To not understand how people fund their lives and feel a bit jealous?

I’ve been thinking on this more and trying to figure out why you’re so furious.

You keep saying your household income is £35k, which is below the average UK salary (even if we exclude extra free hours of childcare funding/ tax free childcare/ child benefit). However, if a lone parent and earning this you’d have very good reasons to be frustrated at the system because you’d be being taxed much more than a couple both working who had the same household income.

But you also have said “us” in several of your posts, which implies there are two adults in your household. And you mentioned the child benefit rate for just one child. Therefore, your childcare costs will be quite low given the funded hours and tax free childcare and child benefit you’ll be receiving, and only one child to pay for, and all earnings being either tax free or in the lowest income tax band. Also, if there are two adults in the household, why is your income less than 2 x full time minimum wage (which is £25,397 per person so £50,794 for two adults even if both earn this bare minimum per hour)?

What has happened to the additional £15,794 of earnings that you’d have if you both worked full time, even if you both earn minimum wage?

It’s a bit much to be angry at other people about your financial situation when it’s clear even from the minimal information you posted that at least one of you is choosing to work part time hours. You’re perfectly within your rights to make that choice, but not to then be angry at others who are working as hard as they can full time to get promotions, or have done more training and studied for more qualifications, and therefore obviously will earn more than two people who aren’t even working full time for the minimum wage. Working part time is a luxury and if you’re struggling with money as a result it’s hardly a reason to be cross with other people.

A couple more articles on the topic, from different sides of the political spectrum:

https://iea.org.uk/blog/the-marginal-gains-from-working-for-uk-families

https://www.resolutionfoundation.org/publications/inconsistent-incentives/

Although both are only partial analyses (because of their opposite political biases) so exclude some of the most extreme effects that don’t fit their narrative, which push the marginal rates at both ends up to much higher percentages than they discuss, for the reasons I’ve explained in earlier posts.

The fact is that if people on completely opposite sides of the political spectrum with opposite agendas are identifying problems which are all part of this same distortion and the disincentives to work that it creates, the economic harm it’s doing through lower workforce participation and tax revenue, then surely at some point enough of the UK electorate need will realise that this is one of the main reasons their own living standards are declining year on year even if they are not personally affected by it in terms of net pay, and will vote for it to be changed because they want to live in a country that has rising living standards and sufficient tax revenues to fund basic services?

Clearly, based on this thread, my hope is ridiculous and this won’t happen. So cheers to more decades of decline.

Correction! The £880/ 0.72 is £1,222 of gross salary that the £35k earner has to use to pay full time childcare for two children, based on average UK rates. I’d incorrectly divided the 2000 by 0.72 instead of the already-reduced amount of £880 because of the additional 15 hours of childcare funding.

So nursery costs for two children equate to £10,000 per month of gross salary for people who have the “free hours” and “tax-free childcare” withdrawn, sometimes more. Sometimes they have to increase their salary by 50% just to get back to the same net earnings that they had before earning £1 more due to the tax trap at £100k.

Whereas the exact same nursery provision for someone earning £35k will cost them £1,222 per month of gross salary.

For someone on universal credit, the net childcare cost they’d pay after the 30 funded hours and the 85% of childcare funded by universal credit is £165 per month. That will cost them £201 of their gross salary, assuming they are earning enough to pay national insurance and income tax at the basic rate at all.

Also none of my posts were about my earnings. I didn’t say I earn £180k. I might earn substantially more or less than that. I’m not the OP.

I’ve been talking about economic facts and how these impact behaviour and tax revenues and living standards at various different levels of the economy. None of my posts have been about my own situation, so please stop trying to misrepresent things.

Who has said anything about your personal situation? I haven’t seen a single person do that. You haven’t provided enough information for anyone to do an analysis of that. Given your repeated posts I offered to do so if you wish to provide the personal data required which would be whether you are single or live with a partner, gross earnings for each adult in the household, how many children, total childcare costs, rental/ mortgage costs, the area you live in.

