Not an ordinary working person if you earn over 45k

[TesChique]

Disincentivising anyone to strive to earn over 45k a year is a bizarre strategy for growth i feel

Aibu?

I’m one that feels doesn’t earn that. I used to before kids & COVID but I lost my job and now do bits and pieces like exam invigilator and work at the elevtions.

but you'll have graduated with no student loans around your neck so not subject to what Martin Lewis has rebadged the "Graduate Tax"

Let's not forget that for graduates currently on a salary of £45k, approximately £16,500 is subject to an additional 9% graduate tax which already leaves them £1,500 less take home pay p.a. than a non-graduate.

Those graduating under Plan 5 (starting Uni 2023 or later, so for the majority hopefully starting work in 2026) will have £1,800 less take home pay than a non-graduate.

Factoring in the above for prospective parents/prospective students doing the sums, if you're considered wealthy enough to pay even more tax once you earn £45k, going to Uni soon won't be able to provide sufficient return on the investment to make it a sensible option unless unavoidable.

Bar child benefit, anyone on 45k does not receive government help, so your statement is irrelevant. In a household where two people earn 45k each, they'd still be entitled to child benefit.

We are talking about having to give even more to the treasury in tax in the future, though, which on a total household income of 45k is simply not doable.

What the non-resident parent "should do" and what they actually do are often two different things. Meanwhile, the resident parent still has to house, clothe, feed and transport children to and from school, and pay for childcare if they're working out of the home full-time.

In addition to considering the student loan repayments - which are a serious burden - you do need to consider Income tax + National Insurance (which was much lower) to compare like for like.

When basic rate tax was 33% in 1978:
Personal allowance (if married): £1535 (£8437 current value after inflation)
Income tax at 25% first £750 income, ie from £1535 to £2285 (£8437 - £12560 current value after inflation)
Basic rate 33% next £8000 income £2285 to £10285 (£12560 - £56533 current value after inflation)

NI 6.5% between £17.5 and £120 per week and nothing above that cap (£5000 - £34300 current annual value after inflation). Now NI is 8% between £12570 and £50270 and 2% above that

2025
So someone on £45k in 2025 pays £64686 tax and £2494 NI so has a take home of £35,919.60

If they have a student loan to pay back, that comes down to £34,115

1978
So someone on £8190 in 1987 (£45k current value after inflation) would have paid £2136 tax (£11740 equivalent) and £346.45 NI (£1901 equvalent) so has a take home of £5707 (£31,369 equivalent)

Difference
So despite the big difference in headline rate - 20% vs 33% income tax tates, our sneaky governments have added all sorts of hidden extras and layers so the actual take home pay isn't much different: £34,115 versus £31,369 take home pay

I think it would be interesting to do the calculation for £22k (full time NMW) and for eg £70k income and see how that has changed too, including benefits. I believe that redistribution has increased significantly - but it will take some googling to check what benefits there were then (and now!)

It's was still 6% more tax in 1978 than now on £45k salary, but that's much less than the headline 33% tax versus 20% tax implies.

And then of course Thatcher brought income tax down significantly in the 80s (when you were working) before it sneaked back up with the threshold freeze.

@CheeseChamp clearly doesn’t live in London where a two bed rental in a relatively nice zone 3 area costs well over 2k pcm , maybe 2.5k, it can be much more if it has a balcony or garden or something higher spec. If you want to buy similar it’s around 600k - more if you want balcony/ garden / something high spec and/ or more spacious. If you’re a single person on 75k I don’t think you’d be able to get a mortgage . If you can your repayments will be high meaning you need to watch the pennies each month. Higher tax will screw such people over . Higher tax in London should be for much higher earners

It's true. Where I live, if you earn 45k you're practically a millionaire.

This country is an utter joke 😩

I know DS's friends doing grad schemes in the financial sector start on £50k.

Actually, I was curious so plugged a £45k salary into one of the benefits calculators. It’s quite possible depending on rent and childcare costs that someone on £45k would get Universal Credit as well as child benefit.

You've missed the point that the promise was that taxes for 'working people' wouldn't be increased. So in order to break that promise, Labour looks to be changing the ordinary meaning of 'working people'.

It's not the tax rise (potential), in and of itself, it's the changing the meaning of words.

Yes it'll be those at risk of voting Reform I should think

It's not the tax rise (potential), in and of itself, it's the changing the meaning of words.

Some parts of Labour have form for this - look at the word “woman”, for example.

Yes they have a real problem with that word!

I did some research. Correct me if I'm wrong but once they reach the age of 18 you legally haha th ability to refuse to care for them. And the LA has to legally come up to a solution. You might have to contribute financially a bit, but you can have them out the house at least?

Rather than squabbling about those on benefits, try and direct your anger elsewhere. Like those at the top who earn millions.

Why would I be angry at people who contribute huge amounts of taxes to the economy, and prefer the takers over them?
Makes no sense.

Absolutely sickening to read some of the comments on this thread. What a complete and utter lack of compassion for circumstances others find themselves in through no fault of their own.

There's honestly no need to be jealous of those of us who claim various benefits which we are rightfully entitled to in order to survive if we have disabled children.

And yes £45k is huge as a salary for the average family in some parts of the UK.

Seriously considering reporting certain posts on this thread...

What's more sickening is the anger abd contempt towards the people there fund all of this, and the insane jealousy towards those on very normal salaries.

On the flip side then there's no need to constantly clammer for anyone who earns more than you to pay more tax! Many of the PP on here are the ones paying for your benefits. Maybe consider that?

I am self employed, making around 50-60k. I won’t bother now, will just relax, not take as much work, go below £45k and kill any ambition I had. There is no point in trying anymore.

45k is not a "normal" salary. It is more than 75% of the population earn. If you earn 45k you are rich. Not super-rich, not extremely wealthy, but still rich. As in, not poor.

So it's a binary definition ie if you aren't poor then you are rich? That certainly seems to be Labour's definition.
Fuck me we really are a race to the bottom if 45K is now RICH!!!
So how do you define 100K? 500k? Billionaires??

£60K earner here…

I don’t really mind paying the tax but it’s the fact that even increasing my tax still means I can’t use any of the services is what really irritates me.

Can I get a GP appointment, not without a massive struggle. A dentist, absolutely not! Roads are a mess, schools have no money. If I paid more tax and things actually improved, great! But at this point it just feels like throwing it into a black hole, I have less money and things are arguably even worse.

If the non resident patent is paying the effect of any increase in should hopefully be reduced.

What the non resident parent does is relevant because otherwise tax payers have to pick up the slack. But that's another for thread.

45k today, 25k tomorrow.

To all those who voted Labour, and have yet to accept their error, be afraid, be very afraid, because they are coming for you too.

You've let the fox into the hen house…