To be gobsmacked about my salary increase

[Clementinemist]

I started a new job a month ago, which came with a £15k payrise. 'Lucky me!' I thought when I was offered the role. It should have meant a bit more more disposable income. But in reality my disposable income has now actually decreased by £150 a month, mostly due to recent rent and bill increases.

Just wow.

I'm well qualified and experienced in my profession, and worked really hard for this role. It's quite senior too with more responsibility than my last job. Yes, I'd have been even worse off financially if I was still in my old job, but still a kick in the teeth. The concept of career and life progression now seems to be dead?

I'm severely disabled and currently unable to work (due to the nature of my disability I can't even work from home ) Therefore I have to claim disability related Universal Credit. I live in a housing association property and was recently overjoyed to get a letter from said housing association, stating that my rent was going DOWN by £100pcm - wow! It didn't say why, just presumably to help tenants out with the recent cost of living increases etc etc.
Well, it turns out that as I receive help from UC to pay my rent, they of course have reduced the amount they give me for rent, in line with the reduction!!

I get it, I do! Of course UC aren't going to continue giving me the old rate. I just genuinely, stupidly believed I had an extra £100pm there for a few days and had a wonderful feeling of relief. Not total relief of course but enough to feel a little more confident that my child & I aren't going to starve or freeze

It's an added kick in the teeth that if I was well enough to work, I absolutely would have an extra £100pm but as I have zero choice in not working, I continue struggling

She's not gobsmacked at her pay cheque, she's gobsmacked at her bills.

A teeny tiny bit of reading would have told you this.

Well try to imagine how difficult life is going to be now, for those who's salaries remained the same! Lucky you.

Gobsmacked at the fact that despite a £15k increase (“gob smacked at my salary”) it means she’s £150 DOWN a month

which, as many other posters have pointed out, means an exponential increase in her bills and rent to the tune of circa £850

given no mention of partner or children, this is odd

Is your maths right? And your tax?
Even assuming the whole £15k is taxed at upper band effective rate 43%, you should be getting over £700 a month more than before (unless maybe you have whopper pension contributions or something). Have your costs really risen by £850 a month?

It doesn't add up.

I got a smaller payrise once that resulted in a net pay drop but that was due to my pension contribution rate jumping up to the next band.

Your net pay will have increased so it's disingenuous to suggest your net pay has decreased. Your pay has gone up; but your outgoing have increased at a greater rate. You're shocked at the cost of living increase like everyone else not your payrise!

If you are taxed at a high effective rate on the rise due to claw back of personal allowance, no one on here will be sympathetic because it means you are earning over £100k after pension contribs.

Your living expenses have gone up independently of your wage. It sucks, but just be grateful that you now have the increased means to cover them and you will now also be paying more into your pension etc.

A pay rise of that magnitude (£15,000!!!) should indeed offer the OP much more than a loss of £150pcm.

If it doesn’t, that’s because of something unique to OP’s situation- a tax code issue, a change in rent & bills that’s not due to ‘general cost of living rise’ - because you can’t lose £1K a month and it not be either a mistake of some sort or a change you’ve agreed to in some way as well as the general UK fiscal environment.

It’s the price of everything going up these days that’s a complete killer!

weve been comfortable for a few years (not rich, but enough to do everything we really want to and have savings), but the price of everything increasing means we are having to really tighten our belts and having to reduce savings. seriously considering going back to work full time (currently work 4 days a week)

and we’re fortunate that at least we are not on the breadline

At least you're paying your bills and have some left* *over
Stop complaining.

Net income is after income tax & N.I. Disposable income is after you have paid essential bills & bought food & household items.

Wowsers. If I got a 15k pay rise I’d expect to clear nearly an extra grand a month. That’s a pretty rubbish outcome for you being worse off!

There are some harsh responses on this thread - life is very hard for many people at the moment but that doesn't make OP's experience less valid.

I do wonder though, OP, if your figures are correct. £15k annual rise will give you around £800 per month extra after tax so if you are £150 per month down, your bills must have gone up by £950 per month. Are you sure your figures are correct and if so are there any changes you could make in the way you spend?

I've just done a calculation for myself. If I had a 15k pay rise, after all deductions Inc pension and student loan, my take home pay would be £586 more. I'm not sure where people are getting 1k more a month from?!

Someone in the 20% tax / 13.25% NI bracket who wasn't making pension contributions or student loan payments would be £834 a month better off.

Someone in the 40% tax / 3.25% NI bracket, no pension, no student loan, would be £709 better off.

It's very variable though as most people make some form of pension contributions etc. Individual circumstances vary.

Just a thought, OP, has the pay rise put you in the “60% tax trap”? It’s not something that everyone is aware of.

Yes, calculations don't take into account OP's increased student loan repayments and pensions as these are unknown.

Nonetheless, even using your figures, if take home pay increased by £586 and you ended up £150 per month poorer your expenses would have gone up £736 per month, which seems excessive.

So the op accepted the job without doing any consideration of how much the very sizeable increase in her salary would impact her take home…

so I think safe to assume the op isn’t very financially savvy…

so I think safe to assume that op is wrong is her calculations that she’s £150 a month down (because other in the space of a month her monthly expenditure has increased by circa £850, which given no mention of partner or children, is highly unlikely!)

I remember getting a pay increment at work once. It was about £1500 ish but it was the same month the NHS increased the pension contribution amounts (fuckers) I ended up with about an extra 35p a month! I was not happy 😭

It could be that cursed interval between 50K and 60K where you're already a higher rate taxpayer, but lose child benefit and childcare subsidy, if you used it before. Student debt added on top, I can see how the OP's scenario is entirely possible.

My husband worked as a department manager at Sainsburys back in the 70s. He got a promotion to Deputy Store Manager which included a suit allowance, and a good pay rise, but he was no longer eligible for overtime payments, and was expected to work as many hours as necessary, usually 60 a week. His first months wages were lower than before the promotion as no overtime was paid. They then started to cancel his days off with no notice. He was gone within 3 months to a job on a lower salary but with a company car. Never regretted leaving.

£15,000 pay rise is massive. Without it imagine the financial state you’d have been in! Obviously tax, N.I, have gone up, but not so much that your, say net £10,000 rise won’t cover rent, energy, food, fuel price rises etc and leave some thousands over.

a £15k pay rise is great at the moment - I accept that due to bills increasing you've no more disposable income, but come on you ABU because without that pay rise, you would have significantly less disposable income.

Always be grateful for what you have.