Brits finally reach tax freedom day

30 May 2012 09:16:41

Tax freedom day has finally arrived for the average Brit.

People around the country may not have realised, but yesterday (May 29th) was actually tax freedom day - the first day of the year when the average full-time worker finally stopped sending all of their earnings to the taxman. However, it's not all good news, as insurer Bright Grey has calculated that it will still take people another 82 days to pay off their housing and household bills. And those with unsecured debts, such as credit cards or personal loans, will need to work even longer before they start taking home their earnings.

Date underlines extent of tax obligations
The fact that the average worker would have to hand over all of their earnings to the taxman until May 29th shows just how long it takes to settle our tax bills. Fortunately, we get to pay our taxes as a percentage of each month's pay. But if we were required to pay our dues up-front, the average person would only now have fulfilled their tax obligations.

However, the settling of accounts does not stop there, as Bright Grey's 'Financial Safety Net' report shows that housing and household bills typically take a further 82 days to pay off, while those with debts - which average almost £1,500 per person - must give up another 17 days' worth of salary.

Yet most devote little 'time' to protection payments
According to the research, this latter figure is almost twice as long as the number of days spent paying into savings accounts. Furthermore, spending on protection products - such as life insurance or critical illness cover - takes just four days. And many people spend nothing whatsoever on financial protection, leaving themselves exposed at times of need.

Roger Edwards, Bright Grey's proposition director, commented: "There are such a range of costs that many families struggle to cover during the course of the year - and it's quite scary to think that we spend more on taxes than housing, bills, groceries, debts and transport put together. It is therefore, to an extent, little wonder that savings and protection take up so little 'time' in our expenditure calendar, as many people feel they have so little left over."

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