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HOME AFFORDABILITY GETS TOUGHER ACROSS THE U.S. AS PRICES AND MORTGAGE RATES SURGE

HOME AFFORDABILITY GETS TOUGHER ACROSS THE U.S. AS PRICES AND MORTGAGE RATES SURGE
PR Newswire
IRVINE, Calif., April 7, 2022

Portion of Wages Required for Homeownership Grows at Fastest Pace in More Than 15 Years; Historic Affordability Down in Alm…

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HOME AFFORDABILITY GETS TOUGHER ACROSS THE U.S. AS PRICES AND MORTGAGE RATES SURGE

PR Newswire

Portion of Wages Required for Homeownership Grows at Fastest Pace in More Than 15 Years; 
Historic Affordability Down in Almost 80 Percent of Markets as Median Home Price Hits $320,000

IRVINE, Calif., April 7, 2022 /PRNewswire/ -- ATTOM, a leading curator of real estate data nationwide for land and property data, today released its first-quarter 2022 U.S. Home Affordability Report, showing that median-priced single-family homes are less affordable in the first quarter compared to historical averages in 79 percent of counties across the nation with enough data to analyze. That was up from just 38 percent of counties that were historically less affordable in the first quarter of 2021, to the highest point since mid-2008, as home prices continued rising faster than wages in much of the country.

The report determined affordability for average wage earners by calculating the amount of income needed to meet major monthly home ownership expenses — including mortgage, property taxes and insurance — on a median-priced single-family home, assuming a 20 percent down payment and a 28 percent maximum "front-end" debt-to-income ratio. That required income was then compared to annualized average weekly wage data from the Bureau of Labor Statistics (see full methodology below).

"It's certainly no surprise that affordability is more challenging today for prospective homebuyers than it was a year ago," said Rick Sharga, executive vice president of market intelligence for ATTOM. "Historically low mortgage rates and higher wages helped offset rising home prices over the past few years, but as home prices continue to soar and interest rates approach five percent on a 30-year fixed rate loan, more consumers are going to struggle to find a property they can comfortably afford."

Compared to historical levels, median home prices in 461 of the 586 counties analyzed in the first quarter of 2022 were less affordable than in the past. The latest number was up from 449 of the same group of counties in the fourth quarter of 2021 and 224 in the first quarter of 2021. That increase continued as the median national home price spiked 16 percent, year over year, to a record high of $320,000 while average wages across the country rose just 7 percent.

Major ownership costs on median-priced homes around the U.S. did still remain within the financial means of average U.S. workers in the first quarter of 2022, consuming 26.3 percent of the $66,560 average national wage. That was within the 28 percent ceiling considered affordable by common lending standards.

But the 26.3 percent of average wages needed to buy a median-price home stood at the highest point since the third quarter of 2008. It was up from 24.9 percent in the fourth quarter of 2021 and 21.8 percent in the first quarter of last year – the largest annual increase since at least 2005.

The worsening affordability scenario for potential home buyers came as the U.S. housing market kept booming into its 11th year, both because of and in spite of the Coronavirus pandemic that remained a threat to the U.S. economy.

Throughout the pandemic, a glut of buyers has flooded the market, chasing an historically limited supply of homes for sale. This high demand was due in to mortgage rates hovering around 3 percent, and in part because of the flight of urban renters leaving congested virus-prone areas for the perceived safety of a house and yard and the space for growing work-at-home lifestyles. As demand has spiked, prices have jumped beyond wage increases, damaging affordability.

View Q1 2022 U.S. Home Affordability Heat Map 

Despite the continued decline in historic affordability, major home-ownership expenses on typical homes still were affordable to average local wage earners during the first quarter of 2022 in about half of the 586 counties in the report, based on the 28-percent guideline. The largest were Cook County (Chicago), IL; Harris County (Houston), TX; Dallas County, TX; Bexar County (San Antonio), TX, and Wayne County (Detroit), MI.

The most populous of the 303 counties where major expenses on median-priced homes were unaffordable for average local workers in the first quarter of 2022 were Los Angeles County, CA; Maricopa County (Phoenix), AZ; San Diego County, CA; Orange County, CA (outside Los Angeles) and Kings County (Brooklyn), NY.

