Mortgage Rate Rises

[413x]

For most people inflation will be worse for sure. But yes, for some mortgage rate would be.
But it will be only a few.

For ourselves, yes, the mortgage rates is probably worse than inflation because inflation is uneven.
2pc mortgage to 6pc mortgage is a lot.
But even if we were exposed to that inflation at 5-10pc for even 3 years would end up being worse.

4pc increase would = 400ppm
For other costs to increase by 400ppm would take some seriously nasty inflation

 

[slinxy]

8% pay rise...

You talk about that like it's the norm..most people are lucky to get 2% and that was before covid/Ukraine/Gaza... lol

I've moved jobs just over two years ago and been lucky to receive payraises of 6% each year, they even did a cost of living boost mid way during a year which they factor into that year's final payraise.

if I didn't move jobs and switch from public selector to private selector at receive a 25% boost in pay by doing so before the cost living issue, I don't know I would manage.

Payraises are nice but with the tax brackets frozen, it's causing fiscal drag and people are getting moved to higher tax brackets. So you either have to stash it away into pensions or other long term tax free schemes or efficiently a 8% payrise is only a 4% raise as you're getting taxed double on the new extra amount if it moves you from basic to higher rate tax.

One thing I hope labour does is to remove this freeze on the bands and adjust them accordly to inflation, this will free up a lot of spending power and get businesses going again.

 

[413x]

I've moved jobs just over two years ago and been lucky to receive payraises of 6% each year, they even did a cost of living boost mid way during a year which they factor into that year's final payraise.

if I didn't move jobs and switch from public selector to private selector at receive a 25% boost in pay by doing so before the cost living issue, I don't know I would manage.

Payraises are nice but with the tax brackets frozen, it's causing fiscal drag and people are getting moved to higher tax brackets. So you either have to stash it away into pensions or other long term tax free schemes or efficiently a 8% payrise is only a 4% raise as you're getting taxed double on the new extra amount if it moves you from basic to higher rate tax.

One thing I hope labour does is to remove this freeze on the bands and adjust them accordly to inflation, this will free up a lot of spending power and get businesses going again.

As someone who would also benefit I can't see them doing that. It's not very labour.
It would force more unpleasant decisions and look terrible to those not in the 40 bands.

"we are giving some free money to the well paid but cutting your bins" won't go down well.

 

[danlightbulb]

One thing I hope labour does is to remove this freeze on the bands and adjust them accordly to inflation, this will free up a lot of spending power and get businesses going again.

Unlikely imo, one of the defining features of the Blair Brown era was massive fiscal drag, it was the Tory Lib Dem coalition that finally lifted tax bands. If I remember correctly the tax free allowance was still only in the region of £6-7k in 2010 and over only a few years was lifted to £10k when Labour lost power.

 

[slinxy]

As someone who would also benefit I can't see them doing that. It's not very labour.
It would force more unpleasant decisions and look terrible to those not in the 40 bands.

"we are giving some free money to the well paid but cutting your bins" won't go down well.

Unlikely imo, one of the defining features of the Blair Brown era was massive fiscal drag, it was the Tory Lib Dem coalition that finally lifted tax bands. If I remember correctly the tax free allowance was still only in the region of £6-7k in 2010 and over only a few years was lifted to £10k when Labour lost power.

it has been hinted at..

Rachel Reeves hints at Labour tax cuts for top earners

Shadow chancellor seeks to recast party as the champion of growth

www.telegraph.co.uk

 

[matt100]

Unlikely imo, one of the defining features of the Blair Brown era was massive fiscal drag, it was the Tory Lib Dem coalition that finally lifted tax bands. If I remember correctly the tax free allowance was still only in the region of £6-7k in 2010 and over only a few years was lifted to £10k when Labour lost power.

£7000 in 2010 is just over £11k now.

 

[Mercenary Keyboard Warrior]

Unlikely imo, one of the defining features of the Blair Brown era was massive fiscal drag, it was the Tory Lib Dem coalition that finally lifted tax bands. If I remember correctly the tax free allowance was still only in the region of £6-7k in 2010 and over only a few years was lifted to £10k when Labour lost power.

There was a 10% band as well however

Starting rate of UK income tax - Wikipedia

en.wikipedia.org

 

[413x]

it has been hinted at..

Rachel Reeves hints at Labour tax cuts for top earners

Shadow chancellor seeks to recast party as the champion of growth

www.telegraph.co.uk

I'd be shocked if it happened.
Surely they'd raise the nil band rather than the others?

Think it would be a mistake for Labour myself. It's certainly bold!

