I spent this morning trying to understand if HM Revenue and Customs have worked out my income tax correctly, it seems rather a lot. I did my self assessment on line last month and I have the statement, I have to pay some money by the end of January. Luckily my friend Carol was able to give me some guidance, because this sort of thing is her job.
So, the sums are, state pension plus small private pension, less the personal allowance of £6475 (the rate for 2010 - 2011), less £210 tax already paid on the private pension, and 20% of what's left is the amount I have to pay.
They talk about pensioners having to continue working or going back to work to make a decent living. This would probably be a good idea if you were on a much reduced pension, and could top it up with a part time job. If your pension is really low all you do is claim every benefit you can which will top it up. Because my income is slightly more than the tax allowance, if I went back to work I would be paying 20% of everything I earn.
The personal allowance for 2011 - 2012 goes up to £7475, so if my pension hasn't gone up by much this year, I should not have to pay as much tax next year. In fact I could probably work it out now because I know what my income will be in this tax year, I won't bother though, I'll wait till next January.
When I rang HM Revenue and Customs up to querie my account I did get a bit of good news. When I reach age 65 I won't have to pay income tax, whooopeeee, can't wait ;o)
Another bill landed on my doormat this week, car insurance. My broker has managed to find me a company with a more competitive premium, £54 less than last year, so I'll go with that. On top of that I've just paid the car road tax, £165. In December it was gas, electricity, and water to pay. It's all flippin bills at the moment. The winter fuel allowance of £200 was a help, but it's not going to be used for soley for that, my gas bill is not expected to be very much at all.
Oh well, the scrimping continues, there's no let up. If I want to have my cheapo mini holidays the money will have to come from somewhere, and that is my day to day living. Cutting back on everything, and accounting for every penny. Doing without. No heating. One bath every fortnight, washing in a kettle of water in between. Shopping at night for the reductions. Cherry picking at all the shops for the best prices. Growing my own. No new clothes, I can manage with what I've got. No buying food out, take it with me. Using the bus pass, or walk, or cycle, whenever I can. It's a good job I don't mind my own company, I can't afford to socialise.
I'll do a bit of tidying in the garden, the brown bin gets collected tomorrow.
Toodle pip.
What you may be lacking moneywise you make up with a wealth of common sense, fun and pure enjoyment of life. You are richer in all these qualities and still managed to enjoy your frugal life. Go Ilona. Sally.
ReplyDeleteWell said, we don't need to be materialistic. Your garden is looking lovely.
ReplyDeleteI totally agree with the first comment!
ReplyDeleteSally did indeed say it all, but every once in a while do you not wish you could have a little splurge?
ReplyDeleteGill in Canada
We have to do whatever we can do to get by. I loked into a tax free savings account but if we take from it we have to put back into it within one year, for it to be tax free...not worth it for us. If I need the money, I can't afford to put it back.....plain and simple.
ReplyDeleteJane x
Interesting. I won't be paying any taxes this year, I will actually get back more than I paid in. I have no idea why it works that way here, I am just glad it does. I go to pay our car insurance tomorrow. It is $57 a month (5 months then I get one month free) for the two cars we have. We haven't taken a mini holiday in years. I seldom get new clothes and we almost never go out to eat anymore. If I am going to splurge and get something it is usually something useful that I have been wanting and will make my life easier.
ReplyDeleteI thought you'd made a mistake with the allowance for a moment then I remembered that you are younger that I. I don't pay tax and there is a form that I have, to apply to have your savings interest repaid to you, not that there is much interest paid on savings at the moment.
ReplyDeleteYou are an inspiration, Ilona!! I've just applied to go to look at an AMAZING sounding PhD in Nottingham, so now I've got to cut back big time to scrimp the funds together to get there!
ReplyDeleteI live the same life you do, except for the bath and walking. I must bathe more often to feel human. Right now,
ReplyDeleteI cannot get up from sitting in the tub, so I stand in the tub and take the hand shower thing from the tub faucet and shower off with that. However, there is a minimum charge for a certain amount of water. I only use half of the amount I could.
This town is not walkable. But, I can barely walk to hens or to car or to store from car.