Home prices again up at least 10 percent annually in two-thirds of country

Median single-family home prices in the first quarter of 2022 were up by at least 10 percent over the first quarter of 2021 in 371, or 63 percent, of the 586 counties included in the report. Data was analyzed for counties with a population of at least 100,000 and at least 50 single-family home and condo sales in the first quarter of 2022.

Among the 49 counties with a population of at least 1 million, the biggest year-over-year gains in median prices during the first quarter of 2022 were in St. Louis County, MO (up 40 percent); Wake County (Raleigh), NC (up 29 percent); Maricopa County (Phoenix), AZ (up 28 percent); Collin County (Plano), TX (up 27 percent) and Clark County (Las Vegas), NV (up 26 percent).

Counties with a population of at least 1 million where median prices went up the least, year-over-year, during the first quarter of 2022 were Westchester County, NY (outside New York City) (up less than 1 percent); Montgomery County, MD (outside Washington, DC) (up 1 percent); Cook County (Chicago), IL (up 2 percent); Kings County (Brooklyn), NY (up 4 percent) and Fairfax County, VA (outside Washington, DC (up 5 percent.)

Price gains outpace wage growth in four of every five markets

Home-price appreciation was greater than weekly wage growth in the first quarter of 2022 in 473 of the 586 counties analyzed in the report (81 percent), with the largest including Los Angeles County, CA; Harris County (Houston), TX; Maricopa County (Phoenix), AZ; San Diego County, CA, and Orange County, CA (outside Los Angeles).

Average annualized wage growth surpassed home-price appreciation in the first quarter of 2022 in 113 of the counties in the report (19 percent), including Cook County, (Chicago), IL; Kings County (Brooklyn), NY; King County (Seattle), WA; Santa Clara County (San Jose), CA, and New York County (Manhattan), NY.

Ownership costs still require less than 28 percent of average local wages in almost half of the nation

Major ownership costs on median-priced, single-family homes in the first quarter of 2022 consumed less than 28 percent of average local wages in 283 of the 586 counties analyzed (48 percent), assuming a 20 percent down payment. That was down slightly from 52 percent in the fourth quarter of 2021 for the same group of counties but well down from 66 percent in the first quarter of last year.

"The good news is that in almost half the counties we reviewed, home ownership costs remained below 28% for households with average income," Sharga said. "But the 'x-factor' is what impact 8% inflation rates will have on these households, and their ability to meet their financial obligations. Rising food and energy prices could be a hidden factor that makes affordability even more of a challenge for homebuyers and makes it more difficult to make ends meet for current homeowners."

Among those counties, 98 percent saw an increase in the portion of average local wages consumed by major ownership expenses from the first quarter of last year to the same period this year.  

Counties where the smallest portion of average local wages was required to afford the median-priced home during the first quarter of this year were Schuylkill County, PA (outside Allentown) (7 percent of annualized weekly wages needed to buy a home); Macon County (Decatur), IL (9.7 percent); Peoria County, IL (10.2 percent); Bibb County (Macon), GA (10.2 percent) and Rock Island County (Moline) IL (11 percent).

Counties with a population of at least 1 million where major ownership expenses typically consumed less than 28 percent of average local wages in the first quarter of 2022 included Wayne County (Detroit), MI (11.9 percent); Allegheny County (Pittsburgh), PA (14.2 percent); Cuyahoga County (Cleveland), OH (15.1 percent); Philadelphia County, PA (16 percent) and Cook County (Chicago), IL (20.6 percent).

A total of 303 counties in the report (52 percent) required more than 28 percent of annualized local weekly wages to afford a typical home in the first quarter of 2022. Counties that required the greatest percentage of wages were Santa Cruz County, CA (92.7 percent of annualized weekly wages needed to buy a home); Kings County (Brooklyn), NY (91.5 percent); Marin County, CA (outside San Francisco) (79.7 percent); Maui County, HI (74.8 percent) and San Luis Obispo County, CA (73.7 percent).

Aside from Kings County, NY, the counties with a population of at least 1 million where home ownership consumed the highest percentage of average annualized local wages in the first quarter of this year included Orange County, CA (outside Los Angeles) (67.8 percent); Queens County, NY (65 percent); Alameda County (Oakland), CA (59 percent) and New York County (Manhattan, NY (58.9 percent).

