Humble brag is humble. Let me counter your humble brag with boo hoo, let me know when you have to worry about additional rate.
Tax - Wheres the incentive to earn more
- Thread starter ProStreet
- Start date
That is my main point, the interest rate, if it was RPI I'd be quarter/ half way in paying it off by now.
Similar circumstances to yourself, when I hit the 40% tax bracket I just upped my salary sacrifice pension contributions. More money in my pension, student loan payments dropped and I still take home basically the same give or take a bit. If I get a bonus then a lump sum is normally taken but that is what it is, without my student loan I don't go to uni and probably don't hit this level of earnings so....meh?
I honestly don't even look at the student loan amount, if I pay it off or not it doesn't really matter. I certainly don't think I will ever make my own contributions on top to lower the amount, a lot more I would rather do with my money.
I honestly don't even look at the student loan amount, if I pay it off or not it doesn't really matter. I certainly don't think I will ever make my own contributions on top to lower the amount, a lot more I would rather do with my money.
I would say you fall out of the typical envelope of graduates. Put yourself in some of their shoes earning less than half of your salary and seeing their student loan balance increase each year because their contributions aren't even clearing the interest.
It's compounded anyway, so it might not look like you're clearing much at the start, but look at it after 10 years and you'll probably be clearing at least half of it.
BTW i don't disagree that the interest rates suck - i for one am glad my loan was on plan 1.
Yes, your OP is terribly written (that's me being harsh but fair rather than insulting) but it was evident the interest rate looked to be your main complaint.
My contributions are not clearing the interest? And those on lower salaries pay less interest. The interest rate is stepped based on salary, which is another joke.
Soldato
If you are not happy now, just wait until you earn over 100k and they start clawing back your personal allowance.....
Yes this happened to my brother he started earning less when he got a payrise. Moved to HK and now earning £££££.
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If you're happy in job i can't see the issue. Maybe if you live in a super expensive area, London f.e, things might be a bit tight?
You should direct your frustration at the bums, and big business. Lower earners can't be expected to pay more as they have not much to start with. Without the lower earners the world wouldn't move, talking nurses, bin men, etc.
Part of the reason i never went to uni was the debt, the other part was not knowing what i wanted to do, so yeah needless debt for me.
Though i know you know this all already and you're just frustrated for the same reason we all are.
You should direct your frustration at the bums, and big business. Lower earners can't be expected to pay more as they have not much to start with. Without the lower earners the world wouldn't move, talking nurses, bin men, etc.
Part of the reason i never went to uni was the debt, the other part was not knowing what i wanted to do, so yeah needless debt for me.
Though i know you know this all already and you're just frustrated for the same reason we all are.
Btw the maths on this doesn't make a lot of sense. £5k interest on a £40k loan is about twice what I'd expect.
This is unlikely unless your brother was in a very unique set of circumstances (e.g. pension contributions exceeded annual/lifetime allowance).
How is that possible?
The incentive is the extra money in your bank account.
You knew the loan situation before you started your degree, so you knew what you were getting in to. With the salary you're earning it will be a piece of **** to pay off that loan in a few years, if you want to do something about rather than just moan.
I've lived in countries with <10% tax take, and those with >50%. I'd much rather live in the countries with a high tax take....but things like healthcare, infrastructure, pensions are things that don't seem that important when you're young.
For the record, I think rewarding people for educating themselves and providing skills to the workplace, by loading them down in debt, is absolutely ludicrous....but that's the retarded way this country works.
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Soldato
It's possible in the £50k-£60k bracket too, if you've got something like 7 kids. Or 6 and a student loan.
Soldato
Child benefit clawback
As mentioned earlier, I have a marginal rate of about 60% with two kids and no student loan. It's worse for every additional child, and can go over 100%
Is that because you claimed child benefit when your salary exceeded the threshold?
Soldato
You lose child benefit incrementally between 50 and 60k.
Annually, two kids gives you £1828 benefit. Earn an extra £1k and you lose 10% of your benefit, so £182.80. That's 18.3% extra tax on your £1k pay rise.
Gotcha. It is a strange way of looking at it but I guess it makes sense. I have a similar situation where I claim £2k in tax free childcare but I have to keep my adjusted net income below a certain level otherwise I have to pay back £2k which would actually cost me something like £6k in salary.
Soldato
It gets taken back through your tax code, or through a tax return, rather than by reducing the benefit payment, so it's sensible to think of it as a tax