Jump to content
House Price Crash Forum
interestrateripoff

Young People's Weird Ways Of Finding Cheaper Rent

Recommended Posts

http://www.bbc.co.uk/newsbeat/article/31946302/young-peoples-weird-ways-of-finding-cheaper-rent

You've left education, you've got a job - you should have the money to rent your own place, right?

For Rosie, Polly and Edward, it hasn't been that simple.

As average rent prices grow across large parts of the country, they've had to find cheaper solutions - but at a potential cost to their standard of living.

Richard, a volunteer for the homeless charity Shelter, has been to meet them.

Rosie: I shared a bed to save money

"For just over a year I shared a bed with my best friend Katie," explains university graduate Rosie.

"It was a bonkers situation," she adds. But with reduced rent, it allowed her to get out of her overdraft and even go on holiday.

However, she says, "it's just not a sustainable way of leading your life. We were like each other's wife."

Rosie now has a bedroom to herself, but this means she is once again feeling the pinch.

"We're now paying three times what we were paying when living in the room together. Over half of our salary goes on just living."

I think less went on rent in the middle ages....

Share this post


Link to post
Share on other sites

(edit - I got this totally wrong, and was using a stupid, non government calculator originally.I've amended the maths - it's a *lot* less good than it was before, but I still maintain that young people can fight back using it)

The plan for young people to play, show the insanity of, and eventually bring down the sorry system.

This person is clearly not claiming the state subsidies they could under the crazy system.

Just did a quick test:

* Work enough to earn personal allowance - 10.6K in your pocket, per year,

- or better still, earn much more, and put everything above that into private pension. Completely discredited for the calculation of benefits as long as it's less than 30k (i.e. you can earn 40k p/a).

* Keep cash savings below 6 grand. How you do this is up to you - ipods, ipads, ag, au, ducatis etc

* Live in a decent shared house - say a £1800 p/m 5 bed detached in Cambridge with other young people.

* Under the current system, you would crazily be entitled to up to £50 p/w in subsidies - depending on the cost of your private rental, and under universal credit, 45 according to the entitledto site.

So a total income of about £13k p/a. A grand a month-ish.

I run a car, motorbike, have foreign holidays and eat regular steak on not a lot more than that p/m - and claim none of those subsidies because I was silly enough to try and save for a house early in life.

This is what young people could do. Why not? It's been approved by the state.

A mess. But perhaps the best way to work against the system? And if you go for the pension option, you're being 'prudent' about your future.

Edited by Frugal Git

Share this post


Link to post
Share on other sites

One more thing though

' Over half of our salary goes on just living."

Erm, yeah? If that includes food, shelter and bills, that sounds pretty good. Netflix, amazon prime, cineworld unlimited card subscriptions cost £35 p/m and the occasional isn't going to add much to that. Look on freecycle and gumtree for oodles of second hand electronics passed down from consumerist drones, buy cheap train tickets far in advance and stay in decent backpacker hostels and you can have a pretty decent time on a little over a grand per month.

I rally against ponzi pensions, ponzi housing and everything previous generations have had as much as the next man, but it's not that tough to live well on very little if you opt out of consumer idealism. Or even opt into it, just don't buy new.

Share this post


Link to post
Share on other sites

The plan for young people to play, show the insanity of, and eventually bring down the sorry system.

This person is clearly not claiming the state subsidies they could under the crazy system.

Just did a quick test:

* Work enough to earn personal allowance - 10.6K in your pocket, per year,

- or better still, earn much more, and put everything above that into private pension. Completely discredited for the calculation of benefits as long as it's less than 30k (i.e. you can earn 40k p/a).

* Keep cash savings below 6 grand. How you do this is up to you - ipods, ipads, ag, au, ducatis etc

* Live in a decent shared house - say a £1800 p/m 5 bed detached in Cambridge with other young people.

* Under the current system, you would crazily be entitled to up to £160 p/w in subsidies - depending on the cost of your private rental, and under universal credit, 180 according to the entitledto site.

That, if my maths is correct, is around £360 p/w - or 1400 p/m.

I run a car, motorbike, have foreign holidays and eat regular steak on far less p/m - and claim none of those subsidies because I was silly enough to try and save for a house early in life.

This is what young people could do. Why not? It's been approved by the state.

A mess. But perhaps the best way to work against the system?

I've often wondered how people get all these tax credit things and benefits etc. I used some gov.uk calculator about what I was entitled to and it came back with a big fat zero.

Share this post


Link to post
Share on other sites

I've often wondered how people get all these tax credit things and benefits etc. I used some gov.uk calculator about what I was entitled to and it came back with a big fat zero.

