January and February don’t have to be the “miserable months”, although bidding farewell to an all-too-brief period of annual over-indulgence and welcome relaxation doesn’t get any easier. The point was proven at a festive drinks get-together with friends between Christmas and new year, when a chap stood next to me admitted that he was looking forward to going back to work “like a hole in the head”, a sentiment with which most adults could identify.
Similar attitudes were probably even more evident than usual this year as the festive break stretched on and on, resulting in many of us frequently asking our better halves ‘what day is it?’ Rarely has a cold, wet Tuesday felt like a Saturday; it did this year, though.
Our innate reluctance to return to work replicates the mood we often experienced as schoolchildren when the extent of our academic worries, arising from an imminent return to school, focused on what we considered hugely important matters such as remembering irregular French verbs or reciting the formula for solving differential equations. Working adults have grown similarly wary – not about French or maths, but of the state’s attempts to relieve them of as much of their hard-earned as they possible can.
This year, for example, ‘Tax Freedom Day’, when we stop paying tax and start pocketing our own money, is estimated to fall around 18th June. Last year, 2025, the Adam Smith Institute estimated that every penny the average person earned for working up to and including 11th June went to the taxman. In other words, British taxpayers worked a total of 162 days on behalf of the taxman before they started earning for themselves.
By 2028, Tax Freedom Day is projected to fall on 24 June, the latest date this century. Regrettably, this is hardly a modern phenomenon.
Since early Greek and Roman times, the list of spurious claims made by politicians regarding taxpayer-funded plans designed to ‘improve’ the lot of all citizens, or act as a valuable contribution to the common good, have grown much lengthier than anyone preferred.
Moreover, the opaque wording and phraseology is used in politicians’ claims to deflect citizens’ attention away from the fact that they’re being stung.
Take National Insurance, for example. For years, the authorities have actively cultivated a widespread belief that NI is somehow ring-fenced from other Treasury revenue and invested on behalf of those of us who pay it in the expectation that we shall one day receive a pension when we finally retire. This is nonsense.
In fact, National Insurance is an additional form of income tax. Furthermore, the money collected under the guise of NI is neither ring-fenced nor invested to pay pensions – they’re paid out of the Treasury’s current income.
In other words, the state pension system is a glorified cash conduit distributing money paid in by current workers directly to retirees. Problems arise with such schemes when there’s not enough money coming in to cover the demands of those who need paying.
National Insurance is only one example and there’s no need to look far to see how other commonly used phrases are just a different way of disguising the fact that a tax is being collected.
Vehicle excise is an additional car tax. Stamp Duty sounds suitably grandiose, but as we know it’s actually a cripplingly expensive property tax which benefits the payer not one iota. Fuel duty, or should that be petrol tax, accounts for almost 56% of your fuel costs, while VAT, which rolls off the tongue, is an additional tax on what some faceless bureaucrat deems to be a ‘luxury’ item, such as a hot sausage roll. Or ice cream. Or nuts that have been de-shelled.
History reminds us that governments have always found ways of taking money from their citizens, employing different phrases to avoid using the ‘t’ word.
Carucage, for instance, was a medieval tax levied on land and buildings whenever the Crown needed more money, while if you paid ‘Scrutage’, you could legally avoid military service. A tithe took 10% of your income and handed it over to the Church or the state.
However, most older homeowners can legitimately ensure that a proportion of their wealth is not taxed, ensuring that those aged 55 and over can enjoy the benefits of tax-free cash.
It’s a little-known fact that equity release allows you to withdraw money from your home without having to pay tax on the sum you withdraw.
In effect, the principal benefit of releasing equity is the receipt of a tax-free lump sum which you’re free to spend as you wish. While it’s difficult to legitimately avoid paying taxes, irrespective of what they’re called, tax-free funds released from your property can be used to ensure that future winters need be cold and miserable.
Consider the photographs of sun-drenched beaches and azure-blue skies evident in newspapers, magazines and online at this time of the year. They’re designed to trigger a psychological reaction which has us thinking, “I could handle that”.
Cruise operators’ beguiling language entices us further, making luxury voyages sound even more inviting: “Leave footprints in the sand and cool off in crystal-clear waters, as calypso rhythms play softly in the distance. Who can resist the sun-soaked Caribbean?”
And it’s not just the Caribbean. Should you wish to venture further afield, one cruise operator offers what it calls “the journey you’ve always dreamed of. The journey of a lifetime, certain to ink indelible memories into your mind…”
The voyage comprises a 99-night cruise around the world and includes stops at 27 different ports, most of which promise wall-to-wall sunshine. Got your swimming trunks ready yet?
Highlighting the tax-free advantages equity release confer upon homeowners may not go down well in some political circles, especially in a world where politicians, appear to revel in finding additional ways to levy taxes. None the less, accessing a slice of your own money, tax-free, does feel like a genuine benefit.
Before you reach for the Factor 50, it’s worth knowing the process of releasing equity begins with a conversation with a qualified equity release adviser, who will take you through your circumstances, your objectives and the key features and risks before any application is submitted.
While the process is often straightforward, from advice to completion typically takes around 6–8 weeks, allowing time for the lender’s checks, the property valuation and the legal work to be completed properly before funds are released.
As Britain struggles back to work, contending with storms, bitterly cold winds and several inches of snow, the Caribbean looks a particularly attractive alternative. The concept of using tax-free wealth released from your home to enjoy a carefree Caribbean cruise is one with which thousands of folks will wish to explore further.
It should be noted that releasing equity from your home could affect your entitlement to means-tested state benefits. Holding the released funds as cash savings may also have tax implications, depending on your personal circumstances. Conversely, releasing equity could reduce the value of your estate, potentially minimising any future inheritance tax (IHT) liability.
