Over 24,000 Signatures for Mortgage Payments via Salary Sacrifice: Petition Success

Over 24,000 Signatures for Mortgage Payments: The Government has responded to a petition calling for a mortgage shake-up by characterising the proposal as ineffective.

The petition, which has received nearly 25,000 signatures to date, contends that a salary-sacrifice scheme for mortgage costs similar to pension contributions would “enable more people to become mortgage-free earlier in life” and “invest more in their and their children’s future.”

Over 24,000 Signatures for Mortgage Payments

It was also indicated that the move would be beneficial for divorced couples who are “starting over, on their own, at an advanced age.” However, it was suggested that the value of the mortgage that could be paid off through salary sacrifice could be “capped” so that only those in need would benefit.

According to the report, the rising cost of living and home prices make paying off a mortgage extremely difficult for many individuals.

After a petition receives 10,000 signatures, the government is likely to respond, as it did on June 7.

The statement reads, “The government currently has no plans to permit tax-advantaged salary-sacrifice programmes for mortgage costs, as this is not the most efficient way to target assistance to those who need it most.”

If the petition receives 100,000 signatures by August 28, 2023, the subject will be considered for a parliamentary debate.

Some argue that the mortgage salary sacrifice proposal still has merit. Nicholas Mendes, mortgage technical manager at John Charcol, characterised it as “a welcome beacon of light.”

Mr. Mendes stated, “Many households feel their incomes are being stretched beyond comprehension due to food inflation, rising energy costs, wages not maintaining pace with inflation, and rising mortgage rates. It is not surprising that individuals feel poorer and have less discretionary income than they did two years ago.”

He added that this is exacerbated by recent tax reforms that will affect millions more people in the future.

Canadian Mortgage Rates Update: Lowest fixed and Variable Mortgage for June 2023

Mortgage Payments via Salary Sacrifice

The Office of Budget Responsibility (OBR) projects that 7.8 million people will be paying income tax at 40 percent or above by 2027/28, resulting in 2.1 million more higher rate taxpayers and 350,000 more additional rate taxpayers in five years.

Mr. Mendes went on to say, “The recent petition to enable people to pay their mortgage through salary sacrifice will be a beacon and will be applauded.

“When we consider current deductible salary sacrifice schemes, such as medical benefits, cycle to work scheme, pension contributions, and car finance, it would be a significant step forward to reduce the tax burden many homeowners are likely to face in the future by taking into account the highest outgoings of most homeowners.

“It will be important to consider the potential repercussions of a decrease in your taxable income, which affects your National Insurance contributions and benefits such as sick pay.”

He remarked, however, that he “doubts” the government would ever approve such a proposal, which “in effect” would be mortgage tax relief.