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!

The stat you provided is utterly meaningless.

It is if you don’t understand it 🤷‍♀️

Who doesn’t complain about taxes? The question is whether certain policies are fair or not. It often depends on perspective.

Hi, if you salary sacrifice your pension, the child benefit is worked out from that net position. Eg if you earn £50k and salary sacrifice £5k, your adjusted net income is £45k, which is what your CB will be based on

I would like to understand as well - what does your statistic show. That a few state schools are very good?

Out of the 8 how many are selective? How many are in affluent areas where a house premium is the same as private education?

I suspect my comprehension is not the issue here.

It shows that out of the ten schools that send most students to Oxbridge eight are state schools. That wasn’t difficult, was it?

While it is a nonsense metric it is also not even true.

OK. No skin off my nose if you don’t believe me. 🤷‍♀️

Back when I my son was about 18mths I had to make the choice to go part time for pretty similar reasons. She I’d first gone back to work we qualified for tax credits which cover most of his childcare, budget came, threshold was dropped and we no longer qualified. But going part time, cutting two days wages, I was better off than working full time. This also dropped me below the person tax allowance meaning I not only was better off but also stopped the government benefiting from me working. Unfortunately, if you are on the threshold it’s better for you to work less, and screw the government coffers at the same time

https://whichschooladvisor.com/uk/school-news/2023-uks-top-schools-for-oxbridge

Do you have the skill set to do her job though ? Because if you do, there’s no need to swap, just go get a better paid job ! Why would you knock someone down for being a high achiever ????

So only two of the state schools appear non-selective.

One of them has over 2000 students and has received 45 offers, the other has 3200 students and received 45 offers whereas the best private one had a 30% offer rate.

This statistic is indeed meaningless.

You can absolutely rip the arse out of the tax and NI relief if earn over £50k/are over 55 (so can access whoever you want) and your company allows salary sacrifice and pays their NI saving into your pension too.

Mad not to if can afford it .

With the new threshold you shouldn’t have to pay any child benefit back?

The budget today changed this so you get full child benefit up to 60k and it only now gets removed at 80k. Hopefully this helps a few families out.

It’s still worth doing even without salary sacrifice and getting the extra in savings. I paid £10k into a seperate pension, it automatically went to £12500 from tax relief, then I got another £2500 higher rate relief from which I paid in and got another £625 tax relief in the pension. It’s now worth over £17k just from paying in £10 k plus I kept my child benefit. I’m early 50s so it’s not like I’m locking it up for long. Even though child benefit limit has gone up think I’m going to keep paying in enough to bring me down to basic rate each year

That doesn’t apply till the next tax year 24/25

You've hit the nail on the head here.
Husbands ex wife is also laughing to the bank here, in the same boat.

From next month?

Yes. From the tax year starting 6th April. So it's great news for OP, and indeed the Exchequer and anyone who relies on her services, in that she doesn't have to choose between dropping days or paying a batshit marginal rate going forward.

But she's going to be over the threshold and have to pay some/all back this year, unless she puts thousands into her pension in the next 3 weeks. Practically speaking it may be too late to organise that even if OP wanted to.

I earn the same as you, and had a similar situation with my £11k bonus.
However, of course there’s a point to earning more than I earned under 50k! I earn £1000 more a month even with 40% of that taxed.
My mother was a single parent who depended heavily on the state through no fault of her own. In my family we believe this is how it should be - if you have more, you contribute more.
It’s called functioning society.

I see the announcement yesterday hasn't deterred the marginal deduction rates of 70% are fine actually posters!

It is indeed good news!

I’ve been playing round with the figures this morning (I work with data and love a good spreadsheet 😅) and found that with the budget announcement changes yesterday if I remain at 80% equivalent when I go back after Maternity leave, my family will be an estimated £370 a month better off than with this years set up.

This is a combination of being able to retain the child benefit and the NI changes. I’ll most likely now choose to stick at 4 days per week now, which has additional benefits for my career prospects and means more paid off on my student loan each month. Plus more pension contributions due to no drop in salary compared to three days a week.

So I’m pretty pleased that the cliff edge has been eased for £50k + earners. I don’t envision I’ll reach the dizzying heights of earning over £100k any time soon or if ever, but after this thread and hearing how those high earners are affected, I do feel it’s still very wrong that there is such a cut off there too & hope this also addressed soon.

All of this years bonus is now in the pension which is no bad thing for one year!

Thanks @Vod I’ve enjoyed reading your posts 👍

But we don’t have a functioning society.