Work doesn't pay

You've got an awful lot of kids if a £10k payrise is negated by the loss of CB 😆

If OP is going from 50000 to 60000 and has three kids then yup you get no more as you lose your CB. Wouldn’t sting so much if homes with double £50000 incomes didn’t keep theirs.

No idea as the op is refusing to give that information so it could be loss of benefits or earning over 100k...

No it doesn't. Show us the numbers/comparison to previous months.

The pensions trick doesn't just work for 'high earners', incidentally. Income paid into a pension isn't counted as income when calculating UC entitlement.

UC can of course still be payable even to 40% taxpayers in some circumstances, such have we allowed property costs to spiral, and 'high earner' is a subjective term. But I presume there's general agreement that many UC recipients are very low income.

Do people not checl this befote taking a job/promotion? I always use a salary calculator to make sure i know what my extra take home will be to then devide if its worth it

Even on standard tax/NI, the net gain on additional income for people on UC is only about 30%.

On £100 gross, they lose £12 in NI and £20 in tax, leaving £68. Then 55% of that £68 (£37.40) comes off their UC, leaving them with a net gain of £30.60.

It must feel the same as paying tax at 70%.

One of my friends couldn't afford to go back to work f/t after her mat leave. She was going to be significantly worse off after paying childcare costs, and their income was too high for help with childcare (this was in tax credit days, pre UC).

We worked out that if she went back to work 3 days pw, her income would be below the level at which her student loan repayment threshold, leaving her with proportionately more net pay, and she saved 40% of the childcare costs as well.

Ah ok, sometimes hard to tell on here 😁

@Nordicrain true, I was being a little sarcastic in my response to another poster!

Sucks doesn’t it?

I’ve lost my child benefit (never have been able to claim other benefits) and now pay ££££ in tax/NI a month…

However if your a good wage earner your not allowed to complain on Mumsnet 🤷‍♀️🤦‍♀️

Your tax doesn't support "mega high" earners putting more in their pensions. Their own tax does that. It doesn't cost you anything. And it's to inccentivise pension savings to reduce the amount of old people who can't pay their own way/ survive on the state pension. They will also pay tax on their "mega high" pensions. It's not milking the system in the slightest.

You lose it gradually. So effectively between 100 and 125k you are taxed at 60% in real terms (40% + the gradual loss of the PA)

@Purplecatshopaholic I agree - and I can see that from the perspective of a woman in my late 50s. I'll be claiming my occupational pension soon, I've got private pensions too and i can see the reward for taking promotions and working to capacity.

It's harder for people to visualise that reward when they're younger though.

@Trez1510 Id always assumed my tax went to support people who genuinely need it- not those on mega high incomes, or those who choose to work part time or won't accept promotions that are offered to them because they don't want to lose benefits

Sometimes this sort thing happens, eg tax, bens etc impacting on the pay rise, and you end up (usually only a little) worse off for a period. Surely it’s short term pain for long term gain though - in time you go for another promotion, and/or get a higher paid job?

Perhaps the answer is to bring the cliff-edge much, much closer to the average salary rather than six-figure salaries?

I'd always assumed (as a net contributor - no kids/no benefits) my tax went to support those who genuinely need it to survive. Not people on £100k+ salting a disproportionate amount of their salary away to ensure they still received state benefits funded by me on a far lesser income (retired, now).

By feathering your own, personal, pension nest with extraordinary amounts in order to ensure you continue to receive state benefits by 'pretending' your income is much less than it actually should be if you weren't feathering your own nest .....

HTH.

Shes right. See the article in the Telegraph today. The public sector pay rises need to be paid somehow.

This thread has been an eye-opener for me. Very high earners milking the system to feather their own (pension) nests. Possibly the same people who, in future years, will bang-on about 'scroungers' .....

That's my point: a system which encourages people to game it doesn't really work for anyone, high or low earners.

If I'm doing a low paid, perhaps pretty grotty job, and I can find a way of working the minimum hours to get top ups- I'll probably take it.

Equally if I'm working in a high earning high pressured role, and I can find a way of keeping my tax lower so the more of the money I earn is mine- I'll probably take it!

We're all human. We can bang on all we like about the morality of it or the satisfaction and sense of achievement of earning all your money rather than relying on benefits, but at the end of the day, people generally want to feel that the harder/ more they work, or the more responsibility they carry, the more they'll be financially rewarded. Not just in the future but now.

A pp said upthread that the bottom line is, the lowest paying job should leave you with significantly more money than relying on benefits. There should be a tangible difference. I'd add to that: the hours someone puts into that lowest paying job should be proportionate to their net pay. It's bloody ridiculous that someone capable of working a normal 37 hour week doesn't feel the financial rewards are enough of them, and can make the choice to work far fewer and get top ups. It's bonkers.

“Milking the system” do explain?

I don't get the 100% tax thing but high earners can end up losing a shit ton.

My brother is on 400k and probably takes home half of that

He still gets 200k a year net so I can't cry too hard for him

What was you old wage and what's your new wage?

There are certain pay rises that aren't worth it, particularly if you just edge into a new tax bracket.

This is where you would negotiate your pay up.

Ok, if you don’t want to take my word for it (or that of another poster above), just put the pay rise into your pension and carry on as you are now!

“When paying more into your pension will save you money”

https://www.thetimes.co.uk/article/fa80e212-e5ab-11ed-a169-35bcc1d1a374?shareToken=a84abb6b81fed5c7895348909cde58a6

You're mixing up two things here. Yes, there's obviously a bigger picture. As there is for most people when it comes to whether it's worthwhile working more.

That doesn't mean someone airily claiming there's no issue when a person is no better off after everything is taken into account has 'nailed it'. They've done the exact opposite. The fact that OP is even considering not taking the promotion, or that people have advised her about other options such as higher pension contributions, is evidence of that.

Surely this can happen. It happened to me once. I got a decent pay rise but the increase in my pension contribution, student loan payment, tax etc meant I was taking home £13 a month more for a lot more work and stress