Right now, my roof is splitting into two sections. So, soon I will need a home. THAT is going to be interesting!
Do you ever do surveys online? I do a few piddling things to bring in a few, very few, dollars each month. If you contact me through my email on my site, I will recommend you to the company I work for. I would be glad to give you the site, but they only take recommendations. Don't ask me why because I don't know.
Do you get any tax deductions for the food you purchase for the cats? There ought to be a way. Maybe you have that covered.
Hi Ilona, I have just about managed to catch up on most of your blogs - it gave me wonderful "free" entertainment over the weekend, much better than watching the telly! The best lightbulb moment I ever had is being aware that I am blissfully happy with my own company! It's a very liberating feeling. Don't get me wrong, I like to socialise but when I can't my world is still a perfectly content one.
ReplyDeleteAnd those pesky bill do have the habit of coming all at once! Keep thinking of your next holiday! Debs x
Cats are like evil scientists,they don't want to push you off your chair but how else are they to take advantage of the residual heat.
ReplyDeleteIlona - please don't get too excited about not paying tax when you are 65. It may be that your state and private pension leave you under the tax allowance limit but if your income is over the limit you will still have to pay tax. Sorry :(
ReplyDeleteA few years ago I was told I owed the tax £500 due to Unilever not taking enough from me from my very small pension I had with them. I got my husband's accountant to plead poverty to them but I still had to pay it, by my tax code. The fact was, they made a mistake! If I had made a mistake they would have been on my like a ton of bricks.
ReplyDeleteA few weeks ago they sent me a cheque for £88 - something to do with the same period, which is years ago.
I didn't know you didn't pay tax over 65? I pay it still and I'm 68 at the end of this month. Must look into that one.
I cant really add any comments about the tax situation but want to say your garden looks LOVELY.
ReplyDeleteHi I just want to tell you what I have found out. Over 65 yrs old the allowance goes up to just over £10,000 which I am on now, getting the minimum Gov pension, and a small company pension. You should be ok and tax free if your income falls below that.
ReplyDeletePat x
Hi Ilona, it makes me sick that we can't manage to pay enough of a pension in this country to keep people who've worked all their lives from having to choose between heating and eating or eating and socializing. All of these are essential components for a healthy and reasonably comfortable life, they're not luxuries - not even socializing as it's been shown that having a wide circle of friends reduced the likelihood of dementia in older age.
ReplyDeleteYour garden puts mine to shame, you've inspired me to get out there this weekend and try to knock it into shape.
Hope you get the tax situation sorted out.
Hi, I'll just catch up on a few of your comments, thank you all for making your views known.
ReplyDeleteHi Pat, The man on the phone at the tax office said I won't have to pay tax when I am I am 65, because based on the figures he had in front of him for my pensions now, my income will not have risen significantly in the next two and a half years, so I will be below the projected allowance. I think that answers lizp2000 and Campfires comments.
I still have to pay £145 this time, but next year it will be less as the allowance goes up by £1,000.
Debs, I am glad you got your lightbulb moment. Embrace singledom with arms wide open, it's fab :o)
Some of my garden is very nice, thank you for your compliments. I filled the borders with different evergreen shrubs to make it simple to maintain. I can't do with digging things up and replanting. However the vegetable carden looks a bit bleak at the moment. My greenhouse needs recovering, and the raised beds need digging over, but I will get round to it eventually.
Gill, I wish I could have a little splurge now and again, but my brain is programmed to be very very carefull. My splurges are my holidays. The long walking one last year cost £300 because I had to pay for hotels, and the Scottish one cost a lot in petrol, a ferry crossing, and hostel accommodation. You have to make sacrifices to be able to afford what you want to do.
Thanks PP for the offer of a link to a survey site. I read about them on Money Saving Expert, and I don't really want to get involved. I already spend far too much time on the computer. Our cat rescue is very small, we are not a registered charity so cannot claim the tax back on the donations. We buy the food from whichever supermarket is cheapest.
What a fantastic read! This is the first truly interesting blog I have ever seen, all I ever see if young upstarts talking about technology!! Kudos to you MeanQueen!!!
ReplyDelete