There’s NO point earning over £50k?!

[ThisReallyDoesntAddUp]

Because of the £50k child benefit limit and 40% tax rate!

So I earn £78,000 pro rata overall now with my job following a mid year pay rise. This includes bonus and car allowance. I work 4 days a week (80% equivalent) which brings the overall pay this year down to just shy of £50k with a £9.6k bonus.

Out of the £9.6K bonus due in March, I’ve worked out 40% will go to the taxman, over £2K will need paying back for child benefit as I’m now over the £50k threshold, and a further £800ish will go towards my student loan. Deductions of just under £6k!!! This means I’ll only take home 30% of my bonus?!

I’m now on mat leave for baby number 3. AIBU to make sure when I go back I remain under the £50k mark by reducing hours even further?! I’d then have less to pay in childcare mitigating the difference in the pay I’d receive working an extra day each week.

Its an absolute joke, I was hoping to go back to work after my last baby and push on hard with my career but what is the actual point!! I may as well work less hours, keep the child benefit and pay less in childcare!

I have semi retired to earn under 50k BUT I spent 6 years earning well over as self employed and put as much of my higher rated earnings into my SIPP pension as I could.

It's going to encourage many more people who are in the 15 years approaching retirement to go part time. The Government are just soooo blinkered to it.

Curious to see how this thread would have planned out if I was to say I had three kids, work but want to drop hours to get more Universal credit. 🤔

You'd get a load of moralising there too, just from a different set of posters. The insistence on centering their own sympathies rather than acknowledging that people respond to incentives would be identical.

Yes indeed! I am planning on exactly this basis.

The cliff-edging of our taxation system is crap and very demoralising, regardless if it's at the £50k mark or the £100k mark, so I agree with you OP.

Except as a highly effective and skilled English teacher and HoD I have no idea whether it’s worth earning over £50k because I’ve never been given the option. Given the OP’s figures, I’m pretty sure it still is and I would have said yes though.

It’s fucking irritating to work hard and hardly get paid anything then be accused of sponging off high earners too, I imagine (not my experience - I’ve had a professional - though not highly paid - career. I just have some awareness of the lives of others). Do you really think you work harder than someone in a minimum wage job?

Well, given that we've still failed to curb inflation and the child benefit thresholds remain frozen at 2013 rates meaning it's lower in real terms every year, perhaps you'll get chance to find out.

The stuff about who works harder is totally stupid though, I agree with you there.

Talking and bitching at each other about who works harder isn't relevant here at all and is too subjective. We all work hard when at work - I think we can agree that.

Some jobs are paid lower than others, and some jobs are paid higher. That's how it is, rightly or wrongly. Sometimes its because those higher paid jobs involved a lot of initial financial outlay to enter the profession, other times its simply that the job is a niche skill or a skill that is in demand.

Of course, but not comparably so if you have two working parents on £48k each. I think

Not bad with money but 3x maternity leave, 3x nursery fees, mortgage to pay....

Well, cut your cloth like pp suggested

As someone with 4 kids (with big gaps) who has only ever worked part time and still only just scrapes above minimum wage after 21 years NHS work, getting Child benefit was sometimes a godsend. IMO it should only be for low income families and this has been a long time coming.
I admire women who sacrifice so much to climb the career ladder and become high earners/main breadwinners, my daughter is one of them, and if you do it then AIM FOR THE STARS regardless. I dont think UABU, i think our goverment are robbing B* compared to other countries, and needs completely reforming.
I for one will be retiring abroad on my measly state and NHS pension and will be far better off.

I am not convinced. There would be a lot more "why did you have another kid" etc. OP has been treated more lenient because she is a high earner but cutting hours to get benefits.

Good luck with that. Where are you going? Your state pension will be frozen at the level it is when you leave.

Plus you are no longer able to retire to the eu since brexit

You're not actually disagreeing with me then, as I didn't say how many posts there'd be. Only that people would wade in moralising, which is the same point you make here, and that it would be a different set of posters doing the entitled, cut your cloth, shouldn't have had another kid routine.

@BIossomtoes As much as I sympathise with the fact that you had to/have to wait longer for your state pension please bear in mind what people in their 30's might or might not get. Be grateful. Suspect I might be dead before I get mine.

I will follow my father who retired to rural Montenegro where he isnt taxed again on his pension. The cost of living there is low ie: his property tax on 4 bed with land is 69 Euro per year. Cost of living is a fraction of here. To apply for temporary residency you need buy property, start a business and have provable savings of 4K annually and can eventually apply for permanency.
It may change if they ever join the EU but all indications are that this is unlikely.

@TruckerMother I agree about the robbing b*** bit totally- having lived in Copenhagen though for 20 months, to get a great quality of life they pay around 44% tax and there is only a very low free tax allowance too- the upside is wages are about 30% higher, good childcare is peanuts , masses of good social housing, no NI, no council tax and pensions are way higher. They do pay a small amount into a scheme that is for periods of unemployment etc .

Unless you have an EU passport or happy to go to Eire- it's not that simple to actually move now to the EU if retired- unless you keep a uk place and do the 90 days rule. Most country's require uk citizens to have either work to go to, a heftyish income and not work plus private health or a ton of cash in the bank- its variations on all of these depending where you go. A real Brexit bonus of course!!

I do disagree about child benefit- I think it should be across the board and not relevant to tax either. High earners and even middling earners pay a ton of tax, aren't claiming top ups of this that and the other, and get no other benefits whatsoever and often don't use state education either. In many country's it's an across the board benefit.

Be grateful? For something I paid tax (higher rate for over 20 years) and NI for a total of nearly 50 years with the promise I’d get a pension at the end of it? That’s longer than you’ve been alive and you have the brass necked nerve to tell me to be grateful?

I don’t want (faux) sympathy. I used it as an example of how the system has done a number of different sectors of society an injustice and how, as soon as it stops affecting you personally, you stop caring about it.

@TruckerMother ah you have answered me on the EU thing

Apologies, not read the whole thread, so this may be a 'cancel the cheque' comment......
One thing to watch out for if you reduce your hours, is it will reduce your pension. Where I work it's not just about how much you earn, but also about the hours you work, so although I've been here 21 years, because I went part time for a few years when the children were young, I only have 17 years pensionable service, so have 'lost' 4 years. This is especially galling, as for a few years of that I was actually working full time the majority of the time but it was classed as overtime, as not on my contract (but still paid as time, not T1.5 or anything). SO when I retire, I will get less to live on.

However, if you can afford to do it, the time at home is definitely worth it - looking back one of my biggest regrets is not spending more time at home with the children when they were little.

Splitting hairs but I meant you go to University with the intention of becoming a lawyer / solicitor - so three years studying for your primary degree - I was only referring to 3 years as when you get a training contract you are usually paid - while you progress on your further exams - but yes from a free time perspective it does mean giving up a further two years of your life - but you are being paid at least.

Na. Semi retired now. Teaching isn’t a doable job any more so I took my pension and do a bit of supply.

Well, I can't blame anyone for getting out of that sector! I know people who've done the same. Would've been interesting to see if you felt that way if it were actually going to apply to you though, rather than being of an age cohort who were able to take full universal child benefit for granted. The 50k threshold is hitting more teachers who are in higher leadership positions now, which I'm not sure was generally foreseen when universal CB ended in 2013. I can't be arsed trying to dig out the pay scale from back then, but obviously salaries were lower.