Just one in four counties require annual wages of more than $75,000 to afford typical home

Despite the downward trend in affordability, annual wages of more than $75,000 still were needed to afford major costs on the median-priced home purchased during the first quarter of 2022 in just 138, or 24 percent, of the 586 markets in the report.

The top 25 highest annual wages required to afford typical homes again were all on the east or west coasts, led by New York County (Manhattan), NY ($329,747); San Mateo County (outside San Francisco), CA ($286,976); Santa Clara County (San Jose), CA ($266,934); San Francisco County, CA ($264,038) and Marin County (outside San Francisco), CA ($250,106).

The lowest annual wages required to afford a median-priced home in the first quarter of 2022 were in Schuylkill County, PA (outside Allentown) ($12,011); Cambria County, PA (outside Pittsburgh) ($17,129); Bibb County (Macon), GA ($18,027); Fayette County, PA (south of Pittsburgh) ($18,583) and Blair County (Altoona), PA ($19,221).

Homeownership less affordable than historic averages in almost 80 percent of counties

Among the 586 counties analyzed in the report, 461 (79 percent) were less affordable in the first quarter of 2022 than their historic affordability averages. That was up slightly from 77 percent in the fourth quarter of 2021, but double the 39 percent level in the first quarter of last year.

Counties with a population of at least 1 million that were less affordable than their historic averages (indexes of less than 100 are considered less affordable compared to historic averages) included Maricopa County (Phoenix), AZ (index of 68); Clark County (Las Vegas), NV (71); Tarrant County (Fort Worth), TX (72); Hillsborough County (Tampa), FL (72) and Collin County (Plano), TX (73).

Counties with the worst affordability indexes in the first quarter of 2022 were Clayton County, GA (outside Atlanta) (index of 45); Canyon County, ID (outside Boise) (55); Rankin County (Jackson), MS (55); Pinal County, AZ (outside Phoenix) (58) and Newton County, GA (east of Atlanta) (59).

Among counties with a population of at least 1 million, those where the affordability indexes worsened most from the first quarter of 2021 to the first quarter of 2022 were St. Louis County, MO (index down 32 percent); Wake County (Raleigh), NC (down 26 percent); Maricopa County (Phoenix), AZ (down 25 percent); Clark County (Las Vegas), NV (down 24 percent) and Collin County (Plano), TX (down 24 percent).

Only one in five markets were more affordable than historic averages

Among the 586 counties in the report, only 125 (21 percent) were more affordable than their historic affordability averages in the first quarter of 2022. That was down slightly from 23 percent of the same group in the prior quarter but was just a third of the 62 percent level in the first quarter of last year.

Counties with a population of at least 1 million that were more affordable than their historic averages (indexes of more than 100 are considered more affordable compared to historic averages) included Westchester County, NY (outside New York City) (index of 125); Montgomery County, MD (outside Washington, D.C.) (119); Cook County (Chicago), IL (112); New York County (Manhattan), NY (110) and Fairfax County, VA (outside Washington, D.C.) (106).

Counties with the best affordability indexes in the first quarter of 2022 included Macon County (Decatur), IL (index of 180); Kings County, CA (south of Fresno) (156); Schuylkill County, PA (outside Allentown) (152); Peoria County, IL (148) and San Francisco County, CA (142).

Counties with a population of least 1 million where the affordability index declined the least from the first quarter of last year to the same period this year were Montgomery County, MD (outside Washington, DC) (index down 3 percent); Cook County (Chicago), IL (down 4 percent); Westchester County, NY (outside New York City) (down 6 percent); New York County (Manhattan), NY (down 8 percent) and Hennepin County (Minneapolis), MN (down 9 percent). No counties with populations of at least 1 million saw their indexes improve over that time period.

Report Methodology

The ATTOM Data Solutions U.S. Home Affordability Index analyzed median home prices derived from publicly recorded sales deed data collected by ATTOM and average wage data from the U.S. Bureau of Labor Statistics in 586 U.S. counties with a combined population of 261.2 million during the first quarter of 2022. The affordability index is based on the percentage of average wages needed to pay for major expenses on a median-priced home with a 30-year fixed-rate mortgage and a 20 percent down payment. Those expenses include property taxes, home insurance, mortgage payments and mortgage insurance. Average 30-year fixed interest rates from the Freddie Mac Primary Mortgage Market Survey were used to calculate monthly house payments.

