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Hpi And The New Real Cost Of Living - Council Tax, Mortgage Payments, Etc.

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Help, please, we're the middle class

Sarah Ebner

As Gordon Brown finishes his Budget sums, a plea from a struggling young family

BY THE TIME you read this Gordon Brown should be putting the finishing touches to his tenth — and possibly last — Budget. I doubt he’s given much thought to the plight of the middle classes, but it’s time that he did; especially if he wants us to vote for him at the next election. In recent years we have been squeezed so much financially it’s become difficult to breathe.

There is an obvious problem with the nation’s finances. Productivity is slowing, while education and the NHS constantly need more money. The problem is twofold. The funds have to come from somewhere (that’s us again) while the inability of public services to keep up with demand leads many to consider private education and healthcare.

School fees of £10,000 a year, per child, mean that private education is out of the question for my own family, though I know my daughter would love to go to the school I attended. In those days lots of middle-class parents scrimped to send their daughters there. It’s now a far more exclusive band of girls that benefits; especially since this Government scrapped the assisted places scheme.

It’s difficult to ask for sympathy, and I’m trying not to whine — compared with most people we’re lucky and privileged. But when it comes to our disposable income, there isn’t much to dispose of.

I can assure you that there are no holidays in the Caribbean — or, indeed, anywhere overseas. We don’t have posh meals (I cook most nights), a wide-screen TV or a DVD player. Along with a number of our friends, we’ve switched from shopping at our nearby Waitrose for a cheaper Tesco that is further away.

And we’re not the only family under financial pressure. Everyone I know feels the same. It’s been a kind of drip, drip effect — an increase in fuel duty here, higher insurance bills (because of raised insurance premium tax) there. Some people are still annoyed by the removal of tax credits on dividends for pension funds and the scrapping of mortgage tax relief. Others are worrying about more expensive utility bills and university fees. All in all there is a depressing feeling that it’s hard to cope, but that no one seems to care (except the rest of the middle class, naturally).

One friend told me that her children no longer do any out-of-school activities, while another said they don’t take their football-mad son to see Spurs any more. Both families simply cannot afford it.

But I am not saying we are all poor. What I am trying to get across is that we are not rich. Whatever Gordon Brown thinks. My mother-in-law agrees with Gordon — maybe it’s a Scottish thing. She owns a lovely flat in suburban Glasgow that is worth about a fifth of our home. Then again, she has no mortgage, while we have recently re-mortgaged. Our term, which was 14 years, has now gone back up to 25. My husband finds this incredibly depressing.

And with stamp duty so high, it’s not feasible for us to move. Where I live, if you need more space, the only option is to build an extension. That is, of course, if you are foolish enough to have more children. These days only the rich seem to have more than two. On top of all this comes Sir Michael Lyons’s council tax review. This makes me shudder because I know what the end result will be — higher bills — and I am unsure how we will pay them. We already pay £1,800 a year to our local council (up 36 per cent from three years ago) and it’s soon to go up again.

Now Sir Michael has said he is studying plans that would see so-called “better-off” households making a “bigger contribution”. To some, it may seem that we are very fortunate since our house has gone up dramatically in value since we bought it six years ago. I don’t think so. As far as I can tell, it means two things: other people such as us can no longer afford to live here and we will soon be liable for even higher council tax bills. I find it remarkable that, within all the accusations (mainly from northern Labour MPs) that we now have more “wealth” because of our house, no one has thought to ask whether it has led to more disposable income. In our case, of course it hasn’t.

Not having any more to spend also means we have none to save. Apparently over the past years there is been a stock market boom. It’s a shame that eating and paying the mortgage got in the way of our potential bonanza. They also got in the way of putting money into a pension. The Government keeps giving warning that this is a big mistake, but like many women, I can barely cover my childcare costs. Finding pension money is impossible.

You probably want to know how much we earn; our joint income takes us — not by much — over the £58,000 limit that the Government uses when assessing tax credits. It sounds like a lot, but perhaps this limit should be reassessed for people who live in London.

A combination of increasing national insurance contributions and pulling people into higher rate tax bands, through not raising them in line with average earnings, has meant that the middle classes are paying a lot more than is fair. For instance, the 40p higher rate band now starts at an income level that is less than 1.4 times average earnings. This compares with 1.6 times in 1996-97. The number of people paying top whack has risen from just over 2 million to 3.5 million people.

The State needs to raise more money and the middle classes seem to be shouldering an unfair burden. So why don’t people who earn £100,000 or more pay a higher rate of tax? Mr Brown, are you listening? Or are you that willing to lose the middle-class vote so as not to upset the very rich?