Nobody has made any personal comments to you as far as I can see, despite you making extremely rude and insulting comments to and about other posters.

This really is not the way in which to conduct yourself in a debate about factual matters and economics, or indeed any interaction with anyone else let alone complete strangers.

I understand that you may be very frustrated at your own situation. Many people are, for a variety of (all perfectly reasonable) reasons. However, solutions to these problems won’t be achieved by being so unpleasant and hostile to others and accusing them of commenting about your personal finances when I don’t believe anybody has done so at any point in the thread. I’m happy to be corrected on that if I’ve missed something and you can repost the comment where you believe someone has made comments about your personal financial circumstances but I can’t see anything of the sort from looking through the thread myself. All I see if you being very unpleasant, rude and insulting to other people, swearing and then making nasty and irrelevant comments about disabled children.

And yet you accuse me of poor reading comprehension. The mind boggles.

Whats incorrect? I'm talking about myself not some mythical "they". 35k income and only receive child benefit (you want to swap 25 pound for 180k salary?)
35k isnt even that low I know people a lot worse off than me so there's no "only" about it and im Not looking for sympathy just explaining my own situation seeing as you're hellbent on saying everyone with less than 50k income is getting bucket loads of benefits

You've done so how? All you've done is accuse me of hating disabled people because I mentioned how I've seen posters claim all on low incomes are getting bucket loads of benefits and then using an example of one family but failing to mention that family has disabled children they receive disability benefits for. Seeing as you've accused me about ten times of hating and resenting disabled children I'd like to see you actually explain how and saying "I never mentioned disabled children in my calculations" isnt an explanation seeing as my original comment wasn't in response to any of your ramblings.

Youve been extremely disingenuous twisting my words trying to make me look like I hate disabled children but I'm apparently the big meanie for saying horseshit ?😂

And if you really think life is so much easier with 30k and its sooo hard on 180k than you are welcome to swap with me 😉

I’ve already done so, twice.

That’s incorrect. They receive child benefit, additional childcare funding, tax free childcare and in many cases are also eligible for universal credit if they have childcare costs and/ or pay rent.

There isn’t a cut-off level of income for universal credit. I agree that it is extremely unfair that it funds rent for renters and therefore penalises those who have saved and worked and put themselves at risk by taking a mortgage.

However many households with only £35k income are indeed receiving universal credit, even if they have a mortgage, and they are having 85% of their childcare costs funded while other families who are subjected to 80%+ marginal rates of tax are having to fund childcare costs in full at a cost of over £2000 per month for two children from net pay i.e. at that tax rate they have to earn another £10,000 per month in gross pay to pay this monthly cost and end up with the same disposable income.

Others who don’t qualify for universal credit but get the additional 15 hours per week of childcare funding plus tax free childcare pay £880 on average per month for two children in childcare while someone with a higher gross salary will have to pay over £2000 for the same. But instead of having to earn £10,000 gross salary to receive that 2,000 (2000/ 0.2), someone earning £35k only has to earn £2,564 gross salary to earn the £880 (880/ 0.78).

If you refuse to accept that tax rates and subsidies make this substantial difference to net income which means that a gross salary figure is meaningless, despite all of the evidence and calculations provided to you which prove that they do, then I don’t think there is any possibility of a rational discussion with you.

I haven't ready 23 pages, no. However, are you seriously saying its remotely believable that someone who earns almost 200k and is planning a 15k holiday can't afford a pair of shoes? Nothing to do with me being clueless and all to do with very basic logic.

Can you explain what about those comments makes you think I'm "attacking disabled people".

It was an observation that many examples posters have of families recieving thousands of top up benefits but fail to mention there's more to the situation such as multiple disabled children. And my original comment was not a response to one of your comments so your "calculations" were irrelevant to my comment.

As for me being "rude and pleasant" to you, you accusing me of hating anyone richer than me or disabled when I've said nothing like that is far more rude.

