Business
I earn £1,600 a month and thirds goes on bills
Joe Makin, 23, earns £22,000 a year working in admin and says almost two-thirds of his take home pay is eaten up by rent and bills.
He says he feels “semi-comfortable but by no means completely secure” and would like to see more help for younger people in Wednesday’s Budget.
The recent cut to National Insurance, where the main rate went down from 12% to 10% made very little difference to him, he says.
The BBC has heard from people with a range of earnings and household set-ups about their hopes that the Budget will include help on things like mortgages for first-time buyers, tax cuts and child benefit.
‘I earn £22,000 and would like more cost-of-living help’
Mr Makin rents a one-bedroom house in Selby, North Yorkshire. “Each month I earn about £1,600 after tax. Maybe £1,000-£1,100 of that goes on rent and bills,” he says.
“There were no subsidies like the Energy Bills Support Scheme this year, which made a noticeable difference for me and would’ve been worse for others.
“It’s like the government sees it as last year’s thing and they’ve done it once. But it would still be appreciated.
“I wouldn’t say we are coming out of the cost-of-living crisis, I’d say I actually feel slightly worse off than last year but it feels like the news agenda has moved on.
“The National Insurance I pay went down ever so slightly recently but that seems to mainly benefit the rich. I’m about £20 a month better off, which is next to nothing.”
‘I earn £50,000 and would like the 40% tax threshold raised’
Aga Szedzianis, in Newham, east London says she returned to work early from maternity leave because of the rising cost of living.
The 37-year-old lives with her husband and two young daughters in a small three-bed terraced house, which they would like to refurbish but cannot afford to do.
She and her husband, who are both associate architects, earn just over £50,000 each. But she says, with price rises, the cost of childcare, and their mortgage soon set to go up by £500 a month, things are getting “quite uncomfortable”.
“We had to stop paying pension contributions recently. We can afford only what’s now and not the future.
“We’re two professionals working in central London and we can’t afford holidays anymore.”
The two main things Ms Szedzianis would like to see in the Budget are income tax thresholds going up, and an increase in the tax-free childcare allowance.
Usually tax thresholds rise in line with inflation, but they have been frozen since 2021. So as your pay goes up, a bigger portion of your income is taxed.
“The biggest help to us would be raising the threshold for paying 40% tax. If it was raised from £50,000 to £60,000, it would [potentially] give us £2,000 a year each.”
‘I earn £27,000 and would welcome 99% mortgages’
Rebecca Bostock earns £27,000 working as a case manager in the motor industry.
The 45-year-old who lives just outside Daventry, in Northampton, would love to buy her own home but says saving for a deposit is “absolutely not possible” while still also paying rent.
She would welcome any help for first-time buyers such as a 99% mortgage scheme, whereby buyers would only need a 1% deposit with the government backing the overall loan.
“A 1% deposit is more obtainable, as opposed to 5% or 10%,” she says.
She would also like to see a fuel duty cut in the Budget as “the amount we pay at the pumps is ridiculous”.
Fuel duty has been frozen since 2011, and reports suggest this will continue for another year.
A 5p cut due to end this month is also expected to be extended.
‘I earn £70,000 but my wife earns £10,000. Child benefit should be fairer’
David Stuart, 36, from Whitburn in Scotland, is a data analyst who lives with his wife and two children, aged 10 and six.
When their first child was born, he was earning about £25,000 a year. By the time his second child was born, his salary had increased to more than £50,000.
This meant he had crossed the threshold for the High Income Child Benefit Charge.
If one parent earns more than £50,000, you have to start paying back some of your child benefit and if you earn £60,000, you don’t receive any child benefit at all.
Mr Stuart now makes about £70,000 a year and his wife, who works as a childminder, earns around £10,000.
“The threshold hasn’t moved in 10 years. ‘High income’ in 2013 was very different to ‘high income’ today,” he says.
“Personally, I’m a high earner – but as a household, I wouldn’t say we’re high earners.”
Two parents earning £50,000 each would still be able to claim full child benefit, despite their household earning more than Mr Stuart and his wife.
“I would like to see it based on household income, not an individual’s income. It’s not about being a high earner or not. It’s about being fair.”
‘I’m on benefits and would like food vouchers for older children’
Laura Coppard and her three children live in a one-bedroom bungalow provided by Lewes Council.
Ms Coppard receives £330 in Employment and Support Allowance (ESA) fortnightly, £207 in child benefit a month, and £53 a month in NHS Healthy Start vouchers, which some parents receive to buy healthy food and milk for their children.
“I’d love to just put food in my trolley without having to think about it but I can’t,” she says.
“My baby’s milk costs £10.50, three would last a month so that’s £30,” she says, leaving £23 for nappies, wipes, fruit and veg for the other children.
The amount she receives recently fell when her daughter turned four. “When they turn four, they stop it. It should carry on for longer, for children up to maybe aged 10,” she says.
She would also like to see the government offer more cost-of-living payments.
Additional reporting by Kris Bramwell & Victoria Park-Froud.
— Reports /TrainViral/
The prospective new owner of Royal Mail has said he will not walk away from the requirement to deliver letters throughout the UK six days a week, as long as he is running the service.
“As long as I’m alive, I completely exclude this,” Czech billionaire Daniel Kretinsky told the BBC.
