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News Report Page 11 of 18
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Home ownership now little more than a pipe dream for public sector workers in the North West

OWNING a home has become virtually impossible for many public sector workers within the North West, according to research published by UNISON. Getting a deposit together and obtaining a mortgage are often insurmountable hurdles for those living in the majority of Local Authority areas across:- England, Scotland and Wales, according to the findings.

The UNISON report Priced Out highlights how saving the money for a down payment on a property could take decades. This is based on 1st time buyers saving ₤100 every month for a deposit.

The research focused on the salaries for employees in 5 jobs; an NHS Cleaner, Teaching Assistant, Librarian, Nurse and Police Community Support Officer (PCSO). It calculated what multiple of their annual income they would need to borrow for a mortgage once they had paid a deposit.

It would take 17 years in the North West for public sector workers wanting to buy for the 1st time to save the necessary deposit. Trafford is the most expensive Local Authority area. It would take someone here 29 years to save for a deposit.

Priced Out shows that across the North West an NHS Cleaner earning ₤17,460 a year would need to borrow on average 6.5 times their salary to secure a mortgage for a first-time buyer property. A teaching assistant earning ₤19,446 a year would need to apply to borrow nearly 6 times their annual wage. A Nurse earning ₤23,023 a year, a PCSO on ₤23,346, and a Librarian earning ₤23,866 would each need to borrow nearly 5 times their pay.

Given that the Bank of England's maximum recommended lending limit is 4.5 times a person's salary, Priced Out shows that a mortgage is completely unattainable for a Cleaner in nearly all, but 3 (Hyndburn, Pendle and Burnley) of the 39 Local Authority areas in the North West. A mortgage would be completely out of reach for Teaching Assistants in all, but 6 areas, says the report. Nurses, PCSOs and Librarians, would be refused mortgages in more than ½ of the Local Authority areas.

The report shows that the national housing outlook is bleak, with house prices predicted to grow faster than wages until at least 2022.

Priced Out follows on from the UNISON report Nothing Going on But the Rent, published in June 2018, which highlighted the high cost of renting for public sector workers in England. The report found that average rents were unaffordable in many regions, especially for people working in lower paid jobs such as Hospital Porters and Teaching Assistants.

Commenting on the report, UNISON North West Regional Secretary, Kevan Nelson said:- "Owning a home is now little more than a pipe dream for most public sector workers. Deposits and mortgages are quite simply way out of reach, while the spiralling cost of renting is eating up a growing proportion of the take home pay of working people across Britain. Wage rises haven't kept pace with soaring house prices and rents, and the situation looks set to worsen. The struggle for housing cuts across generations, jobs and regions. Employees are being forced to work further away from their jobs, and young people cannot afford to move out of the family home. The Government has had more wake up calls over the growing housing crisis than hot dinners. Decisive, creative and responsible action is needed now."

Do you agree with UNISON on this issue or do you have any other views on this topic?  Please email your thoughts and views to:- News24@SouthportReporter.Com and let us know what you really think.

UK Government abandons plans to abolish Class 2 National Insurance Contributions for the self employed

AFTER the UK Government announced that its abandoning plans to abolish Class 2 National Insurance Contributions for the self employed, campaigners have said the whole area of national insurance needs a comprehensive review.

The Government said they have abandoned the reform; which had been due to take effect from April 2019; due to the negative impacts it could have on some of the lowest earners and the fact that any options identified to mitigate this would, in their view, introduce greater complexity to the tax system when the initial objective of the Policy was to simplify the system.

In response to this announcement the 'Chartered Institute of Taxation' (CIOT), who run an initiative called the:- 'Low Incomes Tax Reform Group' (LITRG) issued a very interesting statement to the media.

Anne Fairpo, Chair of the LITRG, said:- "National insurance is a hugely complex area. What at 1st must have appeared a straightforward change, the Government ran into unintended consequences and have now decided to abandon it entirely. Since the Government announced their intention to abolish Class 2 NIC and amend Class 4 NIC, LITRG has been raising concerns about the lowest earners. Those with profits below the small profits threshold (currently ₤6,205) who want to build up an entitlement to contributory benefits such as the state retirement pension would have had to pay Class 3 contributions under the proposals, which are five times as much as current Class 2 contributions. Although we had concerns about the original proposals, we fully recognised that they would benefit some people and that is why we put forward a number of practical suggestions that could have addressed the negative impact on the lowest earners; for example by introducing a new lower rate of Class 3 for the self employed. Whilst we agree that making the tax system more complex is not desirable, we do think the benefits gained may have outweighed any additional complexity. Although this announcement now means that Class 2 will remain, at least for the remainder of this Parliament, the Government have stated they will keep this issue under review. This is welcome. Public understanding of NI is low as is evidenced by the LITRG websites; we receive many queries about it and we do need to keep looking for ways to make it much simpler to manage. There are also wider changes that NI needs to adapt to. Given the significant changes in people's working patterns including the increase in zero hour contracts, holding more than one employment at a time or being employed and self-employed at the same time, we would like to see the whole system of national insurance reconsidered rather than tinkering and piecemeal changes. This is especially important given the ever increasing numbers of self employed workers."

Since the LITRG has aimed at giving a voice to the unrepresented and has been working to improve the Policy and processes of the:- Tax, Tax Credits and associated welfare systems, for the benefit of those on low incomes, since 1998, so what they say should not come as any surprise.

Do you agree?  Please email your thoughts and views to:- News24@SouthportReporter.Com and let us know what you really think about the UK Tax System and it's benefit systems.

Fact file... The self employed currently pay 2 types of NI contributions, depending on their profits. They pay Class 2 contributions of ₤2.95 per week if their annual profits exceed ₤6,205 and they also pay Class 4 NI at the rate of 9% on profits above ₤8,424. Once profits reach ₤46,350, Class 4 NI contributions fall to 2% on the excess profits. Class 2 contributions may also be paid voluntarily by self employed people who earn less than the threshold and many choose to do so as it gives them rights to various state benefits, most notably the state pension. The Government had planned to abolish Class 2 NI and instead change the rate and threshold for paying Class 4 NI. Those Class 4 contributions paid or credited would then count towards state benefits. Unfortunately, under the proposals, Class 4 contributions could not be paid voluntarily and the lowest earning self employed person would instead have had to pay Class 3 NI contributions at the rate of ₤14.65 per week (compared to Class 2 at ₤2.95 a week) if they wanted to maintain rights to certain state benefits including the state pension...

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