60K Job In London = Minimum Wage Job Oop North

[ItsColdUpHere]

In the future, for a family with 3 kids, 60k job in London = Minimum wage job oop North

Here's the maths.

Minimum wage job, 40 hours, £6.19 an hour, with universal credits and child benefit, take home = £2057

60K london job, graduate with no universal credits and no child benefit (60k rule), paying student loan of 9% over 21k take home = £3188.

On the face of it, the graduate on 60k is £1130 a month better off than the shelf stacker, which represents a marginal tax rate of about 72%, as he's paid 48k more but only gets about 13K more to take home.

But its actually worse than that, as the average London Rent is about £800 more than in the North East. So the London family renting on a 60K salary is only £330 a month better off than a minimum wage shelf stacker up North after paying rent.

For buyers its even worse, as that £1130 extra will pay 214k extra for a mortgage at 4%. But houses in the capital are more than 214k extra than in the North East. So a 60K a year house buyer in London is actually worse off than a minimum wage shelf stacker in Durham.

So if you have kids, move to the North East...

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PS. All of this is from a purely money point of view. I can easily see how from a lifestyle / opportunity / culture / loadsamoney point of view for some people London is the BEST place in the world to live.

I often work in London but I live in the Nortn East. Its like having a different exchange rate - earn at London Rates, spend at North East prices...

Edited March 4, 2013 by ItsColdUpHere

[m4nclad]

In the future, for a family with 3 kids, 60k job in London = Minimum wage job oop North

Here's the maths.

Minimum wage job, 40 hours, £6.19 an hour, with universal credits and child benefit, take home = £2057

60K london job, graduate with no universal credits and no child benefit (60k rule), paying student loan of 9% over 21k take home = £3188.

On the face of it, the graduate on 60k is £1130 a month better off than the shelf stacker, which represents a marginal tax rate of about 72%, as he's paid 48k more but only gets about 13K more to take home.

But its actually worse than that, as the average London Rent is about £800 more than in the North East. So the London family renting on a 60K salary is only £330 a month better off than a minimum wage shelf stacker up North after paying rent.

For buyers its even worse, as that £1130 extra will pay 214k extra for a mortgage at 4%. But houses in the capital are more than 214k extra than in the North East. So a 60K a year house buyer in London is actually worse off than a minimum wage shelf stacker in Durham.

So if you have kids, move to the North East...

-----------------------------------------------------------

PS. All of this is from a purely money point of view. I can easily see how from a lifestyle / opportunity / culture / loadsamoney point of view for some people London is the BEST place in the world to live.

I often work in London but I live in the Nortn East. Its like having a different exchange rate - earn at London Rates, spend at North East prices...

I live in the North West, and earn £40k a year , my wife is struggling to get a job with any significant hours, so is bringing in less than £300 a month. My take home is around £2200pm. We have 2 young kids. My job is incredibly stressful, I have to push myself to my limits to keep performing and to keep getting a payrise in line with inflation.....I suspected that tax credit top ups would be significant, but didn't realize it was so much. What is the point in striving, pushing myself and working hard, if you get near enough the same for doing something much less stressful? It just confirms what I already know....this country is stuffed.

[interestrateripoff]

The mathematical limits are being reached in the economy. London is sucking the wealth out of the rest of the country. If free market capitalism existed we would see rebalancing in the economy as work moved out of the expensive areas into the cheaper ones but that doesn't happen. I suspect this is one reason why complex societies collapse as wealth keeps accumulating in central administrative centres.

[ItsColdUpHere]

I had my eyes opened 10 years ago when my wife's best friend and her husband (3 kids - having kids is the key) got their tax credit assessment - £230 a week!! It basically doubled his wage. I thought she was mistaken and it must have been per month. I was wrong.

My calculation above is for Universal Credit - I did the same for tax credits and it was about £100 a month MORE.

[interestrateripoff]

I had my eyes opened 10 years ago when my wife's best friend and her husband (3 kids - having kids is the key) got their tax credit assessment - £230 a week!! It basically doubled his wage. I thought she was mistaken and it must have been per month. I was wrong.

