[Politics] Does earning £50k a year make you 'rich'

[Guinness Boy]

Impressed that it took till page 11 to get a good old fashioned dig in at the middle class in general


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[Herr Tubthumper]

I’ve worked hard and applied myself (at times) a great deal to achieve what I have by 30. I earn in excess of 50k with bonuses etc, no commute, no overtime, no children, private healthcare, healthy pension etc but I have a mortgage of over 2k a month so I can struggle a little bit at times tbh BUT that’s my choice and I consider myself extremely privileged as should anyone earning what I do tbh, no matter what your circumstances or life choices, even if that’s kids etc, open your eyes, the vast, vast majority of the worlds population would give anything to be in your position. Some of these comments make me very angry! You’re ‘rich’

You’ve worked hard to achieve no children? I’m not sure if you know, but contraception is easy and widely available these days. You can also just say no.

 

[Weststander]

There's no threshold at £123,700? In my case, if Commie McDonnell ever gets in no 11, several things will happen: 1) I will move to self-employed contractor status if I can 2) I will divert above threshold income into pension contributions 3) I will diversify my income streams into multiple below threshold levels, including diverting to the other half 3) I will ensure work related assets - car, office, tech become tax deductible rather than a benefit in kind.

People earning over £80k pay a wildly disproportionate amount of the total yield per capita and also happen to be the most mobile and can work from home - thus tax deductible - or abroad.

Given that we are already at the tipping point - around 45% of total PAYE income for higher earners goes back to the exchequer - where the above behaviours start to occur, any increase will be counter productive.

There is at £123,700.

(The danger of looking up something on the internet, where it's a specialism. Our tax system is complex).

Effective marginal income tax falls from 60% to 40% on income over £123,700.

 

[LlcoolJ]

There is a threshold at £123,700; you currently pay 60% tax between 100-123.7K and 40 percent beyond that up to 150K. at which point you pay 45%.

As for self-employed status, I can't imagine Labour being any more friendly than the conservatives about this if you only work for one client.

And good luck with "ensuring" his car is a tax deductible expense rather than a benefit in kind as it's not that simple..... at all.

 

[Weststander]

Choice of home and location make a huge difference, we looked briefly at moving a few years back and thought why? We're Ina great location and don't need a bigger house. . . All being well we'll be mortgage free in our mid. 50's That's where our concentration of investment ( and a few classic cars) has been . . . .and despite over 50k income we're always cash poor!

If I'm lucky, and still fit, I should feel 'rich by the time I'm 60.

It still amazes me to see new flash cars on the old council estates, some people can't resist status symbols, and they're probably on tick against the house anyway!

"It still amazes me to see new flash cars on the old council estates, some people can't resist status symbols, and they're probably on tick against the house anyway."

This all started about 20 years ago. We bought a small house (secondhand) on a Barrett's type estate in the Brighton area, and we drove relative paupers cars compared to everyone else on the estate.

Despite the houses costing just £100k to £200k, most of our neighbours drove brand new Mercs, BMW's and Audi's, x2 per household. Financed by PCP's (Personal Contract Purchase) apparently, where you can outgun your friends with a superior car.

 

[Questions]

This is the problem in this country. There are millions who would love to have an income of 50k a year. Get a smaller house, drive a smaller car.

 

[Weststander]

The current £100,00 - £127,300 band where you pay 60% is the most nonsensical. Why not just increase tax to 45% at 100K and be done with it?

The bugger in all this is how and when to withdraw the personal allowance. Everyone always received the personal allowance until Darling in 2009 (and subsequently backed by Osborn) took it away from those earning over £100,000. Gradually up to a point where its lost altogether. If 45% tax was taken down to £100,000, it would give a tax rate jump from 40% to 65% at £100,000, and make the issue worse.

 

[sully]

I have a view on both sides of this one;

I'm married, 1 kid and live in Cornwall, I earn around 25k a year and for the area, we live well, 4 bed detached house, 2 cars and able to eat out etc - not rich but we're ok.

My brother is married, no kids lives in Sussex but earns around 80k, again nice house but is only able to live a similar lifestyle to me.

On paper, we should live a hugely different life but because of regional living costs, it doesn't work out like that...

When I moved to Cornwall, I took a 26% pay cut for basically the same job role (just with a different company).

When I moved back, I got a higher salary than the one I’d had 2 years previously before moving.

It definitely depends where you live.

 

[Weststander]

This is the problem in this country. There are millions who would love to have an income of 50k a year. Get a smaller house, drive a smaller car.

They won't give up the Range Rover or huge Audi. Their associates and gossips at the school gates, might think that they're less of a success.

