Reference no: EM133102242
Gordon is a health care assistant living in Belfast, earning £20,000 a year after deductions for tax, National Insurance and pension contributions. He is about to move into a flat with his boyfriend Dale, who has a 15-year-old child, Isla. Dale is a chef and earns £18,500 a year after tax and National Insurance. He also receives £21.15 a week in child benefits. No-oNo onene described above has any other source of income.
a. Using the Household income equivalence calculator, calculate the annual equivalised net income of Gordon and Dale's new household together.
b. With the aid of the same calculator, comment on how their individual living standards have changed compared to when they were living separately.
c. Draw up an average monthly cash flow statement using the expenditure information in Table 2 for Gordon and Dale in their new shared flat.
Table 2 Expenses in new flat
|
Expense item
|
Amount (£)
|
Period
|
|
Rent
|
1100
|
month
|
|
Food
|
120
|
week
|
|
Council tax
|
220
|
quarter
|
|
Leisure
|
200
|
week
|
|
Phone
|
60
|
month
|
|
Transport
|
280
|
month
|
|
Credit card repayments
|
160
|
month
|
|
Utility bills
|
380
|
quarter
|
|
Clothes
|
50
|
month
|
|
Other
|
130
|
month
|
d. Gordon and Dale want to save up to get Isla an electric motorbike when she turns 16, and they estimate they will need £2,000. Comment on their current financial situation and consider potential adjustments they might make to their cash flow in order to save the £2,000.