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’m not sure what cloth there is left to cut. Rent (which has increased as LLs mortgage rate has increased), council tax (which is going up again), extortionate energy bills, childcare (increasing cost), ever-increasing cost of food, fuel, and car insurance. I cannot afford holidays, even in this country. We do not have day trips. We have no little luxuries. My ex-husband left me in some debt which, once paid off, might improve my situation slightly.

If you’re the main earner wouldnt you be financially better off working full time for 78k and your partner working part time?
id agree the child benefit is ridiculous due to the effect of higher tax rate as well and yes you’re better off putting it in your pension if you’re in the 50-60k bracket. But surely you would have been putting some into a pension anyway?

This has been done to death, 100's and 100's of times op. Many say it's unfair. Combined income. A certain % of CB between £50k and £60k. What are you suggesting?

It’s why I’m staying part time when DD starts school this September. I’m 0.81 FTE, but at full time I lose all the child benefit & pay 40% tax including on my BTL income. I take home less money in total full time when that’s all considered. Not worth an extra day!

I’m top of my career anyway (am 46 and no wish to do anything more demanding as already senior).

Hoping there is some government action on it eventually- otherwise I’ll be staying on 4 days forever.

And this is why the wage gap continues ad nauseum.

People who resent others for complaining about the amount of tax they pay and the dwindling benefit of earning around 50/60k are those that benefit most from others paying lots of tax. Higher rate tax payers are the ones actually helping society to run.

I do understand your point @ThisReallyDoesntAddUp bug I would urge you to stick at it. Children are small for a limited amount of time and that time spent building up your career will leave you in a much better place long term.

£60k household gross income is almost double the average household income regardless of number of earners. So while not “insanely high earning,” it is still the privilege of a higher gross household income than 70% of the population.

I agree with what you are saying re. promotions and perception at work. This is my main concern.

However, if I go back full time 40hours per week at £78k, I’d take home £47 k per year overall.

Working just 24 hours a week at 60% equivalent and staying below 50k means £36k with child benefit.

£11k is a massive difference but after the additional childcare for three kids for 2 days per week and traveling costs it would mean financially we’d not be much better off and children would be home less.

It is completely my choice to have three kids and I understand to an extent the ‘my heart bleeds’ comments from a handful of posters but I just can’t get my head round why as a country we are discouraging people from working harder.

I’ll just take my foot off the gas career wise I guess until number 3 starts school in 2028 😅

Totally Agree minimum wage should go up. And salary doesn’t always equate to hard work. a full time min wage salary would get you 20k though. And more if working a 45-60hour week like perhaps posters here are but again there wouldn’t be much incentive to do so if you lost benefits you got at the lower end

Yeah, single mothers would get paid better

Tax might go up from 20% to 40% over £50k but at least NI goes down from 10% to 2% at the same point. So you’re actually going from 30% to 42%, not 20% to 40%. And it could be worse - you could be in Scotland where income tax is 42% over £50k and 45% over £75k…and the schools and NHs there are in an even worse state than here!

Just posted this summary in reply to another poster regarding going back full time. For the extra stress I’m not sure its worth it while the kids are young!

If I go back full time 40hours per week at £78k, I’d take home £47 k per year overall.
Working just 24 hours a week at 60% equivalent and staying below 50k means £36k with child benefit.

£11k is a massive difference but after the additional childcare for three kids for 2 days per week and traveling costs it would mean financially we’d not be much better off and children would be home less.

My mistake! Thanks for pointing it out. Hopefully some others on here will realise it’s net adjusted and not make same mistake as me. I’ll try to delete my comment

High earners do use public services. Not only do plenty use them directly, they also benefit from them daily through the fact that most of the people they interact with use public services. Those nurses in their private hospitals were educated in state schools and the NHS, for example. So were the people who sell them goods or carry out the million and one jobs which are necessary in society.

This is exactly the scenario those on the benefit border feel. Lots of them also work hard and are discouraged because minimum wage is so low and the more they work the poorer they feel once benefits are reduced.

Overall I'd rather have £50k+ and feel poor than £21k and feel poor...

I’m just saying that for mums, taking the foot off the gas pedal on your career often means the gas pedal disappears.

You can’t count on it being there in 2028 for you.

You can be completely frozen out/off the progression track and not only will your employer see it, it will be evident on your CV for every other employer. I’m just warning you as an older woman who saw this happen to many of my colleagues who made the same choice. There is a reason why the gender gap in earnings starts at motherhood and then widens until pension age, and much of it is sexism of if you slow down, you risk getting trapped in the slow lane.

An extra £0 a year net for a few years seems pointless but it is an investment in your career and it does pay off. More than any Uni degree that comes with debt pays off.

It should bleed.

This woman has obviously worked her butt off and is not able to enjoy her salary. Whilst others come out with for doing a lot less.

When the Child Benefit Charge came out we were hit more than most, DH was earning just over 60K, I was a SAHM, we had 4 DC. We lost 3K a year overnight or equivalent to a 5K pay cut before tax.

I couldn’t complain about it, couldn’t say it was unfair as we were “lucky” DH was earning this amount. It was unfair in that our neighbours could both earn 50K each and still receive it.

But OP you have to look at the bigger picture, time goes quickly, two of our DCs are adults now, we no longer require childcare so I’m back working FT, DHs salary increased. Tax is inevitable really.

I have a colleague who works 3 days per week and won’t work anymore days as she says she will then pay tax and it won’t be worth her while. I can’t understand this. She will only be taxed at 20% you don’t lose all your income the minute you are taxed. It seems short-sighted to me.

You have no idea. The jealousy in this post is palpable. If YOU want more do something to go earn it. Its funking irritating to work hard, earn a good salary then get half of it taken to pay for those that don't.

Yip. It's bullshit. This chart shows the marginal tax rates for, as an example, a single earner with 3 kids. It's insane.

If the £50k marker for tapering child benefit had been adjusted in line with inflation and not frozen as it has been, it would now be £67k!

Sorry pic here

Yes, if you go over your earnings by £1, you lose 55p off your UC.

So it’s a bit rich for any high earner to be complaining about losing 40p off every £1 earned over £50k when that income alone is enough to cover essentials, unlike UC.

Plus at over £50k you have access to and the ability to squirrel that money into pensions or other tax free savings to avoid losing that 40p. Those on UC trying to lift themselves out of poverty don’t have that option due to unaffordablility.

This is why I am staying part time while my children are young. I would rather be able to pick them up from school and be more present at home, than further my career and have to work full time. Financially it doesn't make sense, and none of us benefit. I value my time with my children immensely.

Kids are only small and in childcare for a short time.
YABU

It depends. Probably not working the extra day in your case unless you are looking at career progression/pay pay increase i the long term....

? Sorry but plenty of people on low wages topped up by UC work as hard or harder than the average Jane on £50k a year. OP earns £50k working less than full time. Not everyone who works hard earns a good salary, and not everyone who earns a good salary works hard (or even full time).