I can't afford to be alive anymore

[worrywilma]

I live alone and I'm barely making ends meet. My mortgage is due to go up in 3 months by about £340 a month and I just don't have that money

My mortgage is for £125k and I'm already at the top end of the term. I earn £30kpa, which is a good salary, and just get by now, how am I going to be able to pay the additional on my mortgage?

I don't have children so I can't claim any benefits. A single person should be able to pay their bills, eat and have some sort of life on one salary. It's so scary

I'm not suggesting on the whole amount. It is that point when going over the threshold. All income over is then taxed or abstracted and amounts to leaving them 1/5th of those earnings. That's why they cut hours.

The dread many employers have especially the NHS is as tax thresholds are frozen, as their income increases each year they keep reducing hours to reduce their income under the thresholds. To try and encourage so,e to stop it I have suggested they consider salary sacrifice car scheme to lease which reduces the relevent salary

Your arithmetic is way off. You can’t just add up a series of percentages and conclude that that is the total % deducted.

The marginal tax rate of 40% only applies to earnings over c£50k.

@PortiaWithNoBreaks

The marginal tax rate of 40% only applies to earnings over c£50k."

Exactly my point. The cliff edge is massive and until April this year had the child benefit high income cliff edge with it. That is why huge numbers of our staff that are anywhere near it take avoidance action..ie, reduce hours, cut additional working hours or bank, take out salary sacrifice. You clearly are not seeing it but anyone that is involved in employing staff either at the mid £40k level of bottom end where they are claiming any benefits sees it day in and day out.

And yes, do add up,the % as that is what matters and normal working people see....one person said to me that she did some bank work and tipped over and hit £53k last year. After deductions she ended up with circa £650-£700 of it. She has now cut her hours to reduce her income to £45k and makes the extra £5k on bank work which she can please herself when she does. She won't earn a penny over £50k even though the child benefit high income charge threshold increased!!

That I am afraid is a real working life example of how decent aspirational hard working families are utterly screwed.

Oh and this week I had two doctors tell me if the lifetime allowance is brought back they intend to retire. More avoidance behaviour. It is utterly dire. That is why productivity is so poor in the U.K.

🙄 the tax deduction is not 40% of all earnings so you can’t just add the percentages together

You don't end up with only 1/5th of you earnings at any level of tax as far as I can work out

I don't think you are understanding the point. It's not 40% of all earnings. Once you hit a threshold anything earned over that threshold is taxed at the higher rate and/or child benefit and other assistance is lost. Therefore people see little reward for earning above that threshold. So they manouvre - reduce working hours, pay more into pensions etc. etc. to keep the salary uner the threshold. If working an extra day means a lot of hassle for little reward, why work it? And don't forget the costs of working - commuting, childcare etc. You are frequently better off working less. It's a massive issue and a major reason why we are so short of NHS staff AND why so many families receive working benefits.

You have to either:

• Look for a job with a bigger salary
• Rent a room
• Work on weekends in another job

I am sorry that you live in a country where millions of knuckleheads voted for Brexit.

Ask the bank for a 3 month mortgage holiday

Sell things, everything you can.

Get money together and do the room up, rent it out for a year and see how you are then.

I don't think many nurses and HCPs earn anything like enough to hit the 100k where the impact of child related benefits really takes it's toll

No, 100k is a real killer. But 50k is also a large inflection point for a lot of families. You lose 40% in tax, child benefit and any costs of working (commuting, childcare). If you are in a stressful working environment (NHS!) the minimal profit for that 5th shift a week is just not worth it.

Cutting down your working days from 5 to 4 often has much less effect on take home pay than you might think.

Not everyone has childcare costs though and the average nurse salary is under 40k so those issues are only affecting a
Minority of nhs staff

It may be in your circle you see a lot but the overall impact is small

Dog sitting.

Especially if you don't have one of your own. People are paying crazy money. Even just Fri and sat nights

Contact a broker?
London & country are good

Perhaps ready the post. I referred to deductions for a senior nurse in the NHS whose earnings have broken the £50k threshold. This is a real life example from January this year but since then the child benefit tax surcharge threshold changed.

40% tax
2% National Insurance
9.8% pension
9% Student loan repayment
20% high income tax charge for all earnings over £50k. Raised to £60k in April
Total circa 80% in deductions from salary. Hence said nurse who might earn £250 for a 13 hour additional shift received £50!!!

Whatever you call it, tax or deductions, that is fact. Now the child benefit threshold is lifted she would receive £100 but it is still pathetic and guess what..they don't want to do it

They do afford it - but in all honesty these days £30k isn't a good salary - it's barely above minimum wage (assuming you're full time).
A good few friends of mine (who aren't particularly qualified) are at £40k or more with fairly menial jobs - I'd look elsewhere and see if you can earn more.

Aside from that, you'll just need to cut your cloth a little more tightly - take on a lodger, check you're paying the minimum needed for utilities and mobile phones etc, see if you can walk or cycle rather than drive to places and finally look to see if you'd be better off moving to a cheaper area.
Good luck

So depressing.

@MarieG10 where are you heading off to?

I'm curious about this. Are there websites where people match up and would the sitter need any special insurance?

I understand the UK tax system really well

Totally true, but you would be surprised how many Band 5 nurses are hitting £50k now as they are doing a lot of bank and agency work in desperation to make ends meet. However, they stop working additional when they are near to the £50k which is usually around January, just when the NHS most needs additional capacity. I'm wondering if it may change next winter given the child benefit high income threshold has risen to £60k but I doubt it as they will still be paying 62% in deductions

Senior nurses are touching £50k hence why the reducing contacted hours and make up the difference to £50k on bank when it suits them.

It’s a massively British issue. I used to work in a sales job and we all coasted once we’d made our target as there was little incentive to exceed it. Likewise tax bands - I have my own business and avoid drawing out money in higher tax bands. Such an ineffective way to run an economy as it penalises productivity.

See what can be done about the mortgage, e.g.

Moving to a cheaper deal (if there is no penalty) - contact a mortgage broker
Extend the term of the mortgage if your lender will allow it
As a last resort, look at a payment holiday or temporary move to interest-only - that would give you a grace period to find a way to increase income/reduce other outgoings.

62% deductions after assuming they don't lose any child benefit

How ?

And indeed 62% reductions even assuming they lose all child benefit l

And even if they did / they would still have more money in their pocket if they did work more

That strongly suggests that they don't really need or want any more

convert the lounge to a temporary bedroom and get a lodger for your room?

get a loan to finish off the second bedroom ASAP then you can let that out.

A room in a shared house in a market town in the south east is £700 a month!

I have repeated this several times..perhaps read the thread.

40% tax
2% National Insurance
9% student loan repayment for degree
10.7 pension.
Total 62% rounded

The child benefit tax doesn't kick in now until £60k so less of an issue but up to April 2024 (just before election of course) it added another 20% tax on the next £10k