My calculation above is for Universal Credit - I did the same for tax credits and it was about £100 a month MORE.

Tax credits where one of the biggest bribes ever given. It certainly did wonders for the housing market which is where the money went.

[easy2012]

I live in the North West, and earn £40k a year , my wife is struggling to get a job with any significant hours, so is bringing in less than £300 a month. My take home is around £2200pm. We have 2 young kids. My job is incredibly stressful, I have to push myself to my limits to keep performing and to keep getting a payrise in line with inflation.....I suspected that tax credit top ups would be significant, but didn't realize it was so much. What is the point in striving, pushing myself and working hard, if you get near enough the same for doing something much less stressful? It just confirms what I already know....this country is stuffed.

The law of diminishing return?

In exams too, it is easy to get 50%, 70% becomes rather hard, 90% becomes incredibly hard, 100% becomes nearly impossible

[ItsColdUpHere]

I just dont see how the capital can continue to function when people are working there ar##s off just for food and shelter. A slave gets food and shelter for his work...

[Hail the Tripod]

I just dont see how the capital can continue to function when people are working there ar##s off just for food and shelter. A slave gets food and shelter for his work...

A colleague was made redundant 2 years ago. He worked out he was about £40/month worse off unemployed than he was on his £26k/year full time job.

[worried1]

I live in the North West, and earn £40k a year , my wife is struggling to get a job with any significant hours, so is bringing in less than £300 a month. My take home is around £2200pm. We have 2 young kids. My job is incredibly stressful, I have to push myself to my limits to keep performing and to keep getting a payrise in line with inflation.....I suspected that tax credit top ups would be significant, but didn't realize it was so much. What is the point in striving, pushing myself and working hard, if you get near enough the same for doing something much less stressful? It just confirms what I already know....this country is stuffed.

There are two reasons why people do it:

1. They just don't realise how high the level of tax credits has become

2. They do realise that, but live in hope that this or a future government will come to it's senses and cancel tax credits or severely cut them back, meaning that the hard work will again start to pay off.

£60k is still a good salary, but when a minimum wage earner is effectively earning £40k it's buying power is significantly devalued and we get to the mess we are in now where even people earning over the national average wage have to be on benefits.

[motch]

A colleague was made redundant 2 years ago. He worked out he was about £40/month worse off unemployed than he was on his £26k/year full time job.

To which he could be £40 a month better off selling some tat on ebay or something, and still have time for jeremy Kyle and HOTH

Edited March 4, 2013 by motch

[CrashedOutAndBurned]

I live in the North West, and earn £40k a year , my wife is struggling to get a job with any significant hours, so is bringing in less than £300 a month. My take home is around £2200pm. We have 2 young kids. My job is incredibly stressful, I have to push myself to my limits to keep performing and to keep getting a payrise in line with inflation.....I suspected that tax credit top ups would be significant, but didn't realize it was so much. What is the point in striving, pushing myself and working hard, if you get near enough the same for doing something much less stressful? It just confirms what I already know....this country is stuffed.

There's not some sort of legally-enforced moral code that says society has to function for 'strivers' who abuse themselves in stressful jobs they don't even like much, if at all. After all, the mere pattern of land ownership and inherited privilege ensures people that sit on their **** get the biggest fruits of society's collective endeavours effort-free.

But I hear you. I wish we could go back to the days where the average houses cost £70k, with plenty of less-than-average houses at £40k and then get cut back this big tax-credit bureaucracy. Remove income tax - replace it with land value tax. Remove the extremely brutal cost of living and people would actively enjoy looking after themselves and 'getting on in life' once more.

I can see clearly how I could quickly manipulate myself into a position where I'd get pretty much what I earn now, possibly more, off the state - tell the Doctor I'm bipolar and can't leave the house, shuffle my savings into objects of value and say I have no savings, rent a bigger house for my family with HB than I could afford otherwise. BUT, call me insane, but I don't want to be beholden more than I have to be to the State, which goes around bombing countries for no good reason and a thousand other things I'd rather it didn't.