They certainly wouldn't just do the 125k band.. That would be suicide

Raising the 50k 40pc rate to 60k would cost 6bln.
That would be a chunky pay rise for me.. I don't think it's justifiable myself.

It says raising the nil band by 10 percent would cost 10bln.

But surely that's the one to do. It would appeal to the masses.



Stranger things have happened.. Ie truss... But Labour would have to raise the nil band and maybe the the next. Surely rasing the top band is not worth the backlash?

 

[slinxy]

I'd be shocked if it happened.
Surely they'd raise the nil band rather than the others?

Think it would be a mistake for Labour myself. It's certainly bold!

I'm not sure if the country can afford it at the moment, you know... with the current governments past spending.

 

[413x]

I'm not sure if the country can afford it at the moment, you know... with the current governments past spending.

There's no money for anything with all the corruption around.
I'd rather labour sort this out myself.
My sister in Birmingham is looking at 20pc council tax hike over 2 years. That's grim.

I'm sure many of us would.
Truely hope Labour are less corrupt than the tories. Starmer.. For his faults.. Does seem a decentish guy.

 

[Nemiyen]

There's no money for anything with all the corruption around.
I'd rather labour sort this out myself.
My sister in Birmingham is looking at 20pc council tax hike over 2 years. That's grim.

I'm sure many of us would.
Truely hope Labour are less corrupt than the tories. Starmer.. For his faults.. Does seem a decentish guy.

That's because Birmingham council is Labour run and they got into trouble with the SAP to Oracle ERP rollout being a disaster.

Might not make any difference who runs it etc but I think they're bankrupt, hence the massive increases.

 

[Mercenary Keyboard Warrior]

That's because Birmingham council is Labour run and they got into trouble with the SAP to Oracle ERP rollout being a disaster.

Might not make any difference who runs it etc but I think they're bankrupt, hence the massive increases.

Its not really a labour thing (specifically), although its possible to draw that conclusion if you wanted to.

Their main issue was their attempting to skirt round the equal pay act.
Then after many years losing the court case and being on the hook for crazy large payouts to fix the historical situation they created.

If they had of been able to simply put up council tax to be able to pay the equal wages they may have had a chance.

There is certainly some politics involved, and as ever some groups of men who refused to admit their role whilst more physical wasn't any higher value adding.

Its going to come to more and more councils due to the massively reduced funding from central and the restrictions on increases in council tax.
Something has to give, right now its services, getting increasingly stripped back to the bare legal required minimums, once there is nothing "optional" left then another will probably fall...

 

[danlightbulb]

£7000 in 2010 is just over £11k now.

Yes its definitely dragged the last few years since it reached around £12k. But the change from £7k ish to £10k happened quite quickly because it was a Lib Dem condition of going into coalition. But in itself that was only catching up what fiscal drag had been happening under Blair Brown.

My sister in Birmingham is looking at 20pc council tax hike over 2 years. That's grim.

Yep we are in for 10% per year increase for 2 years. I have written to MP about it. Labour-run council though, not Tory. The problem is that local councils are living beyond their means, trying to do too much imo. And areas like Birmingham are poorer than other areas of the UK. Why should some councils be struggling and others so rich they can line the street with pretty flowers every year?

That's because Birmingham council is Labour run and they got into trouble with the SAP to Oracle ERP rollout being a disaster.

Might not make any difference who runs it etc but I think they're bankrupt, hence the massive increases.

They are bankrupt because of an IT project failure and lots of equal pay claims - but why should residents of Birmingham pay for those failures when they had absolutely nothing to do with it? I don't like the local council system, would rather see it centralised and come out of general taxation in full.

If they had of been able to simply put up council tax to be able to pay the equal wages they may have had a chance.

There is certainly some politics involved, and as ever some groups of men who refused to admit their role whilst more physical wasn't any higher value adding.

Its going to come to more and more councils due to the massively reduced funding from central and the restrictions on increases in council tax.
Something has to give, right now its services, getting increasingly stripped back to the bare legal required minimums, once there is nothing "optional" left then another will probably fall...

There is a reason why pay wasn't equal though - different types of jobs.

Everyone wants more money, of course they do, and in some sectors employees have a lot of power (unions etc), but there has to be value for money for the tax payer too.

 

[Jono8]

it has been hinted at..

Rachel Reeves hints at Labour tax cuts for top earners

Shadow chancellor seeks to recast party as the champion of growth

www.telegraph.co.uk

"champion of an ideology that will logically will lead to humanity's ruin. One that was only devised to continue to make the already rich, richer."

Cool

 

[Mercenary Keyboard Warrior]

There is a reason why pay wasn't equal though - different types of jobs.