Mr Kretinsky has had a £3.6bn offer for Royal Mail accepted by its board.
Shareholders are expected to approve the deal in the coming months, but the government also has a say over whether it goes ahead.
Currently the Universal Service Obligation (USO) requires Royal Mail to deliver letters six days a week throughout the country for the same price. But questions have been raised over whether the service could be reduced in the future.
In an exclusive interview with the BBC, Mr Kretinsky also said he would be willing to share profits with employees, if given the go-ahead to buy the group.
However, he appeared to reject the idea of employees having a stake in Royal Mail, which unions have called for in exchange for their support.
The Royal Mail board agreed a £3.6bn takeover offer from Mr Kretinsky in May for the 500-year-old organisation, which employs more than 150,000 people. Including assumed debts, the offer is worth £5bn.
But because Royal Mail is a nationally important company, the government has the power to scrutinise and potentially block the deal.
As well as keeping the new government on side, Mr Kretinsky also faces the task of convincing postal unions that the proposed deal will benefit employees.
The USO is a potential sticking point for both the government and unions.
Royal Mail is required by law to deliver letters six days a week and parcels five days a week to every address in the UK for a fixed price.
How well this has actually been working in practice is a different matter. Ten years ago, 92% of first class post arrived on time. By the end of last year it was down to 74%, according to the regulator Ofcom.
Last year the regulator fined Royal Mail £5.6m for failing to meet its delivery targets.
Royal Mail has been pushing for this obligation to be watered down. It wants to cut second class letter deliveries to every other weekday, saying this will save £300m, and lead to “fewer than 1,000” voluntary redundancies.
‘Unconditional commitment’
Mr Kretinsky has committed in writing to honouring the USO, but only for five years.
And after that, in theory, the new owners could just walk away from it.
However, Mr Kretinsky told the BBC: “As long as I’m alive, I completely exclude this, and I’m sure that anybody that would be my successor would absolutely understand this.
“I say this as an absolutely clear, unconditional commitment: Royal Mail is going to be the provider of Universal Service Obligation in the UK, I would say forever, as long as the service is going to be needed, and as long as we are going to be around.”
Mr Kretinsky added that the written five-year commitment was “the longest commitment that has ever been offered in a situation like this”.
Another potential stumbling block for the deal, however, is how the company will be structured.
Unions would like to see the company renationalised, but Dave Ward, general secretary of the Communication Workers Union (CWU), told the BBC that would be “difficult in the current political and economic environment”.
Instead, what the CWU is pushing for is “a different model of ownership” – that is, where the employees part-own the business.
To get its support for the takeover, the union wants employees to share ownership of the company, along with other concessions including board representation for workers.
It says profit sharing is “not going to be enough to deliver our support and the support of the workforce”.
If the union doesn’t get what it wants, it won’t rule out industrial action, Mr Ward said. Its members went on strike in 2022 and 2023.
Although Mr Kretinsky said he is “very open” to profit sharing, he is not in favour of shared ownership.
“I don’t think the ownership stake is the right model,” he said. “The logic is: share of profit, yes, [but an] ownership structure creates a lot of complexity.
“For instance, what happens if the employee leaves? He has shares, he is leaving, he is not working for the company, he [still] needs remunerating.”
Mr Kretinsky said he didn’t want to create “some anonymous structure” but instead “remunerate the people who are working for the company, and creating value for the company”.
The union is also concerned about job losses and changes to the terms and conditions of postal workers’ contracts.
Mr Kretinsky has guaranteed no compulsory redundancies or changes in terms and conditions but only until 2025.
“If we are more successful, and we have more parcels to be delivered, we need not less people, but we need more people,” he said. “So really, job cuts are not part of our plan at all.”
He said if the management, union and employees work together, “we will be successful”.
Another concern is the potential break-up of the business.
The profit for Royal Mail’s parent company last year was entirely generated by its German and Canadian logistics and parcels business, GLS. Royal Mail itself made a loss.
Mr Kretinsky has promised not to split off GLS or load the parent company with excessive debt, although borrowings will rise if the deal goes through.
But he has a way to go to convince the CWU.
“I can’t think of any other country in the world that would just just hand over its entire postal service to an overseas equity investor,” Mr Ward of the CWU said.
However, Mr Kretinsky said that the postal unions “do understand that we are on the same ship, and that we need this ship to be successful, and that if we are there, we don’t have any real problems to deal with, because the sky is blue, and it’s blue for everybody.”
The union cannot stop this deal but the government can block it under the National Security and Investment Act.
Business Secretary Jonathan Reynolds has said he will scrutinise the assurances and guarantees given and called on Mr Kretinsky to work constructively with the unions.
Mr Kretinsky may say that he and the unions are ultimately on the same ship but, as things stand, they are not on the same page.
Who is Daniel Kretinsky?
Daniel Kretinsky started his career as a lawyer in his hometown of Brno, before moving to Prague.
He then made serious money in Central and Eastern European energy interests.
This includes Eustream, which transports Russian gas via pipelines that run through Ukraine, the Czech Republic and Slovakia.
He then diversified into other investments, including an almost 10% stake in UK supermarket chain Sainsbury’s and a 27% share in Premier League club West Ham United.
The Czech businessman is worth about £6bn, according to reports.
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