It’s certainly not regressive at all. Quite the opposite if you actually look at the reality of it per the graphs posted above.

You are confusing the wealthy - who do not live on earned income - with those with high salaries.

The wealthy have capital, and pay very low rates of tax. As I pointed out earlier in the thread, there’s a very strong moral argument for taxing them more but it is impossible to implement without dire economic consequences without international cooperation, which will not happen currently.

Higher earners in terms of salaries who are not wealthy at all in terms of capital by any means have been the ones carrying this country for the last two decades with some of the very highest tax rates in the entire world. The scope for penalising them further has been exhausted, hence the declining productivity rates because of the marginal rates of tax particularly from £60k upwards often exceeding 80% when you factor in student loans (effectively another 9% tax) and withdrawal of child benefit. Once they reach £100k, the marginal tax rate goes over 100%. It can be 20,000% or higher (i.e. you earn £1 more and lose £20,000 in net income). Nobody is going to do that, are they?

No other country designs their tax system like this, and this is one of the key reasons why UK economic growth and social mobility and productivity have been in reverse for some time now. Until the tax and benefits systems change this will not change, the disincentives to work will continue and living standards in the UK will continue to decline.

I’ve explained it all as clearly as I can.

Here are some graphs that help to explain some of the problems in a simple visual format.

https://taxpolicy.org.uk/2024/10/17/reform-income-tax-end-the-scandal-of-high-marginal-rates/

Honestly, this isn’t how other countries structure their economies, for very good and - I hope - very obvious reasons.

Everybody needs to be contributing to a pension. Criticising people for doing this, which is basic responsibility, is crazy. I’m sure you’d be the first to criticise someone who’d been earning £180k per year if they got to state retirement age and had made no provision for themselves.

One of the main reasons our economy is screwed and all public services are trashed now is because so much money is being spent on the irresponsible generation who came before us - who despite knowing about the demographic shifts that were happening and living through the biggest economic boom in history - didn’t bother to save for their retirements, voted for tax cuts based on stripping national resources and now expect working-age people to fund early retirements, healthcare and social care for them rather than making provision for this during their working lives.

We need to direct public spending away from the elderly and towards the young and education and infrastructure. We have to address the state pension and public sector ponzi schemes as the “promises” they’ve made are literally unpayable. Meanwhile, we have declining birth rates due to such family-unfriendly tax policies which will exacerbate this situation even more. No Government wants to be the one to deal with the hot potato which is now hotter than the Sun so they all try to pass it on, but the longer this is left unaddressed the more painful it’s going to be when finally the large grey animal with the big ears and trunk has to be acknowledged.

Look at current UK Government spending. £314bn on welfare, 42% of which is the state pension, so that’s £132bn per year. £202bn on health 85% of which relates to the elderly so £172bn per year. Debt interest (that the generation in question ran up during the longest boom and period of peace in history by overspending on themselves) is now £105bn per year. That’s £409bn per year spent on this cohort. That doesn’t even include social care costs, btw, or public sector pensions. As well as Council tax, a further £87bn of Government funding goes to Local Councils the vast majority of which goes on social care for the elderly.

Meanwhile total education spending is only £94bn. Defence is £56bn. Science and technology is only £13bn. The whole justice department is £13bn and housing receives just £12bn.

It doesn’t take an economic genius to see where the problem lies and that the piranhas have and continue to bleed the country dry, so rather than attacking other working-aged people who are also working very hard to improve living standards for their own families and children and for the future of the UK, and driving them out of the workforce with penal tax rates or to move abroad to escape them, it might be more productive to engage with and support a programme of change redirecting public spending from the old to the young so that living standards can rise and this country has a future.