The report determined affordability for average wage earners by calculating the amount of income needed for major home ownership expenses on a median-priced home, assuming a loan of 80 percent of the purchase price and a 28 percent maximum "front-end" debt-to-income ratio. For example, the nationwide median home price of $320,000 in the first quarter of 2022 required an annual wage of $62,543, based on a $64,000 down payment, a $256,000 loan and monthly expenses not exceeding the 28 percent barrier — meaning households would not be spending more than 28 percent of their income on mortgage payments, property taxes and insurance. That required income was less than the $66,560 average wage nationwide based on the most recent average weekly wage data available from the Bureau of Labor Statistics, making a median-priced home nationwide affordable for average workers.

About ATTOM

ATTOM provides premium property data to power products that improve transparency, innovation, efficiency and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation's population. A rigorous data management process involving more than 20 steps validates, standardizes, and enhances the real estate data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 20TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include bulk file licenses, property data APIs, real estate market trends, property reports and more. Also, introducing our newest innovative solution, that offers immediate access and streamlines data management – ATTOM Cloud.

Media Contact:
Christine Stricker
949.748.8428
christine.stricker@attomdata.com 

Data and Report Licensing:
datareports@attomdata.com
949.502.8313
datareports@attomdata.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/home-affordability-gets-tougher-across-the-us-as-prices-and-mortgage-rates-surge-301519644.html

SOURCE ATTOM

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Government

Buried Project Veritas Recording Shows Top Pfizer Scientists Suppressed Concerns Over COVID-19 Boosters, MRNA Tech

Buried Project Veritas Recording Shows Top Pfizer Scientists Suppressed Concerns Over COVID-19 Boosters, MRNA Tech

Submitted by Liam Cosgrove

Former…

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Buried Project Veritas Recording Shows Top Pfizer Scientists Suppressed Concerns Over COVID-19 Boosters, MRNA Tech

Submitted by Liam Cosgrove

Former Project Veritas & O’Keefe Media Group operative and Pfizer formulation analyst scientist Justin Leslie revealed previously unpublished recordings showing Pfizer’s top vaccine researchers discussing major concerns surrounding COVID-19 vaccines. Leslie delivered these recordings to Veritas in late 2021, but they were never published:

Featured in Leslie’s footage is Kanwal Gill, a principal scientist at Pfizer. Gill was weary of MRNA technology given its long research history yet lack of approved commercial products. She called the vaccines “sneaky,” suggesting latent side effects could emerge in time.

Gill goes on to illustrate how the vaccine formulation process was dramatically rushed under the FDA’s Emergency Use Authorization and adds that profit incentives likely played a role:

"It’s going to affect my heart, and I’m going to die. And nobody’s talking about that."

Leslie recorded another colleague, Pfizer’s pharmaceutical formulation scientist Ramin Darvari, who raised the since-validated concern that repeat booster intake could damage the cardiovascular system:

None of these claims will be shocking to hear in 2024, but it is telling that high-level Pfizer researchers were discussing these topics in private while the company assured the public of “no serious safety concerns” upon the jab’s release:

Vaccine for Children is a Different Formulation

Leslie sent me a little-known FDA-Pfizer conference — a 7-hour Zoom meeting published in tandem with the approval of the vaccine for 5 – 11 year-olds — during which Pfizer’s vice presidents of vaccine research and development, Nicholas Warne and William Gruber, discussed a last-minute change to the vaccine’s “buffer” — from “PBS” to “Tris” — to improve its shelf life. For about 30 seconds of these 7 hours, Gruber acknowledged that the new formula was NOT the one used in clinical trials (emphasis mine):


“The studies were done using the same volume… but contained the PBS buffer. We obviously had extensive consultations with the FDA and it was determined that the clinical studies were not required because, again, the LNP and the MRNA are the same and the behavior — in terms of reactogenicity and efficacy — are expected to be the same.

