First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
What firm are you at? Do they allow them to go part- time?
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First World problem. Privileged group moaning about their lot and expecting sympathy.
If this is the biggest problem in your life you don't have too much to worry about.
The point is it’s no longer a “privileged group”. £100k a year in London isn’t a lot. You can have highly specialised relatively junior roles popping into £100k territory. I want people to earn as much as they can so the tax man can take as much as they can without hurting productivity. The 65% tax trap doesn’t do either.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First World problem. Privileged group moaning about their lot and expecting sympathy.
If this is the biggest problem in your life you don't have too much to worry about.
The point is it’s no longer a “privileged group”. £100k a year in London isn’t a lot. You can have highly specialised relatively junior roles popping into £100k territory. I want people to earn as much as they can so the tax man can take as much as they can without hurting productivity. The 65% tax trap doesn’t do either.
Throw in NI, Student Loan, if they have kids the loss of child benefit and the loss of free childcare it's quite possible to have a marginal tax rate well into the 80's%.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First World problem. Privileged group moaning about their lot and expecting sympathy.
If this is the biggest problem in your life you don't have too much to worry about.
I've always questioned how much extra the 62% tax actually raised, everyone I know (including myself a while back) who was in that £100 to around £130k bracket simply put more into pension than they would normally so no money was raised (in fact tax revenue would have been lost). But I guess it was made up on people who were past that band and couldn't avoid it.
The real killer though is if you have children, as is stated moving from just under £100k to say 110k actually means you are worse off.
Whilst you may view it as privileged, I don't think many people would be happy to get a promotion and an increased salary but actually be financially worse off. Work always has to pay (again part of the problem with some benefit claimants who were worse off when they went to work)
So the equivalent tax rate on £100,000 in Dubai would be 11.5%, and 24% in the US (before state income tax, if applicable).
It would, but things like health insurance (especially when you consider copayments) are much higher than in the U.K. Comparing headline tax rates across geographies with vastly different systems is a silly game.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First World problem. Privileged group moaning about their lot and expecting sympathy.
If this is the biggest problem in your life you don't have too much to worry about.
The point is it’s no longer a “privileged group”. £100k a year in London isn’t a lot. You can have highly specialised relatively junior roles popping into £100k territory. I want people to earn as much as they can so the tax man can take as much as they can without hurting productivity. The 65% tax trap doesn’t do either.
Throw in NI, Student Loan, if they have kids the loss of child benefit and the loss of free childcare it's quite possible to have a marginal tax rate well into the 80's%.
Student loan is what kills me (as a late 20s worker) - I pay over £600 a month on repayments just to service the interest (the interest rate on it was 13% over last few years) so it has ballooned to a sum I could never repay.
However, I could never have the qualifications and job (and salary) without the maximum loans to fund it - so swings and roundabouts I guess.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First World problem. Privileged group moaning about their lot and expecting sympathy.
If this is the biggest problem in your life you don't have too much to worry about.
The point is it’s no longer a “privileged group”. £100k a year in London isn’t a lot. You can have highly specialised relatively junior roles popping into £100k territory. I want people to earn as much as they can so the tax man can take as much as they can without hurting productivity. The 65% tax trap doesn’t do either.
Throw in NI, Student Loan, if they have kids the loss of child benefit and the loss of free childcare it's quite possible to have a marginal tax rate well into the 80's%.
Student loan is what kills me (as a late 20s worker) - I pay over £600 a month on repayments just to service the interest (the interest rate on it was 13% over last few years) so it has ballooned to a sum I could never repay.
However, I could never have the qualifications and job (and salary) without the maximum loans to fund it - so swings and roundabouts I guess.
Dont get me started on the regressive poverty graduate tax! Just turned 30. We both have additional masters loans too. Killer.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First World problem. Privileged group moaning about their lot and expecting sympathy.
If this is the biggest problem in your life you don't have too much to worry about.