@Travelenthusiast on an international level we are so lucky , I’m very , very aware of this.
We seem to be outliers where we live though , absolutely zero help financially from parents/ family ( my ils could even take money off us given half a chance) , zero practical help, no one has even minded our 4 kids for 5 mins and they certainly have never wanted to. Fair enough , absolutely their choice🤷‍♀️
I mean you even mention you’ve had some help financially so have plenty others . We won’t get a penny in inheritance but I know plenty who have and will so that can be a big lump sum so helpful I guess…
I think loads of people have family wealth that they don’t talk about. We have friends revocating a huge barn in a very expensive part of the uk and they are both freelance but in very much hobby jobs, they are not bringing in much money and both are from extremely wealthy backgrounds, they never talk about where they are getting their money (and they absolutely don’t have to tell anyone ) but do allude to saving and that their recycling and upcycling is making savings for them to renovate , I mean 😂
They also don’t have a mortgage, it speaks of their privilege that they don’t seem to realise that everyone would know how much of a mortgage and money the project which I image will be in the region of 700k really once don’t entails !!! Lots of people have help and won’t say and them there are those who have deph , other people might live very frugally really and actually save.

The tax system we have in this country is regressive - you only need to peruse the ONS for the figures as to who pays yhd most tax relative to their income (and it isn’t people earning six figures plus) . But to argue that the system isn’t working for big earners is laughable.

But if we REALLY want to do something about our taxes perhaps we should be looking at the fact that the Uk is a tax haven for the Super Rich - the likes of Rishi Sunak getting away with pays almost nothing.

Do you not understand this is the point I am making?

I don’t know your situation but the tax system is completely irrational and harms economic growth, lowers tax revenue and discourages work and therefore makes everyone poorer.

Student loans should not exist. Lone parents shouldn’t be being taxed more than another household unit with the same income. It makes no sense for taxes to be levied on an individual basis and benefits to be administered on a household basis and creates huge economic distortions.

I don’t know your personal financial circumstances and have made no comment about them and am not in a position to do so because I don’t have sufficient information. You are quoting numbers about net income but without knowing how much of housing or childcare is funded also no meaningful comparison would take place. £2,700 net income with barely any housing costs or childcare to pay would be a very different situation to those being largely funded for you. Headline gross earnings, or even post-tax and NI and pension earnings, do not provide a basis for meaningful comparison unless essential housing and childcare costs (without which work could not happen) are also factored in leaving the “real” net income figure of disposable income that people have to cover their other living costs.

In some cases, yes, someone earning a far higher gross salary will as I have shown end up with a lower income than people earning minimum wages because of these distortions. I didn’t say that was the case in every possible circumstance. The situation disadvantages single people and lone parents in particular. If you’re a lower earner and a single parent you’re screwed over just as the higher earning single parent is. I can’t provide an example for every possible circumstance that exists, especially without knowing people’s individual details. The point is that for there to be economic growth, incentive to work more, and therefore higher tax revenues and better funding of services huge reform of the tax system is essential so that 1) households with the same income are taxed the same amount and have the same subsidies; and 2) that when people do work more hours/ study more/ get promotions their net income after essential expenses rises by a sufficient amount that they are incentivised to do so, otherwise at all levels of earnings obviously they will not bother to do this.

@Samslaundry here, again, are some direct quotes from posts you made about disabled people and disabled children in particular, which had nothing to do with this thread and nothing to do with the numbers that I posted because, again, no disability allowances for disabled children or adults or non-working parents were included in my calculations at all, and the main post had nothing to do with disabilities, so it was very strange that you went off on these rants about disabled children when they had nothing to do with either the OP’s post or the numbers that I’d provided. I think perhaps someone’s been reading a little too much Daily Mail or Daily Express to be able to have a rational and objective view of the economic facts and I am bemused why you continue to keep bringing this up when nothing in any post I’ve seen on this thread other than your own said anything about disabled people. It’s very unpleasant for you to have made such comments and I think you should apologise because people who are disabled or who have disabled children may well be reading this and you made these totally irrelevant attack on vulnerable people for no reason whatsoever.