According to Leslie, the tweaked “buffer” dramatically changed the temperature needed for storage: “Before they changed this last step of the formulation, the formula was to be kept at -80 degrees Celsius. After they changed the last step, we kept them at 2 to 8 degrees celsius,” Leslie told me.

The claims are backed up in the referenced video presentation:

I’m no vaccinologist but an 80-degree temperature delta — and a 5x shelf-life in a warmer climate — seems like a significant change that might warrant clinical trials before commercial release.

Despite this information technically being public, there has been virtually no media scrutiny or even coverage — and in fact, most were told the vaccine for children was the same formula but just a smaller dose — which is perhaps due to a combination of the information being buried within a 7-hour jargon-filled presentation and our media being totally dysfunctional.

Bohemian Grove?

Leslie’s 2-hour long documentary on his experience at both Pfizer and O’Keefe’s companies concludes on an interesting note: James O’Keefe attended an outing at the Bohemian Grove.

Leslie offers this photo of James’ Bohemian Grove “GATE” slip as evidence, left on his work desk atop a copy of his book, “American Muckraker”:

My thoughts on the Bohemian Grove: my good friend’s dad was its general manager for several decades. From what I have gathered through that connection, the Bohemian Grove is not some version of the Illuminati, at least not in the institutional sense.

Do powerful elites hangout there? Absolutely. Do they discuss their plans for the world while hanging out there? I’m sure it has happened. Do they have a weird ritual with a giant owl? Yep, Alex Jones showed that to the world.

My perspective is based on conversations with my friend and my belief that his father is not lying to him. I could be wrong and am open to evidence — like if boxer Ryan Garcia decides to produce evidence regarding his rape claims — and I do find it a bit strange the club would invite O’Keefe who is notorious for covertly filming, but Occam’s razor would lead me to believe the club is — as it was under my friend’s dad — run by boomer conservatives the extent of whose politics include disliking wokeness, immigration, and Biden (common subjects of O’Keefe’s work).

Therefore, I don’t find O’Keefe’s visit to the club indicative that he is some sort of Operation Mockingbird asset as Leslie tries to depict (however Mockingbird is a 100% legitimate conspiracy). I have also met James several times and even came close to joining OMG. While I disagreed with James on the significance of many of his stories — finding some to be overhyped and showy — I never doubted his conviction in them.

As for why Leslie’s story was squashed… all my sources told me it was to avoid jail time for Veritas executives.

Feel free to watch Leslie’s full documentary here and decide for yourself.

Fun fact — Justin Leslie was also the operative behind this mega-viral Project Veritas story where Pfizer’s director of R&D claimed the company was privately mutating COVID-19 behind closed doors:

Tyler Durden Tue, 03/12/2024 - 13:40

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International

Association of prenatal vitamins and metals with epigenetic aging at birth and in childhood

“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging…

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“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging biomarkers across the life course.”

Credit: 2024 Bozack et al.

“[…] our findings support the hypothesis that the intrauterine environment, particularly essential and non-essential metals, affect epigenetic aging biomarkers across the life course.”

BUFFALO, NY- March 12, 2024 – A new research paper was published in Aging (listed by MEDLINE/PubMed as “Aging (Albany NY)” and “Aging-US” by Web of Science) Volume 16, Issue 4, entitled, “Associations of prenatal one-carbon metabolism nutrients and metals with epigenetic aging biomarkers at birth and in childhood in a US cohort.”

Epigenetic gestational age acceleration (EGAA) at birth and epigenetic age acceleration (EAA) in childhood may be biomarkers of the intrauterine environment. In this new study, researchers Anne K. Bozack, Sheryl L. Rifas-Shiman, Andrea A. Baccarelli, Robert O. Wright, Diane R. Gold, Emily Oken, Marie-France Hivert, and Andres Cardenas from Stanford University School of Medicine, Harvard Medical School, Harvard T.H. Chan School of Public Health, Columbia University, and Icahn School of Medicine at Mount Sinai investigated the extent to which first-trimester folate, B12, 5 essential and 7 non-essential metals in maternal circulation are associated with EGAA and EAA in early life. 

“[…] we hypothesized that OCM [one-carbon metabolism] nutrients and essential metals would be positively associated with EGAA and non-essential metals would be negatively associated with EGAA. We also investigated nonlinear associations and associations with mixtures of micronutrients and metals.”