[Eddie_George]

To which he could be £40 a month better off selling some tat on ebay or something, and still have time for jeremy Kyle and HOTH

Exactly. Many on benefits are probably very active in the black economy to add insult to injury.

[CrashedOutAndBurned]

Exactly. Many on benefits are probably very active in the black economy to add insult to injury.

The black economy's great for the economy though. It's high velocity untaxed money being spent freely. That's why the war on drugs in a sham. The US economy benefits hugely from drugs money - tax it and regulate it and it's not nearly so potent. Okay, people get shot in drugs wars but, hey, it's all growth.

If a drugs dealer pops down the BMW dealer and gets a Chelsea Tractor I'm sure the salesman isn't complaining. Kerching.

So what if the benefits plebs peddle stuff on the side in a small way? Unfair on the morally upstanding taxpayer? Citizen's Income. Problem solved.

[The Ayatollah Buggeri]

The scenario described by the OP is the essential reason why significant numbers of people with the CV needed to earn a £60k salary are emigrating. There are very few £60k jobs available outside the south-east, and furthermore the nice places to live outside the south-east are almost as expensive as in it. House prices in the outskirts of York are very similar to those in the London suburbs, as they also are in the few parts of Leeds that are not chav-infested hellholes (e.g. Headingley and Roundhay).

When my American fiancee and I weighed up the pros and cons of living in Yorkshire or south-eastern California after we're married, it took us all of ten minutes to establish that there was no convincing case for Yorkshire. The most powerful argument in favour of me emigrating was that a three-bedroom detached house can be had for $150k in her neck of the woods, in a reasonable area. Other cost-of-living items are lower, too. So I'm leaving the UK in August, and there would have to be a full-scale HPC in Britain on the scale of the one that happened in 2008-09 in the Inland Empire before we would contemplate coming back.

Of my £43k salary, I reckon that about 60-70% of it goes in taxes of one form or another - say, £30k in total. That is £30k that the government will lose later this year, and I know countless friends and colleagues who are leaving or who are trying to leave - forced out by the high cost of living and the determination of governments to punish aspiration to independence and success by ensuring that minimum wage-earners and the unemployed have the same standard of living as higher-rate taxpayers.

[longtomsilver]

The scenario described by the OP is the essential reason why significant numbers of people with the CV needed to earn a £60k salary are emigrating. There are very few £60k jobs available outside the south-east, and furthermore the nice places to live outside the south-east are almost as expensive as in it. House prices in the outskirts of York are very similar to those in the London suburbs, as they also are in the few parts of Leeds that are not chav-infested hellholes (e.g. Headingley and Roundhay).

When my American fiancee and I weighed up the pros and cons of living in Yorkshire or south-eastern California after we're married, it took us all of ten minutes to establish that there was no convincing case for Yorkshire. The most powerful argument in favour of me emigrating was that a three-bedroom detached house can be had for $150k in her neck of the woods, in a reasonable area. Other cost-of-living items are lower, too. So I'm leaving the UK in August, and there would have to be a full-scale HPC in Britain on the scale of the one that happened in 2008-09 in the Inland Empire before we would contemplate coming back.

Of my £43k salary, I reckon that about 60-70% of it goes in taxes of one form or another - say, £30k in total. That is £30k that the government will lose later this year, and I know countless friends and colleagues who are leaving or who are trying to leave - forced out by the high cost of living and the determination of governments to punish aspiration to independence and success by ensuring that minimum wage-earners and the unemployed have the same standard of living as higher-rate taxpayers.

My wife was offered a job in Southern California only last week at appraisal time. We dismissed it for two reasons; first it was a grade lower (same pay) and second that the cost of living in California is eye watering.

No relocation packages and $100k salary.

[@contradevian]

To which he could be £40 a month better off selling some tat on ebay or something, and still have time for jeremy Kyle and HOTH

Not for much longer when Universal Credit comes in. I think the tax credits brigade will be in for a big shock and are falling into a trap.

[MongerOfDoom]

Not for much longer when Universal Credit comes in. I think the tax credits brigade will be in for a big shock and are falling into a trap.

A trap? I really don't understand what you mean. It's not like they are the ones who voted for it? Or like £500 a week is severe poverty?