You keep saying that people have made comments about your personal situation but I’ve read back through the thread and can’t see any at all. You are the one who took comments about economic policies personally and said that examples provided were “horse shit” alongside many other instances of swearing, personal attacks and unpleasant language, simply because the situations being discussed for comparative purposes weren’t identical to your own. I can’t see where anybody has attacked you for your personal situation or told you that you’re better off than other people who earn more, though you’ve claimed this in several comments. I may well have missed this in the thread as it’s now rather long.

Can you repost the comment where somebody told you that you personally are better off than somebody earning significantly more than you? If you do so - and it’s untrue - I’m quite happy to provide an analysis with actual numbers based on the tax and benefit rates to prove the case for you that you’re not better off than whatever posted you’re saying has claimed that you are despite them earning significantly more than you are.

There really is no need to be so rude and unpleasant to people as you have been, but no, I haven’t and won’t be reporting your posts as I think it’s better to leave the thread in tact so that people can see exactly what different posters have said and who has been reasonable and rational, or not.

Also, I have a student loan, which I have to pay.. 2. And I don’t get childcare costs. Maximum additional benefits I would receive if I claimed them would be less than £800 pcm. Which would bring me to around £2700 pcm. (Not including the student loan I have to pay)

It doesnt even come CLOSE to someone earring £180000.

And then pension is for them in later life and is a choice. They won’t be scrabbling around on a pittance when they retire.

No one is buying this.

You've already been told by myself and other posters on household incomes 30-35k that we don't get any "top ups" except child benefit (you know it's only 25 pounds right?).

You're so hell bent on your narrative that a household with 180k income is worse off than a household on 30k income it's actually laughable.
And like I said it's not just rich people who have mortgages I've also got a mortgage to pay and benefits do not help out with mortgages. You haven't addressed this though probably too busy deliberately misinterpreting my comments to claim I hate and resent disabled people and rich people it's actually irritating which I'm sure is your intention.

But if you seriously think anything I've said is "attacking disabled people" feel free to report my comments and I'm sure they'll be deleted

Sorry, £6,459 per month. Then I factored in additional benefits (child benefit, additional funded hours of childcare, tax free childcare) for lower earners. I also provided a comparison to those renting and earning minimum wage who will receive universal credit, have most of their rent paid for them, and have 85% of their childcare funded for them. Given that the two largest outgoings by far for working parents with young children are housing and childcare costs, the fact that a two parent family have both of these costs almost fully funded by the state even though they have 48 hours per day to do what the lone parent is trying to do in only 24 hours means that the lone parent working full time has less money after tax, childcare and housing costs than the couple earning minimum wage. This is a fact.

It is so boring to go over this repeatedly. Our tax system and our entire economic system needs to be changed, and this can be done in a largely fiscally neutral manner on a gradual basis which will then enable rising living standards in the UK again, for all of us and our children.

If people don’t vote for such policies, or pressure politicians to even propose them (there’s not been anybody to vote for in the last 4 or 5 elections who has a sensible manifesto - all totally politically motivated and devoid of any economic reality) then nothing will change, and UK living standards will continue to decline, and any talented/ ambitious young people will continue to leave making the situation progressively worse.

I don’t understand why anybody would want or continue to vote for policies which will hasten such an outcome, as all policies proposed by all political parties in the UK currently will do.

No. Only if they had no student loan (highly unlikely to get a job paying that with no degree) and were making no pension contribution at all (which would be hugely irresponsible). I provided all of these figures in my like-for-like comparisons. If we add a sensible pension contribution of 15% (far less than than made on behalf of most public sector workers which is generally in the 25%-30% range - and can you imagine the outrage if someone earning £180k got to retirement and hadn’t provided for their own pension?) and a student loan on plan 2 then their net pay per year is £78,593, or £6,459 as I stated in the examples that I provided.

Oh come off it. If only one of them was earning the whole £180000 that would equate to just over £107,000 take home a year.

Thd vast majority of people csn only dream of that amount of money.

My take home (and I’m full time employed by a local authority) is less than £22000.

Give it a rest with ‘the big earners are SO POOR’