Bohlin EGAA and Horvath pan-tissue and skin and blood EAA were calculated using DNA methylation measured in cord blood (N=351) and mid-childhood blood (N=326; median age = 7.7 years) in the Project Viva pre-birth cohort. A one standard deviation increase in individual essential metals (copper, manganese, and zinc) was associated with 0.94-1.2 weeks lower Horvath EAA at birth, and patterns of exposures identified by exploratory factor analysis suggested that a common source of essential metals was associated with Horvath EAA. The researchers also observed evidence of nonlinear associations of zinc with Bohlin EGAA, magnesium and lead with Horvath EAA, and cesium with skin and blood EAA at birth. Overall, associations at birth did not persist in mid-childhood; however, arsenic was associated with greater EAA at birth and in childhood. 

“Prenatal metals, including essential metals and arsenic, are associated with epigenetic aging in early life, which might be associated with future health.”

 

Read the full paper: DOI: https://doi.org/10.18632/aging.205602 

Corresponding Author: Andres Cardenas

Corresponding Email: andres.cardenas@stanford.edu 

Keywords: epigenetic age acceleration, metals, folate, B12, prenatal exposures

Click here to sign up for free Altmetric alerts about this article.

 

About Aging:

Launched in 2009, Aging publishes papers of general interest and biological significance in all fields of aging research and age-related diseases, including cancer—and now, with a special focus on COVID-19 vulnerability as an age-dependent syndrome. Topics in Aging go beyond traditional gerontology, including, but not limited to, cellular and molecular biology, human age-related diseases, pathology in model organisms, signal transduction pathways (e.g., p53, sirtuins, and PI-3K/AKT/mTOR, among others), and approaches to modulating these signaling pathways.

Please visit our website at www.Aging-US.com​​ and connect with us:

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For media inquiries, please contact media@impactjournals.com.

 

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International

A beginner’s guide to the taxes you’ll hear about this election season

Everything you need to know about income tax, national insurance and more.

Cast Of Thousands/Shutterstock

National insurance, income tax, VAT, capital gains tax, inheritance tax… it’s easy to get confused about the many different ways we contribute to the cost of running the country. The budget announcement is the key time each year when the government shares its financial plans with us all, and announces changes that may make a tangible difference to what you pay.

But you’ll likely be hearing a lot more about taxes in the coming months – promises to cut or raise them are an easy win (or lose) for politicians in an election year. We may even get at least one “mini-budget”.

If you’ve recently entered the workforce or the housing market, you may still be wrapping your mind around all of these terms. Here is what you need to know about the different types of taxes and how they affect you.

The UK broadly uses three ways to collect tax:

1. When you earn money

If you are an employee or own a business, taxes are deducted from your salary or profits you make. For most people, this happens in two ways: income tax, and national insurance contributions (or NICs).

If you are self-employed, you will have to pay your taxes via an annual tax return assessment. You might also have to pay taxes this way for interest you earn on savings, dividends (distribution of profits from a company or shares you own) received and most other forms of income not taxed before you get it.

Around two-thirds of taxes collected come from people’s or business’ incomes in the UK.

2. When you spend money

VAT and excise duties are taxes on most goods and services you buy, with some exceptions like books and children’s clothing. About 20% of the total tax collected is VAT.

3. Taxes on wealth and assets

These are mainly taxes on the money you earn if you sell assets (like property or stocks) for more than you bought them for, or when you pass on assets in an inheritance. In the latter case in the UK, the recipient doesn’t pay this, it is the estate paying it out that must cover this if due. These taxes contribute only about 3% to the total tax collected.

You also likely have to pay council tax, which is set by the council you live in based on the value of your house or flat. It is paid by the user of the property, no matter if you own or rent. If you are a full-time student or on some apprenticeship schemes, you may get a deduction or not have to pay council tax at all.


Quarter life, a series by The Conversation

This article is part of Quarter Life, a series about issues affecting those of us in our 20s and 30s. From the challenges of beginning a career and taking care of our mental health, to the excitement of starting a family, adopting a pet or just making friends as an adult. The articles in this series explore the questions and bring answers as we navigate this turbulent period of life.