[motch]

The black economy's great for the economy though. It's high velocity untaxed money being spent freely. That's why the war on drugs in a sham. The US economy benefits hugely from drugs money - tax it and regulate it and it's not nearly so potent. Okay, people get shot in drugs wars but, hey, it's all growth.

If a drugs dealer pops down the BMW dealer and gets a Chelsea Tractor I'm sure the salesman isn't complaining. Kerching.

So what if the benefits plebs peddle stuff on the side in a small way? Unfair on the morally upstanding taxpayer? Citizen's Income. Problem solved.

I must admit I was unemployed/claiming a few years ago only for about a year or two and i done a little bit of labouring type work on the side, very easily done if you're not stupid, so it goes on quite a bit.

[durhamborn]

In the future, for a family with 3 kids, 60k job in London = Minimum wage job oop North

Here's the maths.

Minimum wage job, 40 hours, £6.19 an hour, with universal credits and child benefit, take home = £2057

60K london job, graduate with no universal credits and no child benefit (60k rule), paying student loan of 9% over 21k take home = £3188.

On the face of it, the graduate on 60k is £1130 a month better off than the shelf stacker, which represents a marginal tax rate of about 72%, as he's paid 48k more but only gets about 13K more to take home.

But its actually worse than that, as the average London Rent is about £800 more than in the North East. So the London family renting on a 60K salary is only £330 a month better off than a minimum wage shelf stacker up North after paying rent.

For buyers its even worse, as that £1130 extra will pay 214k extra for a mortgage at 4%. But houses in the capital are more than 214k extra than in the North East. So a 60K a year house buyer in London is actually worse off than a minimum wage shelf stacker in Durham.

So if you have kids, move to the North East...

-----------------------------------------------------------

PS. All of this is from a purely money point of view. I can easily see how from a lifestyle / opportunity / culture / loadsamoney point of view for some people London is the BEST place in the world to live.

I often work in London but I live in the Nortn East. Its like having a different exchange rate - earn at London Rates, spend at North East prices...

Under universal credit a family with 3 children on NMW will bring home £800 a month from earnings + £840 universal credit + £170 child benefit = £1830.So slightly under what you said

Of course this only works until the children are 18 then the income drops to £800 a month.Plus under UC the 2nd partner will be under full conditionality once the youngest child is 5.

However for all the time these children are between 1 day and 18 there is no point earning more.The main driver for a job is to get one with the least stress and least work.

Increasing earnings wont get you anything extra so the idea is do as little as possible.

I hoped UC would reform welfare but it doesnt.Instead of dealing with the crazy incentives it just makes the stick bigger to hit people with.

Its one reason i left employment and set myself up self employed and make sure i pay very little tax,both income and fuel duty VAT etc.An employer phoned me last week desperate for the skills i have (pharma) but i turned them down simply as i dont want to earn more money and give up all my spare time just to be no better off and the government tax it all.

There really is no point working in the UK unless its for the minimum needed for tax credits/UC or a few hours self employed to pay the bills but avoid the tax.

That is why we will never leave this depression IMO until we have a collapse in state spending.The markets will have to enforce it on the government though.

[durhamborn]

Dont forget though that the north had all its factories closed that paid decent ages that kept people above welfare.

Its not the people at fault who get the benefits,its the crazy system that does everything to destroy productive industry at the same time as paying massive welfare.

Of course the massive welfare is paid for by taxing the middle class.All so the landed gentry and elite dont see people take their land back and hang them off lamposts.

Quite affective really in that the more they take off the middle class to keep those slightly below docile,the harder the middle class need to work to afford the lifestyle/house etc.

The only way to sort this out is for the middle class and all worders to down tool and avoid paying all tax.Until then keep bending over.

[ItsColdUpHere]

Under universal credit a family with 3 children on NMW will bring home £800 a month from earnings + £840 universal credit + £170 child benefit = £1830.So slightly under what you said

Of course this only works until the children are 18 then the income drops to £800 a month.Plus under UC the 2nd partner will be under full conditionality once the youngest child is 5.

