AIBU to feel disheartened by earning into the higher tax band?

[Chocolateapot]

I have finally after many many years of studying progressed in my career to just slightly above the 40% tax threshold. Unfortunately I’ve realised this now means any additional income I earn is now taxed at 40%, student loan 9% and 2% national insurance, essentially giving a marginal tax rate of 51%.

Not sure why I bothered tbh

Uc days out tickets are often £1 entry

Yes and families are included in the lower entry fee.

Our state NHS and social care model is one big reason wages in that sector are so low. 70-80% of the total market is effectively one buyer: the govt. If you don’t like abuses of monopoly power (monopsony, technically) start there.

DH stuck additional voluntary contributions in to his pension scheme for many years. I think you can put in up to 60k PA.

Same - I’ll trade as well.

Pension, pension, pension!!!!

Salary sacrifice affects your pension (certainly your NHS pension) as it’s a DB pension.

And some are paying in and not seeing the benefit, I for one am on a massive nhs waiting list and may have to go private rather than suffer for months.

Posters are right as it’s a DB pension in the NHS so salary sacrifice impacts on this. I am already putting 10.7% in there (defined contribution) but may look at a SIPP.

For those who are saying they would swap, would you swap the years of studying I’ve done - basically sacrificed my 20s to do a job that I thought would be worthwhile. Just feeling a bit dispirited to see so much being deducted every month.

Im on a Plan 1 student loan (unlucky fuckers on Plan 2 have my full sympathy) and I have been paying it back for 9 years as I’ve worked full-time since graduating.

Ive paid of ….. drum roll £189 in TOTAL.

Funny that it would have been exactly the same under the last government. 🙄

At least it’s deducted at source I have to pay mine over. So it’s in my bank account then I have to transfer it over to hmrc. Paid £30k to them last month. Of course it’s right to pay tax but this is ridiculous.

If someone is going out to work, and that work doesn't pay enough for them to live, so has Government has granted them an allowance to bridge the gap, then why is that less deserving money than someone who is going out to work and that work does pay enough for them to live?

Would the optics be better if there were no in-work benefits, so that only people out of work got 'benefits' and businesses were given huge subsidies so that they could pay a reasonable wage? No. Because then people would moan that they work so hard as a high status professional and they're only getting a bit more than the waitress/bin man/cleaner, so what's the point?

At least with in work benefits, society knows where to point the finger at the scum, hey?

How the fuck is this 'Socialism at work' when higher earners have been taxed at the 40% tax rate during the previous 14 years of various Conservative governments?

Pensions are already taxed when you start drawing down. They are also going to be included in your total or inheritance tax purposes.

There are a few things you can to legally to pay less tax. It's not dodging paying, its legal means to reduce your personal tax burden. You need to see a really experienced tax accountant. Do your own research before going. Your bank might provide advice, you don't have to take it.

Ask your employer what alternatives are in place regarding the tax effect on high earners. Or do you just move abroad.

Surely you’re not being forced to do this job though?

Just take a job that’s lower paid if you feel you’ll be better off.

Tbh I feel more sorry for those who’ve spent years working their asses off and still can’t earn over the £35k mark.

At least you have options now.

Enjoy it while it lasts OP. IF Reform get into government you'll be paying hundreds a month in Health Insurance and inflation on top.

A lot of people consider the Conservatives from Cameron onwards as a quasi socialist movement. Hence the rise of Reform.

I think you need to talk to a financial planner. My partners work provide one for them in February March when bonuses and pay rises are sorted. He is just over the £100k by putting more in pension, taking every insurance dental plan private health doctor on demand etc etc it is possible to save a lot of tax whilst not tying up the money long-term. He also has shares they advise on. If they don't have one at your work it would be worth ringing a private one

It's crackers isn't it. I might be wrong but I don't think Labour have made any significant changes to income taxes since they came in. Fiscal drag, the child benefit taper, the personal allowance taper, the annual allowance taper, the 45% top rate - all introduced by the Tories. This isn't to say Boo Tories, Yay Labour - far from it - it's to point out that no matter which government we have the very difficult financial situation we're in will be the same, the ways to deal with it are very limited, and despite what the likes of Farage and various brass-necked Tories are telling you, they won't be able to massively lower taxes and undo this supposed 'socialism' either.

...but as to the OP's original point; if it doesn't seem worth bothering then don't. And how did you not know what the repayment terms on your student loan would be?

Edit: apologies this was meant to quote thepariscrimefiles above.

It does seem that more and more people are choosing that! But, if we ALL did, where, exactly, would the country be??

Your paying back your student loan isn’t paying tax - it’s reducing debt on money you owe.
put more money in your pension and stop whining.
I have paid very little tax, then ‘normal tax’ the higher tax over the years. I am much better off now paying a load of tax than any other time.
You can always pop off to Dubai…

I think it is a poor understanding of taxation and money in your pocket. Firstly I think paying for a degree is wrong. I have never agreed with it so I do totally feel for you there, but on tax, the more you earn the more tax you pay… but the more you earn. You are still earning more just less of it as a proportion. Your pension contributions will go up as well which will mean you will get more back on those savings, which will give you a more comfortable old age.
I speak as someone in the same bracket and guess what? I still have more money in my pay packet at the end of the month, access the the NHS and roads. My children are at college (free) and one who is at uni, is benefiting from my higher earnings from not having to take out a massive student loan, as one he can’t have as much but secondary because we can afford to pay his living expenses.
yup I get it but you are consentrating on the wrong bit.

live within your means and not what you think you deserve and life becomes much easier. We have a choice, I see people everyday in my job who earn minimum wage who struggle to make ends meet,

if someone said you don’t have to pay tax, would I take it, course I would, do I make sure I claim every penny of allowance I can think of, course I do (you should check too, I can claim for professional fees). But the truth is I have always earned more after a pay rise no matter what the tax is, I always want more and feel grumpy, but ultimately I am still better off, and I am better off than most so it is worth it.

It does suck. I’ve recently come into this situation too. I try to reframe it by looking at the overall I receive. My salary pretty much doubled in the last 6 months which helped, but it would have to be a significant increase to move anywhere now
For anyone saying they’d swap salaries with you, there have been so many sacrifices I’ve made in the last few years to get to this point and I’m sure the OP has had them too.

Don’t be ridiculous.

You don’t know 1 person that has chosen to go from earning £50k to being on benefits on less than £12k a year.

But I will have ‘paid’ the amount I borrowed in student loan a few times over before it’s gets “written off”. In the last 5 years I’ve paid approximately 9K in payments (average of £150pm x 60) and my total balance has reduced by £180. Sorry that is infuriating. And I used my degree directly to get into my profession in the NHS (after a few more degrees that were required - funded by a bank loan and NHS jobs respectively).

pay the extra into your pension