Package 'p0bservations'

Calculate UK income and/or National Insurance taxes

Description

This function applies the prevailing tax bands and rates to give a simple calculation for UK Income Tax and National Insurance (to the nearest couple of pounds). Please note that these are approximations, so do not rely on them for financial returns or planning. The output is a list, containing the following measures: 'income_net' for the net income (after Income Tax and National Insurance); 'income_tax' for the Income Tax liability; 'ni' for the National Insurance liability; and 'total_tax' for the combined Income Tax and National Insurance liability.

Usage

liability_tax(income_taxable, tax_year_end)

Arguments

income_taxable	The taxable income level (i.e. after deductions for things like pension contributions).
tax_year_end	The calendar year in which the tax year ends, as a YYYY integer. For example, tax year 2023/24 would be 2024.

Examples

liability_tax(
  income_taxable = 38000, 
  tax_year_end = 2024
  )$total_tax

---

Calculate the probability of retirement ruin

Description

This function uses the Milevsky-Robinson to analyse the probability of retirement ruin, by parsimoniously meshing investment risk and return, mortality estimates and spending rates without resorting to opaque Monte Carlo simulations. For further details, see: Milevsky, M. and C. Robinson; "A Sustainable Spending Rate without Simulation"; Financial Analysts Journal, Volume 61, Number 6. (2005). Please note that these are approximations, so do not rely on them for financial returns or planning.

Usage

probability_ruin(
  return_expected,
  return_sd,
  life_remaining_expected,
  rate_spend
)

Arguments

return_expected	The expected real return of the entire pension portfolio
return_sd	The projected standard deviation of the returns of the entire pension portfolio
life_remaining_expected	The median projected remaining lifespan of the individual in question
rate_spend	The annual spending rate applied by the individual to their pension portfolio

Examples

probability_ruin(
  return_expected = 0.07, 
  return_sd = 0.2, 
  life_remaining_expected = 28.1, 
  rate_spend = 0.05
  )

---

Calculate the spend rate for a given probability of retirement ruin

Description

This function uses the Milevsky-Robinson to analyse the spend rate for a given probability of retirement ruin, by parsimoniously meshing investment risk and return, mortality estimates and spending rates without resorting to opaque Monte Carlo simulations. For further details, see: Milevsky, M. and C. Robinson; "A Sustainable Spending Rate without Simulation"; Financial Analysts Journal, Volume 61, Number 6. (2005). Please note that these are approximations, so do not rely on them for financial returns or planning.

Usage

probability_ruin_rate(
  return_expected,
  return_sd,
  life_remaining_expected,
  value_probability_ruin
)

Arguments

return_expected	The expected real return of the entire pension portfolio
return_sd	The projected standard deviation of the returns of the entire pension portfolio
life_remaining_expected	The median projected remaining lifespan of the individual in question
value_probability_ruin	The desired probability of retirement ruin (which is used to solve for the corresponding spend rate)

Examples

probability_ruin_rate(
  return_expected = 0.07, 
  return_sd = 0.2, 
  life_remaining_expected = 28.1, 
  value_probability_ruin = 0.1
  )

---

Get the latest annuity rates for the UK

Description

This function retrieves data on UK annuity rates from Sharing Pensions. Rates are available for different specifications and ages. See the website for further details. Please note that these are approximations, so do not rely on them for financial returns or planning.

Usage

rate_annuity(value_age, value_specifications)

Arguments

value_age

These are the choices for the age of the annuitant, namely: '55', '60', '65', '70' or '75'. The ensuing annuity rates imply that the annuity begins to be paid immediately and thereafter on a monthly basis.

value_specifications

These are the specifications available, varying by: whether the annuity is on a single basis or a joint basis (and, if so, whether the last remaining spouse receives half or all of the annuity); whether the annuity is guaranteed for ten years or not; and whether the payments will escalate at 3 single_simple single, level rate, no guarantee single_guaranteed single, level rate, guaranteed single_escalating single, escalating rate, no guarantee half_simple joint, half upon first death, level rate, no guarantee full_simple joint, all upon first death, level rate, no guarantee half_escalating joint, half upon first death, escalating rate, no guarantee

Source

<https://www.sharingpensions.co.uk/annuity_rates.htm>

Examples

## Not run: 
rate_annuity(value_age, value_specifications)

## End(Not run)

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Stop the function the value entered is (or is below) zero

Description

Error function to stop the function if the value entered is (or is below) zero

Usage

stop_not_positive(value_entered)

Arguments

value_entered

The value to be error-checked by the function

Examples

## Not run: 
stop_not_positive(value_entered = age)

## End(Not run)

---

Stop the function if zero or more than one value is entered

Description

Error function to stop the function if zero or more than one value is entered

Usage

stop_not_scalar_double(value_entered)

Arguments

value_entered

The value to be error-checked by the function

Examples

## Not run: 
stop_not_scalar(value_entered = age)

## End(Not run)

---

Key income tax parameters for the UK.

Description

A dataset containing the main tax parameters used for calculating net income for the UK (outside of Scotland).

Usage

tax_parameters

Format

A data frame with 3 rows (one for each tax year) and 14 variables:

year_tax_end

the calendar year in which the end of the tax year occurs

level_ni_lower

the lower level breakpoint for National Insurance

level_ni_upper

the upper level breakpoint for National Insurance

level_allowance_lower

the lower level breakpoint for personal allowance

level_allowance_upper

the upper level breakpoint for personal allowance

level_tax_higher

the income breakpoint for higher rate income tax

level_tax_upper

the income breakpoint for upper rate income tax

rate_ni_lower

the lower level tax rate for National Insurance

rate_ni_upper

the upper level tax rate for National Insurance

rate_allowance_drop

the rate at which personal allowance drops after 'level_allowance_upper'

rate_tax_basic

the basic rate of income tax

rate_tax_higher

the higher rate of income tax

rate_tax_upper

the upper rate of income tax

rate_tax_sales

the rate of sales tax, also called VAT

Source

https://www.crunch.co.uk/knowledge-tax/tax-rates-thresholds-and-allowances-for-current-tax-year/

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