This was originally an idea for the Just Jot Jan challenge, but as it’s not actually a jot, grab a coffee and biscuits and I’ll work on something else for tomorrow.
Hubby and I were listening to the debate about disabled persons allowances being reconsidered, Brexit and UK poverty. Our PM Theresa May continues to spout on about the number of people the Tories have lifted out of the tax bracket, resulting in, she says, the standard tax payer being £1000 a year better off in their paypacket (over a three year period I might add).
For someone to have one thousand pounds extra in their wages, that means they must have been paying TAX to equate to £1000.
The standard rate is currently 20% after the threshold of £11,500 pa. So, our ‘standard tax payer’ would need to earn £16,500 a year and pay tax at 20% on £5000 (ie. said £1000). However, the tax threshold does not go up in increments of £5000 to warrant £1000 in the hand. It goes up in hundreds, so in the wage packet that is one fifth of whatever the increase is, divided by the number of months or weeks depending on the frequency of the paycheck.
The personal tax allowance in 2010 was £6,475. So if a tax payer was earning £11,500 then (and not having had an increase in wages since, and some have not had anything substantial I might add) they would now be said £1000 a year better off tax wise compared to 8 years ago.
Throw into the equation that it is considered a single person needs £13,400 pa and a couple with two children £26,800 pa to live to an acceptable standard today (source)
What Ms May has to remember is that those already out of the tax bracket will not benefit from future increases in the personal allowance.
Over the past eight years when the Tories came into power over Labour (with a little help from the Lib Dems), everything continues to go up. Our local taxes and heating bills have increased as have fuel and food, not to mention compulsory insurance costs and the government tax on those too, so this eats well into the ‘£1000’ a year extra.
For those on a fixed income who do not pay tax, they are still expected to cover the day to day cost of living with nothing extra to work with.
I found this projection for our single pensioners in 2050.
Even in 2015 there was a serious shortfall, and pathetic, if any, interest rates on savings no longer provides any extra income to act as a buffer.
Pay rises are few and far between, and 1%, if lucky, on a low wage is not very much. According to the BBC, inflation rose to 3.1% in November 2017 using the CPI (Consumer Price Index).
However, read the official Government figures and inflation is quoted as 2.8% in November reducing to 2.7% in December. Note they have added another letter to their calculation body, and it is now the CPIH, as it takes into account owner/occupier housing costs too.