 

[Lower West Stander]

They won't give up the Range Rover or huge Audi. Their associates and gossips at the school gates, might think that they're less of a success.

I’m not sure those cars are a symbol of wealth anymore.

PCPs mean just about anyone can drive a nice new car off a forecourt.


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[The Antikythera Mechanism]

I reckon that in the fifteen years prior to selling my shares in a company I partly owned, I paid something like £750k in income tax. I sincerely hope that that went some way to en”rich”ing the lives of others less fortunate.

 

[nwgull]

And good luck with "ensuring" his car is a tax deductible expense rather than a benefit in kind as it's not that simple..... at all.

The BIK rate for cars isn’t actually too bad if it runs on lentils. Although that would still be subject to change under Labour.

 

[nwgull]

The bugger in all this is how and when to withdraw the personal allowance. Everyone always received the personal allowance until Darling in 2009 (and subsequently backed by Osborn) took it away from those earning over £100,000. Gradually up to a point where its lost altogether. If 45% tax was taken down to £100,000, it would give a tax rate jump from 40% to 65% at £100,000, and make the issue worse.

I’m suggestion not removing the allowance at all. Just make it a straight 45% at 100K, and they’d probably collectively more tax. As it is now, anyone on that threshold will have limited motivation to do any overtime and/or put any extra in legal salary sacrifices such as pension.

 

[Diablo]

Does earning £50k per year make you 'rich?

Not mega but.....A lot richer than if you earn £25k

 

[Weststander]

I’m suggestion not removing the allowance at all. Just make it a straight 45% at 100K, and they’d probably collectively more tax. As it is now, anyone on that threshold will have limited motivation to do any overtime and/or put any extra in legal salary sacrifices such as pension.

Totally agree.

But now it's here, any government reinstating the tax free personal allowance for those earning between £100k up to infinity, will be lambasted as evil in serving the rich. Politics.

 

[KingKev]

No not as a single male in Brighton anyway. Maybe in lots of places around the rest of the country, you could have a comfortable lifestyle.

This. Working for a large national firm that has U.K.-wide salary scales (with a small uplift for central London) it is clear that regional variations in the cost of living are so vast that we need to move to localised income tax. £50k in Brighton is worth way less than it is worth in Hull or Halifax or Middlesbrough. It gets worse at lower salaries - £20k in Brighton is just about a living wage but would be very comfortable in other areas of the country.
No idea how anyone could live a happy and healthy life in London on £20k or less.

 

[zefarelly]

About 20 years ago, in our mid/late 20's myself and a group of mates, were starting to earn sensible money and could afford nice cars . . . I had a few old Cortinas then a '69 TVR . .mates bought new Lotus elise and Subarus etc, I was tempted but didn't join in . . . .20 years later I have a small collection of reasonably valuable classics, they have all sold their 'new' sports cars at considerable loss . . . . house ( and a few old guitars) aside about the only half wise investment I've ever made!

This all started about 20 years ago. We bought a small house (secondhand) on a Barrett's type estate in the Brighton area, and we drove relative paupers cars compared to everyone else on the estate.

Despite the houses costing just £100k to £200k, most of our neighbours drove brand new Mercs, BMW's and Audi's, x2 per household. Financed by PCP's (Personal Contract Purchase) apparently, where you can outgun your friends with a superior car.

 

[dazzer6666]

I’m not sure those cars are a symbol of wealth anymore.

PCPs mean just about anyone can drive a nice new car off a forecourt.


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PCP thing is interesting - when I changed my car last year, I simply couldn't get a sensible (comparable) deal by paying cash up front - taking out a PCP instead meant a whole load of discounts were triggered (dealer discount, manufacturer discount, finance discount etc) that wouldn't have been available if I'd paid up front.

 

[nwgull]

Totally agree.

But now it's here, any government reinstating the tax free personal allowance for those earning between £100k up to infinity, will be lambasted as evil in serving the rich. Politics.

I’m not so sure. Most people aren’t even aware that the 100-123K band exists, so the headline would be that the 45% threshold had been reduced from 150K to 100K. And like I say, it would probably affect people’s behaviour and result in a greater tax income to the treasury.

 

[zefarelly]

I've never come close to buying a new car, I don't think many, if any do any more ? I guess, like my neighbour with a Porsche 4x4, (turbo tractor) its just a lease car . . . . or a posh hire he's wasting £600 a month on!

PCP thing is interesting - when I changed my car last year, I simply couldn't get a sensible (comparable) deal by paying cash up front - taking out a PCP instead meant a whole load of discounts were triggered (dealer discount, manufacturer discount, finance discount etc) that wouldn't have been available if I'd paid up front.