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!

@Heartonmysleevee support network is zero. Mum lives 70 miles away. Used paid childcare the whole time which cost the same as my earnings. Got topped up with tax credits and childcare fee support in the early days.

Son is almost 7 and I now earn well and have a mortgage in London.

If I chose to do 16 hours a week in a low paid role and rely on benefits then I would be in the same financial position as all those years ago. I don't even qualify for child benefit anymore.

Your pension will be much better

@Redwineandroses that really sucks. That's quite the jump in salary so really disheartening that you're not seeing any financial benefits. Many congratulations though - you have done so well for yourself and it will be wonderful to have a decent income without any assistance. You'll just have to make the most of the intrinsic rewards for the time being.

The purpose of the credit system is to take people on a low wage and raise them to a more liveable income. That sounds like what you had. Now you will get increased pension. You will be better off when your children turn 18. It seems like the system has worked for you.

@TeachesOfPeaches true there's lots of variables. I know on MN people assume promotions and pay rises but people often working part time jobs are not working in these sort of job roles nor have the qualifications. Some may get regular CMS there's many many factors.

Hats off to you too though! 👏

All of these false line thresholds are the problem. Ultimately it is right if you can work that you do though. We should not be subsdising people to stay at home because they feel its not worth their while to work when work is avaliable.

Personally I think much more help (particularly around childcare coats) should be universal and not means tested at all. People should be incentivised to work as much as they want to. Terrible brain drain particularly of women when they give up careers early because the numbers don't stack up.

People are going to respond to economic incentives, they prioritise that over other people's principles, and that's inevitable. Especially in a climate where so many are worried about money.

And we do have systems that incentivise that in the UK, both in respect of benefits and tax thresholds. Some households are affected by both! So people respond, as they're bound to.

My household don't claim top up benefits, only child benefit, but we make decisions about pension contributions and extra work accordingly. I work pretty PT around DC, and I earn just below the student loan repayments threshold. My hourly rate is decent, but it doesn't come out as a large salary because I don't work that much. Recently I was asked about something that would've required a few more hours work a week and would've taken me above the loan repayment threshold. The marginal rate there would've been over 40%, for earnings that are pretty low really, so I said no. Not worth me bothering. My loan has been sold off anyway, without my permission, so the prospect of putting in more effort to line the pockets of some hedge fund or whatever they are was not a tempting one.

The other reality that often gets overlooked is that some of us aren't capable of earning more than the minimum wage - we aren't "bright" enough and someone has to do the very many minimum wage jobs.

With all the hard work in the world we can't pass exams, can't manage people and just a bit rubbish at various things.

@Redwineandroses have you actually done a benefits calculator to see if UC would be better for you? You haven’t mentioned it in replies.
some people are pleasantly surprised at how it works out but avoid it due to the horror stories on the news when it first started

Ah don't say that 😕 I left school with no GCSEs and worked minimum wage jobs. I never thought I'd pass the qualifications I have now because i always thought I wasn't "bright" enough and never considered myself as an academic. Turns out I just hadn't found what I was good at.

Not saying everyone should suddenly become masterminds buy never just write yourself off. 🙂

To be honest it got really complicated! I think where I've changed pay grades 3 times this financial year as well I just couldn't get my head around it.

@Redwineandroses if your income has changed that much in a year UC most likely would be better. It adjusts each month according to what you’ve been paid. Tax credits relies on your income over the course of a year so overpayment is more likely

I will try and plough through the online calculator again 🙂

I think you've done the right thing and your being a great role model for your children - well done on your promotions!

The point I was trying but failed to make is that some folk can only get MW jobs for various reasons, have high rents and they truly are stuck in the UC benefit trap

2 adults working 40 hours per week MW in high rent areas are still broke

Op out of interest, was it 14500 with TC top ups? Or without?.
London weighting?

14500 is very good for 30 hours term time

I'm better off working less hours. I work 28 and had the opportunity to increase but having done the calculations I'd be worse off as I'm in receipt of tax credits. I declined increasing. No brainer!! I'll happily take all I can as I've worked full time for years.

14k wages yeah which after tax, NI and pension came out at around just over £10 an hour and around £1050 per month. No not in London but am in South.

I know what your saying and it was my situation. When I got divorced I could only get a MW job as I had no qualifications and the sector I work in is notoriously low paid. I think the high rents are the main issue for most and its a really shit situation 🙁

Yet the government keeps propping up the housing market and housing benefit it paying of private landlords mortgages

🧐

Absolutely and since we may not retire till about 80 at this rate... well