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this person is certainly middle class. but was a house owner already with some MEWs to service already.

god knows what she would do if she was 28 and about to purchase her first middle class house right now with a bunch of student loans too.

these people know nothing about whats just gone down in housing/finance.

though, it seems like new lab is losing its grasp on the middle class.

i hope we dont now go back to tory as the situation will not change.,

lib dems seem weak. what can we do ? there is no other real options.

the torys will send us into pay back mode and jobs will go and inflation will surge.

crime will rise and the police wont be able to cope this time.

the lack of democracy and choice is now apparent in the world.

how come we get such incompetent people in office under differing colours.

its like that last helicopter on the usa embassy in vietnam in 1973.

the sheen has broken down. wheels off.

and then theres bird flu waiting in the 'wings'.

and terrorist attacks.

and peak oil.

if we could just identify an incoming comet it would all be complete.

muhahahah...

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Help, please, we're the middle class

Sarah Ebner

As Gordon Brown finishes his Budget sums, a plea from a struggling young family

---------------------------------------------------------------------------------------------

The awakening of the middle class in the heretofore "rich Western countries" to the effects of globalization on their personal lives is taking hold. Here is a piece of an article that was written on this very subject with quotes from a true insider, Steve Roach, Chief economist at Morgan Stanley.

It will only get worse...

Begin Quote "The World Economic Forum in Davos, Switzerland, is the cradle of the propaganda that globalization is win-win for all concerned. Free trader Stephen Roach of Morgan Stanley reports that the mood at the recently concluded Davos meeting was different, because the predicted "wins" for the industrialized world have not made an appearance. Roach writes that "job creation and real wages in the mature, industrialized economies have seriously lagged historical norms. It is now commonplace for recoveries in the developed world to be either jobless or wageless--or both." Roach is the first free trade economist to admit that the disruptive technology of the Internet has dashed the globalization hopes. It was supposed to work like this: The first world would lose market share in tradable manufactured goods and make up the job and economic loss with highly-educated knowledge workers. The "win-win" was supposed to be cheaper manufactured goods for the first world and more and better jobs for the third world.

It did not work out this way, Roach writes, because the Internet allowed job outsourcing to quickly migrate from call centers and data processing to the upper end of the value chain, displacing first world employees in "software programming, engineering, design, and the medical profession, as well as a broad array of professionals in the legal, accounting, actuarial, consulting,and financial services industries." This is what I have been writing for years, while the economics profession adopted a position of total denial. The first world gainers from globalization are the corporate executives, who gain millions of dollars in bonuses by arbitraging labor and substituting cheaper foreign labor for first world labor.

For the past decade free market economists have served as apologists for corporate interests that are dismantling the ladders of upward mobility in the US and creating what [economist Charles] McMillion writes is the worst income inequality on record. End Quote

So when can we start to have a real debate about what is going on and its implications for future generations?

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Yes, the middle class is being destroyed throughout the West right now. Today there's the working class, the welfare class, and the government class, in order of wealth: the working class pay most of the taxes which go to the welfare class and government class.

In the long run, of course, such action is suicidal, because it's the growth of the middle class that's maintained relative stability in the UK for the last few decades: they have mortgages to pay and something to lose, so they're reluctant to go out and riot in the streets. Take away any prospect of a decent life, and a few years later they'll be burning down the Houses of Parliament, stringing up politicians on lamp-posts and sticking their heads on spikes across Westminster Bridge..

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Yes, the middle class is being destroyed throughout the West right now. Today there's the working class, the welfare class, and the government class, in order of wealth: the working class pay most of the taxes which go to the welfare class and government class.

In the long run, of course, such action is suicidal, because it's the growth of the middle class that's maintained relative stability in the UK for the last few decades: they have mortgages to pay and something to lose, so they're reluctant to go out and riot in the streets. Take away any prospect of a decent life, and a few years later they'll be burning down the Houses of Parliament, stringing up politicians on lamp-posts and sticking their heads on spikes across Westminster Bridge..

Thats just not very british is is old chap? :P

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Help, please, we're the middle class

Sarah Ebner

As Gordon Brown finishes his Budget sums, a plea from a struggling young family

BY THE TIME you read this Gordon Brown should be putting the finishing touches to his tenth — and possibly last — Budget. I doubt he’s given much thought to the plight of the middle classes, but it’s time that he did; especially if he wants us to vote for him at the next election. In recent years we have been squeezed so much financially it’s become difficult to breathe.

There is an obvious problem with the nation’s finances. Productivity is slowing, while education and the NHS constantly need more money. The problem is twofold. The funds have to come from somewhere (that’s us again) while the inability of public services to keep up with demand leads many to consider private education and healthcare.