Me too - our mistake is that we're either paid too much, have too much savings in cash or prefer/need to have the cash now rather than the tax relief and a larger pension contribution.

I didn't even mention that things like gym membership, dentistry etc can also become more subsidized if you're a recipient of the the states largess.

The system as it stands offers incredible distortions and opportunities. It requires a very different mindset to the norm to find it, and one that sadly, more reporters fail to, well, report on.

Edited by Frugal Git

Share this post


Link to post
Share on other sites

I bunged in the details for my low paid sprog: a big fat zero (ie as it should be imo). Unless she cuts her hours from 40 to 16 pw - when her take home increases by 20%. Barking.

Share this post


Link to post
Share on other sites

I bunged in the details for my low paid sprog: a big fat zero (ie as it should be imo). Unless she cuts her hours from 40 to 16 pw - when her take home increases by 20%. Barking.

She should pay down most of her income into a salary sacrifice or other pension scheme and claim the benefits, tell her, check out the details

Share this post


Link to post
Share on other sites

I bunged in the details for my low paid sprog: a big fat zero (ie as it should be imo). Unless she cuts her hours from 40 to 16 pw - when her take home increases by 20%. Barking.

I agree - as it should be. But that's the spirit! The calculator is made to show the ridiculousness.

Plus, as I've said - that doesn't begin to describe the additional benefits on other things once you're in receipt of state payments.

Things get *really* interesting when you start to do calculations using family units. I just did one.

Say a family of 4, children under 5, one parent stays at home, other earns 36k - 27k after tax/NI. 3 bed place, renting at a grand p/m. Bedroom entitlement says 2 rooms, but lets try and live like the previous gen in this example.

Not really many entitlements before hand - 2k in child bennies per annum. So 29k total. No pension contribs.

Now...Salary sacrifice 26k of gross into a pension. State now gives 16k p/a all in, on top of the 10k person allowance earnings. New net is 26k.

BUT - you have 26K p/a going into a pension, before empoyers contribution. So you've lost 3k p/a now, and will now be a lifetime allowance pension person probably later.

It really is quite silly, but hey.

Edited by Frugal Git

Share this post


Link to post
Share on other sites

I've never really followed this benefits / tax credits stuff closely as it doesn't affect me, but my partners sister is struggling to make ends meet as a single teacher in London. What options does she have to improve things? Could she - for example - move to supply teaching and do 16 hours a week and claim some sort of benefits? She lives in a shared house.

Share this post


Link to post
Share on other sites

<snip> I didn't even mention that things like gym membership, dentistry etc can also become more subsidized if you're a recipient of the the states largess.<snip>

Free dental treatment, concessions on gym membership (and entertainment tickets etc.) only if you get out-of-work benefits.

WTC, council tax and housing benefits don't get you these advantages.

So the whole "you're better off in work" thing is rowlocks - if you go from being unemployed to being in a low-paid job you lose all those advantages and have to pay the same as those in better-paid jobs.

Share this post


Link to post
Share on other sites

Free dental treatment, concessions on gym membership (and entertainment tickets etc.) only if you get out-of-work benefits.

WTC, council tax and housing benefits don't get you these advantages.

So the whole "you're better off in work" thing is rowlocks - if you go from being unemployed to being in a low-paid job you lose all those advantages and have to pay the same as those in better-paid jobs.

Depends. Universal credit would give you free cover on medical cost inc dentistry until later this year - we'll see what happens after that so if you were in receipt of that rather than the current plethora, you would be fine.

My local gym offers half price membership for anyone who gets housing benefit, so would include workers.

But yes - 'better off in work', especially in terms of pure finances is a complex thing that may yield 'maybe'. Better off working, but working less - even more of a minefield.

Edited by Frugal Git

Share this post


Link to post
Share on other sites

I bunged in the details for my low paid sprog: a big fat zero (ie as it should be imo). Unless she cuts her hours from 40 to 16 pw - when her take home increases by 20%. Barking.

Would it be possible to have the sums? As I find that hard to believe.

Edited by iamnumerate

Share this post


Link to post
Share on other sites

You need kids I ran it a while ago and assumed 3 kids, me working 20 hrs min wage, non working wife. net was 30k plus worth of benefits on top of 9k wages

Can I use other peoples kids

Share this post


Link to post
Share on other sites

For the first four months of our Nipper's life, we qualified for tax credits. Our salaries stayed the same, but the thresholds to claim it changed with the new tax year, so the payments stopped after that time.

Another four months down the line, the wife's maternity leave ended and she didn't return to work. With this major drop in family income levels, I contacted the TC people again. Apparently because our income had changed by more than 10%, we would need to be reassessed the following April, in eight months. It didn't matter that the change in our circumstances was a drop.

