Working more really doesn't always pay does it :(

[Redwineandroses]

Just a little whinge really. I was working 30 hours a week term time, as I'm a single parent and it fit around looking after my dc. Now they're older (teens) I thought I'll go for a job promotion at work.

I've been claiming tax credits to top up my income and when I got the promotion it was 37 hours per week, 42 weeks a year (as opposed to 39 weeks term time.) Tax credits reduced but the extra money I was earning evened out.

Then the opportunity for a further promotion came up, which is a full time position as in not term time at all, still 37 hours a week. So I went for it as it is a strp up and got it which meant my income went up and tax credits reduced significantly. So this month, after tax, NI and pension contributions I'm actually only just a tiny little bit better off.

The point I'm making is, I am now only just a little better off now working full time doing 7 more hours a week than I was doing 7 hours less a week and working term time 😐 Plus that's based on a lower april - march 22/23 estimated earnings (due to me earning less until I got my promotion/s in August/September)in comparison to what 23/24 will be, where I'll most likely loose all TC.

Nothing I can do and really just having a general moan because I was hoping to be better off as I'm struggling (like everyone), especially as I don't have a partner to get that second income for the house.

Just for a general guidance, I was earning around £14,500 for 30 hours term time which was topped up in TC. When I got the first promotion I estimated my earnings between April - March would be around £19,000 as it covered both jobs during that period. Then the further promotion I estimated between that period I'd earn around £22,500 which is when the TC reduced significantly. It is annoying having to estimated based on 3 different periods of working income!

Next April I can just give my current jobs annual amount (£28,000) without having to work it out/divide it up as I don't plan on changing jobs!

Not saying I shouldn't work for the income etc but you can see why people don't take on extra hours/go for job promotions!

Just think how much better off you will be when the kids are 18 and all the free money stops. And you have to pay full council tax when they don’t leave home
and count your pension contributions and the contributions your employer made, so you will have a decent income in retirement

Not really. You'll be paying more into a pension, have more available credit, don't have to worry about when you're moved over to UC as its all your own wage without needing top ups, which means you can have whatever amount of savings/inheritance you want.

And you would only be able to earn NMW when the kids are 18 cos of the huge gap in your employment history.
so, no free money, full council tax and a very poor wage. Sounds like a no brainier to me

Yeah I know, I am looking at it from the bigger picture, which is why I took the promotions. You can see why people don't though 😐

What gap in employment history?

Have you looked into whether you’d be better off on UC?
it’s calculated monthly so you don’t have to predict for the year. As your children were born before 2017 you’d get the higher child element too.
a lot of working parents who rent are better off providing they don’t have savings over 16k

The gap if you stay at low level job for many years.

Do you not feel better being able to provide your own income and not rely so much on the state though?

Oh I see. I've taken every opportunity to gain qualifications over the past 5 years as I've really wanted to better myself, hence how I got the promotion. But I see what you're saying about people who don't do that and end up screwed when their dc get to 18!

Very much so! It's what I've been working towards for the past 5 years, to get qualified to get a better job position 🙂

I guess my point was you can see why people don't take on extra hours or go for promotions

Congratulations on the promotions - you are doing really well.

It is hard now, but I agree with PP - you will reap the rewards of your hard work in future, when you have good earning potential and years of pension contributions in the bank.

My friend made a decision to remain part time due to tax credits topping up it was a while ago so legislation would have probably been different then. Her DS was 13 when the opportunity arose and it was at that point I thought the system was actually not working well. When people with no disabilities and no childcare needs could choose those PT hours.

Roll on 14 years and her pension is totally buggered. She complains a lot about money but she chose to have extra time off work and get supplemented.

To be fair it's not always people in part time work. I only got my better position because I got some qualifications which I was lucky enough to get free due to my work. In my old role I was doing term time, it was pro rata but the full time wage equivalent to it was only around 19/20 k a year. So still not even enough for a single parent to live off.

Yes, it really is more about moving to earned income than it is about increasing income - so you can understand why people with young children may not see the benefit. Obviously as your children approach adulthood it becomes more important.

I can see why people would choose time over earnings with a young family - particularly single parents.

Well if you hadn't received tax credits or any help you'd have noticed the difference more. Would you have wanted that or for others in your previous situation to get no help?

I know what you mean. I've heard this so many times from (including my sister) who were financially worse off going back to work. Like you said though, its the bigger picture, in 5 years time you'll be much more financially secure than you are now. My own dsis would still be in her little ha flat, but she has just brought her own house in a lovely area and has her new car parked on the drive. Its about the long game.

You previously had earnings plus benefits. Now you are getting more earnings and less benefits. To notice the difference more you'd have to have either had less or no benefits previously or to still get the same benefits no matter how much more you earned.
You wouldn't have wanted the first I'm guessing, so would you expect to receive the same benefits regardless of how much you earned?

I'm really sorry OP. I've said this for years since I did a short period working with the DWP.
When you take into account all the soft extra that come with being on benefits it would take a significant increase in income to make working (working more) worth it.

Free school means, help with uniforms and childcare, free prescriptions etc. these extra payments those on benefits are getting this winter for example ( agree people need them) but if you earn £1 over in the qualifying month you could lose out on £900.

Also there's the cost of working- transport, looking presentable, work clothes and make up etc.

Thing is they can't decrease benefits to increase incentive because people are barely getting by as it is, they can't increase minimum wage much as it pushes up the cost of everything. I can't really see a solution but given the mental health, pension and long term employment prospects I think it will be worth it, just not obvious at the moment.

It's a catch 22 isn't it. I wasn't entitled to free school meals or help with uniform, I think you have to be on a seriously low income to get that as in about 8k a year, and I worked term time so childcare wasn't an issue.

Work clothes depends on your job and whether your employer needs to provide it (PPE etc) and make up I wear anyway so don't buy it just got work.

I think people thought working from home would save them money but the cost of energy now means people are sat in freezing houses trying to work.

It's all just rubbish whatever you do!

That's not really the gist of my OP?

It is the bigger picture but I think for me the scariest part is being a single parent with no other financial help (such as parents) or a partners earnings to fall back on. It's me or nothing 🥴 And judging by online dating I'll be single for a long time! 😂

In the long term you will be better off, even if you aren’t in the short term. I can see why people wouldn’t want to increase their hours from little or no immediate benefit to their life.

Have you enquired to see if you may be entitled to a small amount of UC?

Well you are no longer being subsidied by other people
because you don’t need to be.

you received a benefit when you needed it that you now owe longer need

subsidies from the welfare state are not free - they are redistributed from others

there are of course many arguments about the fairness about where the redistribution comes from in the current structure

but bottom line other people were subsidising you when you needed it and now you don’t so they aren’t.

In the past, I have worked with some in your previous situation and what I took away from it was this, they never had any extra money to save; for a holiday, change of car, major decoration because their income was so limited to universal credit.
I could totally see their point, but it doesn't half restrict what you can do in life.