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You can find the current article at its original source at https://www.theguardian.com/money/2018/oct/30/budget-impact-families-single-people
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| Version 2 | Version 3 |
|---|---|
| From single parents to landlords: how will the budget affect people? | From single parents to landlords: how will the budget affect people? |
| (35 minutes later) | |
| The single parent mother | The single parent mother |
| For Lidia Peto, who had to temporarily give up work to care for her daughter’s special needs, the roll out of universal credit is what has given her most financial anxiety. | For Lidia Peto, who had to temporarily give up work to care for her daughter’s special needs, the roll out of universal credit is what has given her most financial anxiety. |
| The chancellor said he will put extra money into funding the shift to universal credit, which should have the effect of claimants being able to earn about £1,000 more before their benefits are slashed. | The chancellor said he will put extra money into funding the shift to universal credit, which should have the effect of claimants being able to earn about £1,000 more before their benefits are slashed. |
| Lidia has worked as a kitchen assistant and receptionist, but hopes to return to work as a personal trainer. She receives housing benefit on her £800-a-month rent, plus income support and disability living allowance adding up to another £400 a month, plus a small amount of carer’s allowance. | Lidia has worked as a kitchen assistant and receptionist, but hopes to return to work as a personal trainer. She receives housing benefit on her £800-a-month rent, plus income support and disability living allowance adding up to another £400 a month, plus a small amount of carer’s allowance. |
| “I’ve not yet moved to universal credit, and I don’t know for sure what the impact will be. But I’ve done some calculations and I think it will be less. In fact, it could be quite a lot less, and that will have a massive impact. It may mean we have to move somewhere a lot smaller,” she says. | “I’ve not yet moved to universal credit, and I don’t know for sure what the impact will be. But I’ve done some calculations and I think it will be less. In fact, it could be quite a lot less, and that will have a massive impact. It may mean we have to move somewhere a lot smaller,” she says. |
| “My personal budget is at breakeven – or worse – every month. It’s a vicious cycle of using credit cards and having to watch every single penny, and I just don’t think Monday’s announcements will change that.” | “My personal budget is at breakeven – or worse – every month. It’s a vicious cycle of using credit cards and having to watch every single penny, and I just don’t think Monday’s announcements will change that.” |
| The higher-rate taxpayer | The higher-rate taxpayer |
| Hunter Ruthven, 31, works for an agency that seeks to improve productivity among small UK businesses. He is a higher rate taxpayer, so will gain about £520 from the higher personal allowances beginning in April 2019. | Hunter Ruthven, 31, works for an agency that seeks to improve productivity among small UK businesses. He is a higher rate taxpayer, so will gain about £520 from the higher personal allowances beginning in April 2019. |
| “Every little helps, I suppose. Will it make a huge difference? No, as I suppose I’m lucky enough to have got to the point where I don’t have to count every penny. I will probably look at increasing the amount I put into my pension every month.” | “Every little helps, I suppose. Will it make a huge difference? No, as I suppose I’m lucky enough to have got to the point where I don’t have to count every penny. I will probably look at increasing the amount I put into my pension every month.” |
| “I don’t have a personal issue with the amount of tax I have to pay. I’m happy as a higher earner that I’m paying a higher rate of tax. For me it’s more about the general cost of living.” | “I don’t have a personal issue with the amount of tax I have to pay. I’m happy as a higher earner that I’m paying a higher rate of tax. For me it’s more about the general cost of living.” |
| Despite enjoying a good income, saving for a deposit on a home in London has been a struggle. | Despite enjoying a good income, saving for a deposit on a home in London has been a struggle. |
| “I’m not delusional in thinking that there is something that can be done to suddenly make property affordable. But I would have liked to see more help for first time buyers to save. I put money into my cash Isa, but low interest rates mean it doesn’t climb much. And my equity Isa is down 8% this year. There are few incentives to save money.” | “I’m not delusional in thinking that there is something that can be done to suddenly make property affordable. But I would have liked to see more help for first time buyers to save. I put money into my cash Isa, but low interest rates mean it doesn’t climb much. And my equity Isa is down 8% this year. There are few incentives to save money.” |
| Does he feel hard done by compared to preceding generations? “My parents were able to buy a flat in Highgate in the 1980s for £38,000. But I’m a pragmatist about these things. That said, I have a lot of friends who feel quite a lot of animosity about this. But I don’t think there’s a magic wand.” | Does he feel hard done by compared to preceding generations? “My parents were able to buy a flat in Highgate in the 1980s for £38,000. But I’m a pragmatist about these things. That said, I have a lot of friends who feel quite a lot of animosity about this. But I don’t think there’s a magic wand.” |
