The Salary Calculator

Budget 2012 update

by Admin

Today, the Chancellor gave his annual budget speech in the House of Commons, outlining government spending plans for the next couple of years. The details of income tax and National Insurance from 6th April 2012 had already been provided, so as I have explained in a previous post, The Salary Calculator is up to date with the latest tax information.

However, the Chancellor took the opportunity to outline plans for income tax from April 2013, and there will be a few changes. Firstly, the under-65 tax free allowance will be increased from April 2013 to £9,205,  in line with the coalition pledge to increase the tax-free personal allowance to £10,000 before the next election. This is an increase of £1,100 on the April 2012 value, saving those on low and middle incomes up to £220 per year. However, the increased personal allowances currently available to those over 65 will be frozen and, for those not yet receiving the increased allowances, replaced by a single allowance for all ages (although this change will not take immediate effect).

Another change in 2013 will be to reduce the top rate of income tax, paid by those earning over £150,000 per year, from 50% to 45%. The 50% rate was introduced by the Labour government, where previously such income would have been taxed at 40%. This will be popular with traditional Tory voters but Labour are complaining that the richest are getting tax cuts in this time of austerity.

The Salary Calculator will be updated with the April 2013 values nearer the time – in the meantime, you can see what the April 2012 changes will make to your pocket each month by checking The Salary Calculator 2012. There is also a comparison utility so you can easily see the difference between 2011 and 2012.

Tags: 50% tax, April 2012, April 2013, Economy, HMRC, income tax, national insurance, Pay As You Earn, personal allowance, tax rates, The Salary Calculator

2012 Budget approaches

by Admin

Next week, Chancellor George Osborne will give his budget speech, announcing his plans for taxation and spending for the next 12 months. In the 2012 budget, he is expected to announce measures to help business growth in Britain, such as easier or lower-cost business loans. There will also be plans to increase some taxes, but likely only on the wealthiest in the country. How well this is likely to go down with traditional Tory voters remains to be seen.

All of us will be affected by changes to income tax and National Insurance following his budget speech – as reported in a previous blog post, The Salary Calculator has been updated with the latest budget information to show you how your take home pay will change next month. Get started with The Salary Calculator for the April 2012 budget.

Tags: April 2012, Economy, HMRC, income tax, national insurance, tax rates, The Salary Calculator

Why under employment bumps up insurance costs

by Admin

[Guest Post]

Unemployment in the UK has edged closer to the three million mark, and is at its highest level since 1996. As well as not having a regular source of income, unemployed drivers are more likely to be hit by higher payments for car insurance. Motorists who are out work are being advised to shop around for better deals on websites such as moneysupermarket.

An investigation carried out by the BBC revealed that car owners without a job are, on average, paying around 30% more for their insurance than motorists with full-time jobs, while their premiums are potentially 63% higher. There are a few reasons why unemployed drivers are seen as risky by some insurers.

Peter Harrison, an expert on motor insurance from MoneySupermarket explained why: “This is partly because unemployed people are more likely to use their cars during the day and to drive up and down unfamiliar routes to a job interview. Also, some insurers perceive a drop in financial security as a result of losing a job means someone in that situation is more likely to make a claim, hence the rise in the price of premiums”.

When out of work, your car is vital in helping you find a new job, but the impact of losing income means you might struggle to keep up with payments on credit cards and mortgages, which could hit your credit rating. A poor credit rating could also impact upon the price of car insurance. This is why it pays to look for the best deal possible.

With the help of a price comparison site like MoneySupermarket, you can find a car insurance deal which can save you much-needed cash, but there are other ways to help you keep the cost down at a time when you need to tighten your belt. Getting a new quote could save money, as it could go down every year (£2.4bn is wasted by motorists by accepting renewal quotes). Adding someone with more driving experience to your policy could also drive the cost down.

Reducing your mileage could prove helpful. As well as saving on fuel costs, your insurer could take notice and slash the cost of your policy. Keeping in touch with the insurer about your current circumstances is also a good way to save money. Telling them about losing your job as soon as possible is important, as failing to do so could invalidate your insurance.

Tags: car insurance, Economy, guest post, Insurance, unemployment

Visualisation of large financial numbers

by Admin

The well-known web comic xkcd has created a very detailed visualisation of what the large financial numbers, like millions and billions, actually mean. It’s sometimes difficult to comprehend exactly what it means when newsreaders mention a debt of £1 billion.

This visualisation is rather US-centric, but much of the information displayed is valuable for those of us on this side of the Atlantic. It starts with individual dollars, then compounds them to thousands (shrinking the scale). Continuing on to millions, billions and finally trillions, it gives a clear indication of just how much money we’re talking about. Check out the diagram here: http://xkcd.com/980/huge/ (you will need to zoom in!).

Tags: billions, dollar, economics, Economy, GDP, millions, trillions

Rocky road to financial recovery

by Admin

Although the UK entered recession as long ago as the second half of 2008 and officially exited recession at the end of 2009, a full recovery still seems a long way off. This week was one of mixed messages – some good and some bad.

First came the bad news that the Consumer Price Index (CPI) had increased from 4% to 4.5% in April. The CPI is used to measure inflation in the UK and to compare it with the government’s target of 2%. A low level of inflation (like 2%) is a sign of a healthy economy, but higher rates usually mean that the costs of goods and services are increasing faster than workers’ wages, leading to a lower standard of living. For those of us already finding it hard to make ends meet, this is obviously bad news.

On the flip side, however, there was news that unemployment fell in the first quarter of this year. The decrease was only slight, to 7.7% from 7.8% the previous quarter, but it is a promising sign – as is the fact that the number of people in employment has increased to 29.24 million, just short of the pre-recession peak of 29.57 million.

What does all of this mean? Well unfortunately, these numbers are just a small part of the complex system that makes up the British economy and predicting what will happen next is astonishingly difficult – as no doubt you’ve noticed in the past few years. However, it seems that the economy is continuing on its long, slow recovery from the greatest recession in living memory. The recovery appears to be fragile – which is one of the reasons that the Bank of England has left its base rate at 0.5% for the 26th month in a row. You know what they say – slow and steady wins the race!

Tags: careers, Economy, inflation, recession, recovery, unemployment