more of that income to maintain his properties as result of the hikes in national insurance contributions for the self-employed. “Most of the people who do work for my company and maintain my properties are self-employed, and they may well put their rates up because of the national insurance hikes.” | Outside his business, he has invested in 21 buy-to-let properties, in and around his hometown of Upminster, Essex. His tenants pay £23,500 a month in rent and he is concerned he may have to use more of that income to maintain his properties as result of the hikes in national insurance contributions for the self-employed. “Most of the people who do work for my company and maintain my properties are self-employed, and they may well put their rates up because of the national insurance hikes.” |
| He is, however, relieved the chancellor chose not to raise taxes for buy-to-let landlords. “I’ve already had to sell a couple of properties, thanks to the new rules coming in,” he says. Measures introduced by George Osborne mean that, from 6 April, landlords will no longer be able to offset all of their mortgage interest against their tax bill. Jamie says he will be about £42,000 a year worse off from 2021 as a result of the changes. | He is, however, relieved the chancellor chose not to raise taxes for buy-to-let landlords. “I’ve already had to sell a couple of properties, thanks to the new rules coming in,” he says. Measures introduced by George Osborne mean that, from 6 April, landlords will no longer be able to offset all of their mortgage interest against their tax bill. Jamie says he will be about £42,000 a year worse off from 2021 as a result of the changes. |
| “I’d have liked these new measures to be reversed. I’ve had no choice but to evict tenants and sell some of my higher end properties with larger mortgages – otherwise I’d end up making a net loss. I would sell more, but I’d have to pay £80,000 in mortgage redemption fees. Personally, I won’t be buying anything else in the future as it’s more tax advantageous to run them through my company, and I may have to put my rents up. I don’t want to, but I may have to.” | “I’d have liked these new measures to be reversed. I’ve had no choice but to evict tenants and sell some of my higher end properties with larger mortgages – otherwise I’d end up making a net loss. I would sell more, but I’d have to pay £80,000 in mortgage redemption fees. Personally, I won’t be buying anything else in the future as it’s more tax advantageous to run them through my company, and I may have to put my rents up. I don’t want to, but I may have to.” |
| Brewis would have liked to have seen more help offered to the younger generation to buy housing. “A lot of young families earning £30,000 to £80,000 are looking to buy the properties I’m building in Essex, but they can’t afford them. I recently built and sold 56 new homes, and not one of my buyers were able to access the Help to Buy scheme. We need more hospitals, doctors’ surgeries and schools to be built – when new homes are built, local public services struggle to cope. Sometimes, it feels like everyone in London is moving out to Essex.” | Brewis would have liked to have seen more help offered to the younger generation to buy housing. “A lot of young families earning £30,000 to £80,000 are looking to buy the properties I’m building in Essex, but they can’t afford them. I recently built and sold 56 new homes, and not one of my buyers were able to access the Help to Buy scheme. We need more hospitals, doctors’ surgeries and schools to be built – when new homes are built, local public services struggle to cope. Sometimes, it feels like everyone in London is moving out to Essex.” |
| ‘I’ve got £10 left till the end of the month’ | ‘I’ve got £10 left till the end of the month’ |
| Factory manager George Pasparakis, 41, and his wife Suze, 53, were surprised – and relieved – to hear that the chancellor offer extra funding for the NHS and social care in the Budget. | Factory manager George Pasparakis, 41, and his wife Suze, 53, were surprised – and relieved – to hear that the chancellor offer extra funding for the NHS and social care in the Budget. |
| Suze, a former NHS worker, has MS and was forced to give up her job due to her ill health in 2016. George hopes the extra investment will mean she will be able to see specialists quicker and spend less time in pain. “I would have liked to have seen even more money invested, of course – but we will take what we can get.” | Suze, a former NHS worker, has MS and was forced to give up her job due to her ill health in 2016. George hopes the extra investment will mean she will be able to see specialists quicker and spend less time in pain. “I would have liked to have seen even more money invested, of course – but we will take what we can get.” |