| The pensioner | The pensioner |
| Sarah Hosking, 78, says she normally watches the budget to find out what is happening with pensions, the winter fuel allowance, VAT and so on – but this time she feels Brexit has made the announcements and forecasts largely irrelevant. | Sarah Hosking, 78, says she normally watches the budget to find out what is happening with pensions, the winter fuel allowance, VAT and so on – but this time she feels Brexit has made the announcements and forecasts largely irrelevant. |
| “The uncertainty caused by Brexit is so profound ... I honestly think this is arranging the deckchairs on the Titanic.” | “The uncertainty caused by Brexit is so profound ... I honestly think this is arranging the deckchairs on the Titanic.” |
| Hosking lives near Stratford-upon-Avon, Warwickshire, and manages on an income of £19,000 a year. She is the founder-secretary of Hosking Houses Trust, a charity that gives bursaries and residencies to women writers over the age of 40. | Hosking lives near Stratford-upon-Avon, Warwickshire, and manages on an income of £19,000 a year. She is the founder-secretary of Hosking Houses Trust, a charity that gives bursaries and residencies to women writers over the age of 40. |
| There was little in the budget that directly related to older people’s finances - the word “pensioner” did not feature in the chancellor’s speech. However, many will have been relieved that he did not meddle with the state pension “triple lock”, which guarantees that the payment will rise by a minimum of either 2.5%, the rate of inflation or average earnings growth, whichever is largest. It was confirmed earlier this month that the basic state pension will rise by 2.6%, so the new figure is likely to be £129.25 a week - up from the current £125.95. | There was little in the budget that directly related to older people’s finances - the word “pensioner” did not feature in the chancellor’s speech. However, many will have been relieved that he did not meddle with the state pension “triple lock”, which guarantees that the payment will rise by a minimum of either 2.5%, the rate of inflation or average earnings growth, whichever is largest. It was confirmed earlier this month that the basic state pension will rise by 2.6%, so the new figure is likely to be £129.25 a week - up from the current £125.95. |
| Hosking says of budget financial measures relating to pensioners: “There seemed to be no change.” | Hosking says of budget financial measures relating to pensioners: “There seemed to be no change.” |
| Overall she was not impressed with Philip Hammond’s budget: “The big issues are our relationship with Europe and climate change. One is uncertain and the other is largely ignored.”Hosking says that living in a “theatre town” – the Royal Shakespeare Company is based in Stratford-upon-Avon – she is very worried about what Brexit will mean for the arts. | Overall she was not impressed with Philip Hammond’s budget: “The big issues are our relationship with Europe and climate change. One is uncertain and the other is largely ignored.”Hosking says that living in a “theatre town” – the Royal Shakespeare Company is based in Stratford-upon-Avon – she is very worried about what Brexit will mean for the arts. |
| The new home buyers | The new home buyers |
| Steven Champion and Claire Lockey are pleased the chancellor has extended by two year the help-to-buy scheme that recently helped them purchase their first £366,000 London home, but they fear for others stuck renting in the capital. | Steven Champion and Claire Lockey are pleased the chancellor has extended by two year the help-to-buy scheme that recently helped them purchase their first £366,000 London home, but they fear for others stuck renting in the capital. |
| Champion, 37, who works in financial education and social worker Lockey, 30 , recently become first-time buyers of a two-bed flat in Barking with some deposit help from family – and by using the help-to-buy equity scheme and help-to-buy Isa. | Champion, 37, who works in financial education and social worker Lockey, 30 , recently become first-time buyers of a two-bed flat in Barking with some deposit help from family – and by using the help-to-buy equity scheme and help-to-buy Isa. |
| “The help-to-buy scheme has selfishly helped us, but we fear for others renting in London. It’s fair to say that had it been scrapped, it would have proved impossible for us to buy in London. Ultimately, a bigger solution to the London housing crises is needed,” says Champion. | “The help-to-buy scheme has selfishly helped us, but we fear for others renting in London. It’s fair to say that had it been scrapped, it would have proved impossible for us to buy in London. Ultimately, a bigger solution to the London housing crises is needed,” says Champion. |
| Lockey agrees: “Even as public servants in key roles we simply don’t earn enough to be able to save the way lots of our friends working in the private sector can! Help To Buy was really the only way we could get on the ladder on London. Like others we would have been forced out of the capital.” | Lockey agrees: “Even as public servants in key roles we simply don’t earn enough to be able to save the way lots of our friends working in the private sector can! Help To Buy was really the only way we could get on the ladder on London. Like others we would have been forced out of the capital.” |
