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

I think a good start might be to not accuse everyone who criticises current policies of wanting kids and the elderly to die. But that seems impossible.

Hyperbole on both sides.

Please never stop being you

thank you for that exchange - am pissing myself

Pay more into your pension to keep your earnings now the 40% tax threshold, that’s what I do.

Given the progressive tax system is not new and you saw this coming why did you bother if you don’t think it’s ‘worth it’?

Personally I just focus on my take home and don’t obsess over tax, and it’s very obvious to me a higher salary IS worth it, even if that does mean paying more tax.

100% this. People doing the right thing are losing a fortune in tax and not seeing a huge difference in lifestyle compared to those not working.

I haven't been able to get a GP apppointment in the same month since Covid. I thought myself lucky to get one after waiting 6 weeks, and that lasted 5 minutes on the phone. I had surgery overseas because the waiting list was 3 years long.The NHS is not a miracle where I am.

That doesn't mean I am going to vote Reform. I am not. But I know others will.

Well agree that would be a start, but it won’t be enough to pay for all is asked. And these people can leave- they are mobile .
our economy is struggling. We can’t afford to continue spending what we currently are, and the cost of borrowing is escalating.

I can't believe they are going ahead with scrapping the child benefit cap. They also need to stop the taxpayer funded breakfasts and dinners. The country is skint. Pay for your own choices in life - don't expect random strangers to pay for them.

Agree. Monumentally unpopular move. Lost them votes and money.

Is 9% higher than what I pay now, while earning just under 50k?

I have gone back and forth on this. I was once all in favour of scrapping the cap. Now I am not so sure.

Can we stop calling the NHS ‘a miracle’? It’s a disgusting way to describe a public service that leaves people living in pain for YEARS.

Its shit. Student loan plans are ridiculous and more proof that as a society we hate the young.

@Chocolateapot 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.

Given that I sacrified my 20s and worked hard to end up in a job which is a good bit below the higher earner threshold, yes please, I would love to swap.

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.

I believe you mean you've paid off £189 as the net value. You would have paid in substantially more than £189 from your monthly pay slips over the past 9 years, but inflation means your loan has only come down £189 from the starting value.

I'm not familiar with the NHS pension, but sorry what's the reason for not putting more money in through salary sacrifice? Salary sacrifice also decreases your student loan repayments (salary sacrifice is deducted BEFORE you pay the student loan). It sounds like you are unlikely to ever pay off the loan, so using salary sacrifice to minimise student loan repayments as far as possible is a good idea.

I feel the same, I’ve now tipped over into the higher tax bracket and it’s so disheartening. I am a single mum of 2, I own (mortgaged) a very basic end of terrace house and I don’t live an extravagant life at all. We don’t go on holiday etc. although we don’t struggle for basics either.
It feels very unfair that any additional money I earn will be taxed at 40% but yet a couple could earn upto £100k at the lower rate yet life a much more comfortable life than me!

I'm sure you are.
Are you also happy to put in the time and study that OP did as well?

A rough calculation shows someone on £53k with effective marginal rate of 51% would see 74% of their gross income in their pay packet. So they'd work until elevenses for the govt. (Does anyone say "elevenses" any more or did that end when the basic rate of income tax was 33%?)

I am sure there are inefficiencies in the NHS but it seems vanishingly unlikely that there is some kind of re-organisation or common sense process that will transform it immensely for the better.

Labour and "The Left" are often, with some cause, accused of having a magic money tree. But sometimes the idea that huge savings can be made easily by cutting benefits, red tape, reducing migration etc is the equivalent wishful thinking on the right.

That's the best option but some of us are saving up for things like buying a house

It’s not 51% tax though. Firstly OP is only taxed on income earned over the threshold. Student loan OP knows it will always go up in proportion to earnings and again if its plan 2 the threshold is around 29K.

Glad you agree that it's very unfair that one couple earning 21K and 101K per year (total 122K) with two children miss out on 24 grand while another couple earning 99K each (total 189K) get 24K in childcare. It's a broken system.

Because we're not having a social conversation about it, I think we'll see many more cases like yours. There isn't necessarily the awareness that the 40% rates will be hitting more and more people in roles where the public hadn't taken that on board, like say a nurse who does a lot of nights or a teacher in London with a good chunk of experience. 50k buys a great deal less than it used to when the bands were last changed.

How much do people get in this situation? I’ve never understood this.

Have not RTFT (forgive me my sins) but I am in Scotland and in the higher tax rate band. Thankfully paid off the student loan 2yrs ago.

I remind myself of how lucky and how privileged I am to earn ebough to pay the higher rate. How fortunate I have been in my career that I am now in a position to be able to pay a higher proportion in tax. The money I pay in tax and national insurance will benefit more people than just me.

It is shortsighted to just complain about not getting all the extra money in my gross pay each month. The social contract is that my shoulders are now broad enough to support paying more into the system. I am proud of the fact that I can do this.

Society needs more broad shoulders tbh, not because other people don't work hard enough but because the cost of living has increased so much that people need help, the system needs to be paid for. The safety net of benefits and support is needed more than ever and I have moved out of needing it into being able to give more to that system.

This is how I feel. Although I live in France, which is a whole lot more civilised than the UK these days!