| He was pleased to hear about the creation of T-levels. “As someone who works in a factory, I know young people today lack technical skills – but there are lots of them who I think would benefit from learning a trade, and are not going to get anywhere at university.” | He was pleased to hear about the creation of T-levels. “As someone who works in a factory, I know young people today lack technical skills – but there are lots of them who I think would benefit from learning a trade, and are not going to get anywhere at university.” |
| His own step-daughter Daisy, who is 16, may be tempted to do a T-level, he thinks. “The key question for me is whether they will get the teaching and the structure of this new qualification right, or whether they will make a mess of it.” | His own step-daughter Daisy, who is 16, may be tempted to do a T-level, he thinks. “The key question for me is whether they will get the teaching and the structure of this new qualification right, or whether they will make a mess of it.” |
| He was disappointed there were was no extra increase announced in the personal allowance. With a household income of just under £30,000, the family is among those Theresa May refers to as “just about managing”. “After I’ve paid my bills out of my paycheque and bought some food and petrol, I’ve got £10 left till the end of the month,” says George. “Putting up the personal allowance would have been the equivalent of getting a pay rise for me.” | He was disappointed there were was no extra increase announced in the personal allowance. With a household income of just under £30,000, the family is among those Theresa May refers to as “just about managing”. “After I’ve paid my bills out of my paycheque and bought some food and petrol, I’ve got £10 left till the end of the month,” says George. “Putting up the personal allowance would have been the equivalent of getting a pay rise for me.” |
| They live in a village in the countryside near Sherborne, and so were glad to hear there will be no hikes to petrol duty. “I spend about £100 a month on petrol because I have a 10-mile drive to work and back, so I’m relieved about that,” says George. | They live in a village in the countryside near Sherborne, and so were glad to hear there will be no hikes to petrol duty. “I spend about £100 a month on petrol because I have a 10-mile drive to work and back, so I’m relieved about that,” says George. |
| He also welcomed the cap in business rates for small businesses. “I work for a small business, and put my heart and soul into it. Anything that will help us survive is a good thing.” | He also welcomed the cap in business rates for small businesses. “I work for a small business, and put my heart and soul into it. Anything that will help us survive is a good thing.” |
| ‘I am concerned how Brexit will affect our finances’ | ‘I am concerned how Brexit will affect our finances’ |
| Michelle McDermitt, 43, is married with two young children. “Our oldest son is five and at school until 3pm when he goes to an after school club. Our youngest, who is two, attends a local nursery five days a week, term time only. My husband and I both take advantage of childcare vouchers through our employers which eases the financial burden a little,” she says. | Michelle McDermitt, 43, is married with two young children. “Our oldest son is five and at school until 3pm when he goes to an after school club. Our youngest, who is two, attends a local nursery five days a week, term time only. My husband and I both take advantage of childcare vouchers through our employers which eases the financial burden a little,” she says. |
| McDermitt welcomed the chancellor’s confirmation that working parents of three- and four-year-olds will be entitled to 30 hours’ free childcare a week. Although they live in Swindon they were outside the pilot-scheme in the city but hope to take advantage when it is rolled out nationally in September. “I do have concerns that the quality of care may be reduced where nurseries/childcare providers find a shortfall between the value of funded hours and their actual operating costs,” she says. “I also think there may be capacity issues where demand for childcare places increases and despite the additional support, families may still be unable to work.” | McDermitt welcomed the chancellor’s confirmation that working parents of three- and four-year-olds will be entitled to 30 hours’ free childcare a week. Although they live in Swindon they were outside the pilot-scheme in the city but hope to take advantage when it is rolled out nationally in September. “I do have concerns that the quality of care may be reduced where nurseries/childcare providers find a shortfall between the value of funded hours and their actual operating costs,” she says. “I also think there may be capacity issues where demand for childcare places increases and despite the additional support, families may still be unable to work.” |