We did get them again when that April came round. However a year later, and with a 2% pay rise, we lost all the TC again. They only stopped the payments four months later though and sent us threatening letters because we had been overpaid. The next tax year, I was sent the same TC forms and with a 15% pay rise after taking on a new role, I knew we wouldn't qualify. However, we did and currently now receive all of five pounds a week in TC. Just last week that increased to 11 quid.

In short, I have no idea how the TC system works. Looks very easy to fix though. Will see what we happens when we send the forms through again now the tax year has changed.

Share this post


Link to post
Share on other sites

Would it be possible to have the sums? As I find that hard to believe.

Indeed I may have cocked it up. Go to the entitled to Web site. Try 14k, 40 hrs, renting privately in Portsmouth, council tax band b, 18 years old and no sprogs (or id be a grandfather). Then adjust it to 16 hrs pw.

Share this post


Link to post
Share on other sites

Indeed I may have cocked it up. Go to the entitled to Web site. Try 14k, 40 hrs, renting privately in Portsmouth, council tax band b, 18 years old and no sprogs (or id be a grandfather). Then adjust it to 16 hrs pw.

Funny how someone can put together a website that can work out benefit entitlement, a task that billions of pounds later the DWP have been unable to do with Universal Credit

Share this post


Link to post
Share on other sites

Funny how someone can put together a website that can work out benefit entitlement, a task that billions of pounds later the DWP have been unable to do with Universal Credit

:lol: They never seen them coming they met them half way

Share this post


Link to post
Share on other sites

I've never really followed this benefits / tax credits stuff closely as it doesn't affect me, but my partners sister is struggling to make ends meet as a single teacher in London. What options does she have to improve things?

Try and get a job somewhere else. A teacher's salary here in Devon will comfortably cover her choice of rental or mortgage payments on somewhere perfectly decent.

Share this post


Link to post
Share on other sites

Try and get a job somewhere else. A teacher's salary here in Devon will comfortably cover her choice of rental or mortgage payments on somewhere perfectly decent.

There is something wrong in a system which encourages people working in London to move but not those who don't.

Share this post


Link to post
Share on other sites

For the first four months of our Nipper's life, we qualified for tax credits. Our salaries stayed the same, but the thresholds to claim it changed with the new tax year, so the payments stopped after that time.

Another four months down the line, the wife's maternity leave ended and she didn't return to work. With this major drop in family income levels, I contacted the TC people again. Apparently because our income had changed by more than 10%, we would need to be reassessed the following April, in eight months. It didn't matter that the change in our circumstances was a drop.

We did get them again when that April came round. However a year later, and with a 2% pay rise, we lost all the TC again. They only stopped the payments four months later though and sent us threatening letters because we had been overpaid. The next tax year, I was sent the same TC forms and with a 15% pay rise after taking on a new role, I knew we wouldn't qualify. However, we did and currently now receive all of five pounds a week in TC. Just last week that increased to 11 quid.

In short, I have no idea how the TC system works. Looks very easy to fix though. Will see what we happens when we send the forms through again now the tax year has changed.

To put it in perspective, when 25YM8 sprog 1 popped out in 2008, despite a joint income of around £60,000 we received £40pw in tax credits (due to the new born bonus) dropping to £20pw the following year along with our income, massively, it fell to £40,000 iirc.

The system is/was so ******ed up it defies belief.

Share this post


Link to post
Share on other sites

There is something wrong in a system which encourages people working in London to move but not those who don't.

True. Chronically wrong - happened to me 30 years ago, just as to your friend today. I'm just pointing out the practical solution for the person concerned.

Share this post


Link to post
Share on other sites

True. Chronically wrong - happened to me 30 years ago, just as to your friend today. I'm just pointing out the practical solution for the person concerned.

Thank you all for agreeing with me, I don't think I have ever heard a politician of any party say this. If anyone did I might have to change how I vote.

Share this post


Link to post
Share on other sites

To put it in perspective, when 25YM8 sprog 1 popped out in 2008, despite a joint income of around £60,000 we received £40pw in tax credits (due to the new born bonus) dropping to £20pw the following year along with our income, massively, it fell to £40,000 iirc.

The system is/was so ******ed up it defies belief.

Can't disagree with you there.

Just a bit of historical perspective. 40 years ago my dad was off work for quite a long time for medical reasons. He was pleased that the safety-net kept up his pay, but thought it bizarre that he actually got paid more for being off sick than for working due to (then) paying less tax on that income.

I suspect modern perverse incentives were first introduced with the modern welfare state. They didn't have the experience with which to foresee that, rather than rough edges being ironed out with time, the system would instead grow more monstrous.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   20 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.