School fees of £10,000 a year, per child, mean that private education is out of the question for my own family, though I know my daughter would love to go to the school I attended. In those days lots of middle-class parents scrimped to send their daughters there. It’s now a far more exclusive band of girls that benefits; especially since this Government scrapped the assisted places scheme.

It’s difficult to ask for sympathy, and I’m trying not to whine — compared with most people we’re lucky and privileged. But when it comes to our disposable income, there isn’t much to dispose of.

I can assure you that there are no holidays in the Caribbean — or, indeed, anywhere overseas. We don’t have posh meals (I cook most nights), a wide-screen TV or a DVD player. Along with a number of our friends, we’ve switched from shopping at our nearby Waitrose for a cheaper Tesco that is further away.

And we’re not the only family under financial pressure. Everyone I know feels the same. It’s been a kind of drip, drip effect — an increase in fuel duty here, higher insurance bills (because of raised insurance premium tax) there. Some people are still annoyed by the removal of tax credits on dividends for pension funds and the scrapping of mortgage tax relief. Others are worrying about more expensive utility bills and university fees. All in all there is a depressing feeling that it’s hard to cope, but that no one seems to care (except the rest of the middle class, naturally).

One friend told me that her children no longer do any out-of-school activities, while another said they don’t take their football-mad son to see Spurs any more. Both families simply cannot afford it.

But I am not saying we are all poor. What I am trying to get across is that we are not rich. Whatever Gordon Brown thinks. My mother-in-law agrees with Gordon — maybe it’s a Scottish thing. She owns a lovely flat in suburban Glasgow that is worth about a fifth of our home. Then again, she has no mortgage, while we have recently re-mortgaged. Our term, which was 14 years, has now gone back up to 25. My husband finds this incredibly depressing.

And with stamp duty so high, it’s not feasible for us to move. Where I live, if you need more space, the only option is to build an extension. That is, of course, if you are foolish enough to have more children. These days only the rich seem to have more than two. On top of all this comes Sir Michael Lyons’s council tax review. This makes me shudder because I know what the end result will be — higher bills — and I am unsure how we will pay them. We already pay £1,800 a year to our local council (up 36 per cent from three years ago) and it’s soon to go up again.

Now Sir Michael has said he is studying plans that would see so-called “better-off” households making a “bigger contribution”. To some, it may seem that we are very fortunate since our house has gone up dramatically in value since we bought it six years ago. I don’t think so. As far as I can tell, it means two things: other people such as us can no longer afford to live here and we will soon be liable for even higher council tax bills. I find it remarkable that, within all the accusations (mainly from northern Labour MPs) that we now have more “wealth” because of our house, no one has thought to ask whether it has led to more disposable income. In our case, of course it hasn’t.

Not having any more to spend also means we have none to save. Apparently over the past years there is been a stock market boom. It’s a shame that eating and paying the mortgage got in the way of our potential bonanza. They also got in the way of putting money into a pension. The Government keeps giving warning that this is a big mistake, but like many women, I can barely cover my childcare costs. Finding pension money is impossible.

You probably want to know how much we earn; our joint income takes us — not by much — over the £58,000 limit that the Government uses when assessing tax credits. It sounds like a lot, but perhaps this limit should be reassessed for people who live in London.

A combination of increasing national insurance contributions and pulling people into higher rate tax bands, through not raising them in line with average earnings, has meant that the middle classes are paying a lot more than is fair. For instance, the 40p higher rate band now starts at an income level that is less than 1.4 times average earnings. This compares with 1.6 times in 1996-97. The number of people paying top whack has risen from just over 2 million to 3.5 million people.

The State needs to raise more money and the middle classes seem to be shouldering an unfair burden. So why don’t people who earn £100,000 or more pay a higher rate of tax? Mr Brown, are you listening? Or are you that willing to lose the middle-class vote so as not to upset the very rich?

Joint income of MORE than £58,000(!) in two tax allowances and no holidays abroad. Child benefit?

Show us the books Sarah, before telling us that you deserve tax credits as well!

Council tax here is now £850 in Band A.

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this person is certainly middle class. but was a house owner already with some MEWs to service already.

god knows what she would do if she was 28 and about to purchase her first middle class house right now with a bunch of student loans too.

I read about 2 thirds of the article and just thought "f*ck off". for the points you've highlighted about. I dont like letters like that in the press because its a hell of alot worse than that for some people. 10K school fees, well 10K is actually more than the net pay of some folks, so who cares if its out of reach.

Ive no sympathy for the likes of that person, ok i havnt got sympathy for anyone really but even less for the likes of them, they have to shop at tesco's well oh f*ckin didums.

Atleast they have remortgaged with another 25 year term, as a friend of mine says "that will learn um".

Edited by theChuz

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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