Everyone wants more money, of course they do, and in some sectors employees have a lot of power (unions etc), but there has to be value for money for the tax payer too.

This was literally the logic that they tried to use and they lost in court in regards.
Yes of course a bin man is a different job to a receptionist.

The problem was that the jobs historically done by men were higher paid. There seemed to be no tangible link between the difficulty and complexity and physicality.
It went bac basically to when a mans job needed to support the family, the womens jobs didn't.
Legislation stopped the difference simply being this.
What most companies and councils did was band similar roles. As long as it was based on a fair assessment then you had a defence.

 

[413x]

Yes its definitely dragged the last few years since it reached around £12k. But the change from £7k ish to £10k happened quite quickly because it was a Lib Dem condition of going into coalition. But in itself that was only catching up what fiscal drag had been happening under Blair Brown.


Yep we are in for 10% per year increase for 2 years. I have written to MP about it. Labour-run council though, not Tory. The problem is that local councils are living beyond their means, trying to do too much imo. And areas like Birmingham are poorer than other areas of the UK. Why should some councils be struggling and others so rich they can line the street with pretty flowers every year?


They are bankrupt because of an IT project failure and lots of equal pay claims - but why should residents of Birmingham pay for those failures when they had absolutely nothing to do with it? I don't like the local council system, would rather see it centralised and come out of general taxation in full.



There is a reason why pay wasn't equal though - different types of jobs.

Everyone wants more money, of course they do, and in some sectors employees have a lot of power (unions etc), but there has to be value for money for the tax payer too.

It is a weird system council's going bankrupt.
Also. That 20pc rise is baked in forever.

There needs to be real punishment for the people in charge. And that isn't just sacked and go to another job.

That's the issue with senior level pay. Even mistakes mean you often get paid off and can pick up another job.

No idea what the solution is. How do you penalise those who f up without hurting innocent residents?

My sister and bf are band B. We are band E.
Our CT rise. Will be less than thiers this year. In fact it will bring their B much closer to our E.
Edit. Not quite. Assuming we get the full 5pc.we will. Ours goes up 100, for them 150 each year

 

[danlightbulb]

Here's a chart of personal allowance vs RPI inflation index from 1991 to 2023. Data sourced from ONS.

There may be nuances not visible in this data such as if there was another tax band in place or the percentage tax rate changed which happened as well over that time frame.

But shows that up to about 2008 the personal allowance was slightly dragging behind inflation, and then from 2009 it went up by quite a lot, exceeding the rate of inflation until about 2020 when its then been static.

Interesting that it actually appears to have ended up to be inflation matching though over that 25 year time frame.

 

[Mercenary Keyboard Warrior]

Here's a chart of personal allowance vs RPI inflation index from 1991 to 2023. Data sourced from ONS.

There may be nuances not visible in this data such as if there was another tax band in place or the percentage tax rate changed which happened as well over that time frame.

But shows that up to about 2008 the personal allowance was slightly dragging behind inflation, and then from 2009 it went up by quite a lot, exceeding the rate of inflation until about 2020 when its then been static.

Interesting that it actually appears to have ended up to be inflation matching though over that 25 year time frame.

The changing bands and increases was actually one of the LDs pledges that was one of the things they did manage to achieve in coalition. It wasnt a Tory policy running upto the elections.
Of course by the end of the parliament you would have thought it was tory policy for like ever!

 

[Nemiyen]

Yes its definitely dragged the last few years since it reached around £12k. But the change from £7k ish to £10k happened quite quickly because it was a Lib Dem condition of going into coalition. But in itself that was only catching up what fiscal drag had been happening under Blair Brown.


Yep we are in for 10% per year increase for 2 years. I have written to MP about it. Labour-run council though, not Tory. The problem is that local councils are living beyond their means, trying to do too much imo. And areas like Birmingham are poorer than other areas of the UK. Why should some councils be struggling and others so rich they can line the street with pretty flowers every year?


They are bankrupt because of an IT project failure and lots of equal pay claims - but why should residents of Birmingham pay for those failures when they had absolutely nothing to do with it? I don't like the local council system, would rather see it centralised and come out of general taxation in full.



There is a reason why pay wasn't equal though - different types of jobs.

Everyone wants more money, of course they do, and in some sectors employees have a lot of power (unions etc), but there has to be value for money for the tax payer too.

I'd completely missed the equal pay issue which makes the failed it project look like pocket change!

I guess the only way the local people can be held accountable is when they voted for the people running the council in the local elections. It's a stretch but if they voted for someone else, it could have been a different outcome.

 

[happy_2008]

Average 5 year rate is now under 4%