Work doesn't pay

It's not really unbelievable though, is it? People wanting to see the benefit if they work more is actually pretty normal behaviour. Hence this whole discussion. The fix needs to be systemic, because berating people will do the square root of fuck all.

This is what's wrong with the benefits system; people who are earning a decent wage feel hard done by because the state is no longer providing them with support that they no longer need, and instead they are actually having to work for their money. Unfeckingbelievable.

And for all the finger wagging, it's incredibly obvious why you'd just stay where you are for now and perhaps increase your pension contributions a bit. Your effective marginal tax rate wouldn't justify the effort.

The existence of these perverse incentives is a bad thing for society as a whole, because we lose out on labour. The sooner we all understand that, the better.

Rubbish.

For the record, not everyone chooses to do the things that boil your p*ss.

I went part time to look after DC the other days. I didn't choose to do this for lifestyle reasons. I did this because in our income bracket we get ZERO benefits, whether we both work or not. If I worked full time, with what childcare would cost us I would be paying to go to work, which someone else looked after my child. Financially, it makes no sense for me to work full time at the moment. But I still pay tax. I still pay NI. I still contribute to my own pension and retirement pot. I'm not benefitting from YOU working full time at all.

Not everyone is doing it to sponge off you.

Was it only a small payrise but it's taken you into the next tax bracket? I.e. you've gone from 49k to 51k and now it feels like you're only getting the same but in reality it's about 20 quid more? Any decent payrise would show something in your take home, not nothing at all.

Thank you for all of that information! That is good to know and have bookmarked the sites you shared. 👏👏

Totally get it. I managed to get a 10% pay increase this year (thankyou very much nice boss), however It wiped out all my tax credits so I am, wait for it, £25 better off a month.
I'm happy to no longer be on benefits but with cost of living increases I could just cry. It's so rubbish.

68% can be 68 +9% for those with a student loan too as the student loan rate is 9% so that is pretty high a rate. We have the highest taxation burden for 70 years at present - so high Keir Stamer has said he will not increase it (although sadly nothing about reducing it or anything sensible like letting you put childcare costs against tax if you work full time)

Yes - I'm in this position as a single parent, working full time for £53k, with substantial childcare costs and a fairly average rent for my modest and slightly overcrowded flat in a not-too-desirable corner of London.

I get a bit of UC for which I'm grateful, and which is an indication that by some equation I'm considered not to earn enough for my family's needs. And at the same time I pay back some of my CB, which is an indication that by some other equation (or - maybe - some very outdated arbitrary threshold) I'm considered to be a high earner. Meanwhile my employer expects me to turn in the kind of unpaid overtime they associate with a role paying relatively well in comparison with the national median etc.

My tax and NI contributions far exceed my UC and CB, although I imagine when you take into account the benefits in kind I receive (state schooling etc) I'm currently still getting out more than I put in.

I've deliberately chosen to avoid promotion until my children are old enough that my childcare costs drop dramatically, even though professionally I'm very ready. My next promotion would take me to £62k-ish, and my employer's expectations would increase accordingly, but the effective tax rate is huge. There's a real bottleneck in my profession after that point, and I wouldn't expect to take another promotion for at least 5-6 years. My life is demanding enough, I'm not prepared to tip myself over the edge for the sake of an extra £20 a month and the warm glow of being entirely out of the benefits system.

As in that article linked on the first page - this group should in no way be the priority cohort for whom the tax and benefits system needs remedying. We're not the heating vs eating households. But it is fucking stupid and I totally get where you're coming from OP.

Can you do a salary sacrifice on the extra before tax into your pension? So although you won’t benefit from the pay rise right now, you will get it down the line, rather than being no better off with the tax bracket increase?

Sorry, I meant wrong to everyone who is saying it’s impossible she will take home less cash after a promotion

Wrong. 1) Marginal tax rates (the amount of the extra money from the promotion that she will pay in tax) can be as high as 68% because you lose child benefit as well as pay tax (source https://twitter.com/DanNeidle/status/1577215775659945984?lang=en#), so if she has gone from £50k to £51k she will take home only £320 2) She says she is working more hours so her pay per hour could easily be less than before the promotion (eg £50k/35 hours pw x 52 weeks = £27ph, £51k/40 hours pw x 52 weeks = £24ph), plus childcare could easily eat up the extra, it doesn’t take much childcare to cost £320

My husband hit this point for a period, promotion, payrises, take home worse off. Short term pinch though. Was worth it long term when he got promoted again and again.

To be fair, putting more money into my pension means I will be less of a drain on the state later on in many respects- can pay for my own care, won't likely qualify for pension credits, likely healthier as more able to have a better quality of life thus less money on NHS. And it will also mean I can continue to help my kids when grown to also mean less drain on the state. That is my plan. I do not, though, by doing that qualify for child benefits or any other benefits other than being able to get 20% gov help towards nursery costs through paying money into a childcare tax account. I've never otherwise qualified for, nor taken, any other benefit in my life beyond statutory maternity pay and even then I returned to work very early so didn't take anywhere near the amount I could've done. So I dont feel I am taking the piss at all. I also work ridiculous hours so very much not under effort on my part. I completely understand the anger though when people are purposefully working less and paying into pensions to qualify for a host of benefits they otherwise wouldn't get. I could easily work part time and qualify for all sorts and spend more time with my kids but I dont, and spend less time with them including working away, to earn more to pay for their present and their future including paying 40% tax on a chunk of earnings.

You don't lose it. Your Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. This means your allowance is zero if your income is £125,140 or above.

So it doesn't all go. Also adjusted net income is important to note - paying extra pension, for example, can mean though your net income would be over, adjusted it isnt thus preventing personal allowance from decreasing and also protecting things like childcare tax account eligibility.

It would be a very foolish person indeed who did not seek to maximise their household income calculating their pay against the various benefit/tax thresholds set up by the government.

Ask not what can Britain do for you, ask what can I squeeze out of this island while it is still afloat.

In practice @SoHereBesMe there is a 60% tax bracket. Though weirdly not at the very highest earning point:

https://www.buzzacott.co.uk/insights/exposing-the-60-income-tax-rate

Plus loss if other benefits like child support/free childcare can make it even higher z

This is the problem with Benefits. People get used to them and feel they are owed them. Your benefits will stop if you earn too much , it’s how it should be !

You can put the extra into a pension and retire a bit earlier or richer.

Not surprised, the more you earn the more tax, NI and pension you pay, therefore your take home is less. I recently got a 5% pay raise, I now take home an extra 80p an hour, after all these factors have been taken out. This works out at £24 a week extra. Hardly worth it.

I get why you're annoyed OP but wouldn't a more accurate thread title be 'Those earning less get more support from the government'.

Would it pay to reduce hours at work? Just a thought Xx

Pay more into an isa or your pension tax free to bring tax down . Eg if it takes you out of child benefit pay excess into pension.