| McDermitt describes herself as “meticulous about budgeting” and says she thinks she has enough flexibility in the household finances to absorb potential price increases or interest rate rises. “However, I’m concerned about how Brexit will affect our finances,” she says. “Over the longer term, I am anxious how my pension will be affected and if my investments will drop in value. I also worry that the financial landscape may look very different once my children are older and have to make decisions about further education, home ownership or starting their own families. Although my husband and I are already setting aside money for their future, I hope their opportunities aren’t restricted by the current economic situation.” | McDermitt describes herself as “meticulous about budgeting” and says she thinks she has enough flexibility in the household finances to absorb potential price increases or interest rate rises. “However, I’m concerned about how Brexit will affect our finances,” she says. “Over the longer term, I am anxious how my pension will be affected and if my investments will drop in value. I also worry that the financial landscape may look very different once my children are older and have to make decisions about further education, home ownership or starting their own families. Although my husband and I are already setting aside money for their future, I hope their opportunities aren’t restricted by the current economic situation.” |
| Low returns mean McDermitt has given up on a cash Isa in favour of a stocks and shares Isa with a provider called Moneyfarm, but she suggests there is little incentive to save. “The personal savings allowance for most is a bit of an empty gesture and taxes such as inheritance tax seem so excessive, and unfair for families who’ve worked hard to provide a legacy for their next of kin.” | Low returns mean McDermitt has given up on a cash Isa in favour of a stocks and shares Isa with a provider called Moneyfarm, but she suggests there is little incentive to save. “The personal savings allowance for most is a bit of an empty gesture and taxes such as inheritance tax seem so excessive, and unfair for families who’ve worked hard to provide a legacy for their next of kin.” |
| ‘I don’t mind paying more NI if it helps social care’ | |
| Self-employed electrician Julian Kirby says he has no objection to paying a bit more National Insurance if it means the chancellor has money to fund better social care. | Self-employed electrician Julian Kirby says he has no objection to paying a bit more National Insurance if it means the chancellor has money to fund better social care. |
| Following the budget statement the 53-year-old father of two, and soon to be grandfather, who lives in Ickleford, near Hitchin, Hertfordshire, faces a £20 a year increase in his national insurance contributions from April 2018, and a further £150 increase in NI payments, from the following April, according to accountants BDO. | Following the budget statement the 53-year-old father of two, and soon to be grandfather, who lives in Ickleford, near Hitchin, Hertfordshire, faces a £20 a year increase in his national insurance contributions from April 2018, and a further £150 increase in NI payments, from the following April, according to accountants BDO. |
| “If it’s true that the self-employed aren’t paying enough to help fund decent social care, then I for one am happy to be charged a bit more – provided we get something back, if and when we need to claim when we get to that age,” he says. “Social care looks to be in a funding crisis and I don’t think it’s the end of the world to be asked to contribute a bit more.” | “If it’s true that the self-employed aren’t paying enough to help fund decent social care, then I for one am happy to be charged a bit more – provided we get something back, if and when we need to claim when we get to that age,” he says. “Social care looks to be in a funding crisis and I don’t think it’s the end of the world to be asked to contribute a bit more.” |
| In his speech, the chancellor said that a PAYE employee earning £32,000 a year contributed over £6,100 a year in NI through both their, and the employer’s contributions. Hammond compared that to the £2,300 paid by a self employed worker earning the same amount. | In his speech, the chancellor said that a PAYE employee earning £32,000 a year contributed over £6,100 a year in NI through both their, and the employer’s contributions. Hammond compared that to the £2,300 paid by a self employed worker earning the same amount. |
| “It can be quite tough being self-employed, but I think I can cope with those sort of increases,” says Kirby. “ To be honest I was more worried about a big hike in diesel pump prices given that I drive 28,000 to 30,000 miles each year both through work and with personal mileage. A few pennies on a litre of diesel would have had a much bigger impact on my personal finances than having to pay £150 a year more national insurance.” | “It can be quite tough being self-employed, but I think I can cope with those sort of increases,” says Kirby. “ To be honest I was more worried about a big hike in diesel pump prices given that I drive 28,000 to 30,000 miles each year both through work and with personal mileage. A few pennies on a litre of diesel would have had a much bigger impact on my personal finances than having to pay £150 a year more national insurance.” |