You may be interested in:

If you get your financial advice on social media, watch out for misinformation

Future graduates will pay more in student loan repayments – and the poorest will be worst affected

Selling on Vinted, Etsy or eBay? Here’s what you need to know about paying tax


Put together, these totalled almost £790 billion in 2022-23, which the government spends on public services such as the NHS, schools and social care. The government collects taxes from all sources and sets its spending plans accordingly, borrowing to make up any difference between the two.

Income tax

The amount of income tax you pay is determined by where your income sits in a series of “bands” set by the government. Almost everyone is entitled to a “personal allowance”, currently £12,570, which you can earn without needing to pay any income tax.

You then pay 20% in tax on each pound of income you earn (across all sources) from £12,570-£50,270. You pay 40% on each extra pound up to £125,140 and 45% over this. If you earn more than £100,000, the personal allowance (amount of untaxed income) starts to decrease.

If you are self-employed, the same rates apply to you. You just don’t have an employer to take this off your salary each month. Instead, you have to make sure you have enough money at the end of the year to pay this directly to the government.


Read more: Taxes aren't just about money – they shape how we think about each other


The government can increase the threshold limits to adjust for inflation. This tries to ensure any wage rise you get in response to higher prices doesn’t lead to you having to pay a higher tax rate. However, the government announced in 2021 that they would freeze these thresholds until 2026 (extended now to 2028), arguing that it would help repay the costs of the pandemic.

Given wages are now rising for many to help with the cost of living crisis, this means many people will pay more income tax this coming year than they did before. This is sometimes referred to as “fiscal drag” – where lower earners are “dragged” into paying higher tax rates, or being taxed on more of their income.

National insurance

National insurance contributions (NICs) are a second “tax” you pay on your income – or to be precise, on your earned income (your salary). You don’t pay this on some forms of income, including savings or dividends, and you also don’t pay it once you reach state retirement age (currently 66).

While Jeremy Hunt, the current chancellor of the exchequer, didn’t adjust income tax meaningfully in this year’s budget, he did announce a cut to NICs. This was a surprise to many, as we had already seen rates fall from 12% to 10% on incomes higher than £242/week in January. It will now fall again to 8% from April.


Read more: Budget 2024: experts explain what it means for taxpayers, businesses, borrowers and the NHS


While this is charged separately to income tax, in reality it all just goes into one pot with other taxes. Some, including the chancellor, say it is time to merge these two deductions and make this simpler for everyone. In his budget speech this year, Hunt said he’d like to see this tax go entirely. He thinks this isn’t fair on those who have to pay it, as it is only charged on some forms of income and on some workers.

I wouldn’t hold my breath for this to happen however, and even if it did, there are huge sums linked to NICs (nearly £180bn last year) so it would almost certainly have to be collected from elsewhere (such as via an increase in income taxes, or a lot more borrowing) to make sure the government could still balance its books.

A young black man sits at a home office desk with his feet up, looking at a mobile phone
Do you know how much tax you pay? Alex from the Rock/Shutterstock

Other taxes

There are likely to be further tweaks to the UK’s tax system soon, perhaps by the current government before the election – and almost certainly if there is a change of government.

Wealth taxes may be in line for a change. In the budget, the chancellor reduced capital gains taxes on sales of assets such as second properties (from 28% to 24%). These types of taxes provide only a limited amount of money to the government, as quite high thresholds apply for inheritance tax (up to £1 million if you are passing on a family home).

There are calls from many quarters though to look again at these types of taxes. Wealth inequality (the differences between total wealth held by the richest compared to the poorest) in the UK is very high (much higher than income inequality) and rising.

But how to do this effectively is a matter of much debate. A recent study suggested a one-off tax on total wealth held over a certain threshold might work. But wealth taxes are challenging to make work in practice, and both main political parties have already said this isn’t an option they are considering currently.

Andy Lymer and his colleagues at the Centre for Personal Financial Wellbeing at Aston University currently or have recently received funding for their research work from a variety of funding bodies including the UK's Money and Pension Service, the Aviva Foundation, Fair4All Finance, NEST Insight, the Gambling Commission, Vivid Housing and the ESRC, amongst others.

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