However for all the time these children are between 1 day and 18 there is no point earning more.The main driver for a job is to get one with the least stress and least work.

Increasing earnings wont get you anything extra so the idea is do as little as possible.

I hoped UC would reform welfare but it doesnt.Instead of dealing with the crazy incentives it just makes the stick bigger to hit people with.

Its one reason i left employment and set myself up self employed and make sure i pay very little tax,both income and fuel duty VAT etc.An employer phoned me last week desperate for the skills i have (pharma) but i turned them down simply as i dont want to earn more money and give up all my spare time just to be no better off and the government tax it all.

There really is no point working in the UK unless its for the minimum needed for tax credits/UC or a few hours self employed to pay the bills but avoid the tax.

That is why we will never leave this depression IMO until we have a collapse in state spending.The markets will have to enforce it on the government though.

Re: Under universal credit a family with 3 children on NMW will bring home £800 a month from earnings + £840 universal credit + £170 child benefit = £1830.So slightly under what you said

If you work 40 hours a week at £6.19 an hour, you take home £964.67 a calendar month from £12,875 a year pre tax. (look at any online calculator) (and I stated 40 hours a week)

Child benefit for 3 children is £204.10 per calendar month - (20.3+13.4+13.4)*52/12

Universal credit would be £395 base + £585 child = £980 (see http://policyinpractice.co.uk/universal-credit/universal-credit-calculator/universal-credit-claim/)

Giving a total of £2,149 a calendar month, so I was miles under before. I'm glad you got me to check.

That calculator gives pay + credits (no child benefit included) of £1922, £20 less than my calcs as it doesn't include next years increased tax allowance.

I use calendar months as this gives a direct comparison to the 60K guy, as he will almost certainly be monthly paid.

Obviously I'm trusting the accuracy of the Universal Credit Calculator linked for the Universal Credit amount. The pay and child benefit calculations are definitely right though.

Edited March 4, 2013 by ItsColdUpHere

[ItsColdUpHere]

Dont forget though that the north had all its factories closed that paid decent ages that kept people above welfare.

Its not the people at fault who get the benefits,its the crazy system that does everything to destroy productive industry at the same time as paying massive welfare.

I didn't make any moral judgements.

Quite the opposite in fact - as I stated, if you have kids, you might as well move up North and have a better of standard of living. The system is what the system is, you might as well take advantage of it.

Edited March 4, 2013 by ItsColdUpHere

[19 year mortgage 8itch]

Frightening, isn't it? 40% tax payers no better off than than if they jacked it in and skived.

Was in an unglamorous part of Manchester today and my wife was asked 3 times if she paid for her prescriptions, mustn't happen very often. Tell me again, who are the mugs?

[joe_]

I must say I am shocked at the level of benefit. What's worse is that I realise now I could have claimed for the last 10 years - I always thought I was earning too much to claim.

It's quite tempting to just splurge my savings on the good life and then when I run out decide to start a business and have any shortfall topped off from benefits.

[mrtickle]

Re: Under universal credit a family with 3 children on NMW will bring home £800 a month from earnings + £840 universal credit + £170 child benefit = £1830.So slightly under what you said

If you work 40 hours a week at £6.19 an hour, you take home £964.67 a calendar month from £12,875 a year pre tax. (look at any online calculator) (and I stated 40 hours a week)

Child benefit for 3 children is £204.10 per calendar month - (20.3+13.4+13.4)*52/12

Universal credit would be £395 base + £585 child = £980 (see http://policyinpract...l-credit-claim/)

Giving a total of £2,149 a calendar month so I was miles under before. I'm glad you got me to check.

That calculator gives pay + credits (no child benefit included) of £1922, £20 less than my calcs as it doesn't include next years increased tax allowance.

I use calendar months as this gives a direct comparison to the 60K guy, as he will almost certainly be monthly paid.

Obviously I'm trusting the accuracy of the Universal Credit Calculator linked for the Universal Credit amount. The pay and child benefit calculations are definitely right though.

I'm trying to replicate what you did in that calculator, but I can't get it to match. Please can you tell me what you entered in "step 1"?

Ta