| Both of them had been renting since the age of 18, with Lockey even doing a stint as a property guardian when she first moved to London to save money on rent. | Both of them had been renting since the age of 18, with Lockey even doing a stint as a property guardian when she first moved to London to save money on rent. |
| The pair used online mortgage broker Habito to find their £200,000 mortgage. The government provided an equity loan of £146,400 – which is interest-free for the first five years. | The pair used online mortgage broker Habito to find their £200,000 mortgage. The government provided an equity loan of £146,400 – which is interest-free for the first five years. |
| They say they move has allowed them to swap a flat costing £1,150 to rent to a bigger partially owned home costing £865/month in mortgage payments. | They say they move has allowed them to swap a flat costing £1,150 to rent to a bigger partially owned home costing £865/month in mortgage payments. |
| The landlord with 25 properties | The landlord with 25 properties |
| John Socha, 60, says the budget is “another turn in the screw” for landlords. In a little-noticed move in the budget, landlords will no longer be able to claim the £40,000 lettings relief on their capital gains tax (CGT) bill when they sell a property. | John Socha, 60, says the budget is “another turn in the screw” for landlords. In a little-noticed move in the budget, landlords will no longer be able to claim the £40,000 lettings relief on their capital gains tax (CGT) bill when they sell a property. |
| “I think there’s someone in the Treasury who really, really hates landlords,” says Socha, who has 25 properties mostly around Northamptonshire. | “I think there’s someone in the Treasury who really, really hates landlords,” says Socha, who has 25 properties mostly around Northamptonshire. |
| “The new tax regime on buy to let is madness. In any other business you are able to write your costs off against your income, but you can’t do this with mortgages any longer.” | “The new tax regime on buy to let is madness. In any other business you are able to write your costs off against your income, but you can’t do this with mortgages any longer.” |
| He reckons that many other landlords will ‘incorporate’ their portfolios to mitigate the impact of the additional CGT. He says CGT is a huge issue for landlords, particularly those who want to sell out because of the earlier tax rises introduced by George Osborne in 2015. If they keep their properties, the tax rises may make running them unprofitable, but if they sell they will be hit by a big CGT bill. | He reckons that many other landlords will ‘incorporate’ their portfolios to mitigate the impact of the additional CGT. He says CGT is a huge issue for landlords, particularly those who want to sell out because of the earlier tax rises introduced by George Osborne in 2015. If they keep their properties, the tax rises may make running them unprofitable, but if they sell they will be hit by a big CGT bill. |
| “Some buy to let landlords have started to pull out because of the tax changes. But I’m buying more, and I’ve also started building. The thing about selling out is the CGT you have to pay. There was some talk before the budget about reducing CGT if you sell to your tenant, and that would have been a good idea.” | “Some buy to let landlords have started to pull out because of the tax changes. But I’m buying more, and I’ve also started building. The thing about selling out is the CGT you have to pay. There was some talk before the budget about reducing CGT if you sell to your tenant, and that would have been a good idea.” |
| Scoha was 38 when he bought his first buy-to-let, an ex-council two-bed semi for £15,000, selling it later for £85,000. “ I like to think of myself as a good landlord; we properly decorate all the flats and houses and everything is legally compliant. I try not to put up rents too much, I’d rather keep a good tenant. | Scoha was 38 when he bought his first buy-to-let, an ex-council two-bed semi for £15,000, selling it later for £85,000. “ I like to think of myself as a good landlord; we properly decorate all the flats and houses and everything is legally compliant. I try not to put up rents too much, I’d rather keep a good tenant. |
| “Most of my one-beds are on a rent of around £550 to 650 a month. It can be four years before I put the rent up. A quality tenant is worth far more than a rent rise. The total value of the properties is around £3m but to be honest I don’t really look at that. I look at the revenue stream, which is around £162,000 a year from rents. I’ve fixed all my mortgages for 20 years at a rate of just below 4%. I know that will strike some people as high but I remember when rates were 15%, and if they were to rise a long way above 4% I’d be destroyed.” | “Most of my one-beds are on a rent of around £550 to 650 a month. It can be four years before I put the rent up. A quality tenant is worth far more than a rent rise. The total value of the properties is around £3m but to be honest I don’t really look at that. I look at the revenue stream, which is around £162,000 a year from rents. I’ve fixed all my mortgages for 20 years at a rate of just below 4%. I know that will strike some people as high but I remember when rates were 15%, and if they were to rise a long way above 4% I’d be destroyed.” |
| • This article was amended on 1 November 2018 to remove a personal detail. | |
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| Buying to let | Buying to let |
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