I've always questioned how much extra the 62% tax actually raised, everyone I know (including myself a while back) who was in that £100 to around £130k bracket simply put more into pension than they would normally so no money was raised (in fact tax revenue would have been lost). But I guess it was made up on people who were past that band and couldn't avoid it.
The real killer though is if you have children, as is stated moving from just under £100k to say 110k actually means you are worse off.
Whilst you may view it as privileged, I don't think many people would be happy to get a promotion and an increased salary but actually be financially worse off. Work always has to pay (again part of the problem with some benefit claimants who were worse off when they went to work)
Yeah my plan is to salary sacrifice until I can't go any further eg hitting pension limits etc, then to reduce working days, not sure I'll ever bother earning more than £100k a year as far as HMRC are concerned, it's pointless with the fact I'm hoping for childcare in the future etc as planning to have kids. Difference with me is I'm not a HENRY, I already have a house, and although I wouldn't consider myself "rich" (who does) I'm definitely comfortable enough to not need to earn over £100k declared to HMRC as I don't need to save for a deposit etc.
Effectively once I hit a salary of around £160k (pension contribution of £60k), I'll just work less when I get pay rises.
This doesn't really benefit anyone, I'll retire like a king though.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
First World problem. Privileged group moaning about their lot and expecting sympathy.
If this is the biggest problem in your life you don't have too much to worry about.
It's a problem for society. It flies in the face of a graduated tax system, something I thought you would be in favour of. Someone earning a lower salary than someone else should not have a higher marginal tax rate than someone earning more than them.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
Young people tend to be stupid when it comes to their pension. Also a 4 day week is probably more appealing for lifestyle.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
Young people tend to be stupid when it comes to their pension. Also a 4 day week is probably more appealing for lifestyle.
This is a very ageist comment. A lot of people I know are actually doing the opposite and putting a lot into their pension for compounding growth and 25% tax free lump sum - hopefully for the maximum amount at a £1m pension in their 60s.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
Young people tend to be stupid when it comes to their pension. Also a 4 day week is probably more appealing for lifestyle.
This is a very ageist comment. A lot of people I know are actually doing the opposite and putting a lot into their pension for compounding growth and 25% tax free lump sum - hopefully for the maximum amount at a £1m pension in their 60s.
Agreed. The people I know who around my age who are being "stupid" on their pensions are on much lower salaries and are opting out because they need the cash to pay rent and are also of the view the planet likely won't exist in its current state by the time they hit pension age therefore its pointless.
I don't completely agree with that viewpoint but am lucky enough to be able to pay into a pension and still afford to live.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
Young people tend to be stupid when it comes to their pension. Also a 4 day week is probably more appealing for lifestyle.
This is a very ageist comment. A lot of people I know are actually doing the opposite and putting a lot into their pension for compounding growth and 25% tax free lump sum - hopefully for the maximum amount at a £1m pension in their 60s.
Agreed. The people I know who around my age who are being "stupid" on their pensions are on much lower salaries and are opting out because they need the cash to pay rent and are also of the view the planet likely won't exist in its current state by the time they hit pension age therefore its pointless.
I don't completely agree with that viewpoint but am lucky enough to be able to pay into a pension and still afford to live.
Without wanting to turn this into our own little circle jerk as we clearly agree.
Your point is spot on, these people aren’t being ‘stupid’ they have no alternative - which is a huge structural issue down the line.
The rise also of ‘there’s no guarantee tomorrow will come’ crowd too - but statistically for most it will eventually and so you need to plan now.
I live within my means (most important thing) and prioritise these things because that’s my way but can certainly sympathise with others not so aware / fortunate.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
Young people tend to be stupid when it comes to their pension. Also a 4 day week is probably more appealing for lifestyle.
This is a very ageist comment. A lot of people I know are actually doing the opposite and putting a lot into their pension for compounding growth and 25% tax free lump sum - hopefully for the maximum amount at a £1m pension in their 60s.
Agreed. The people I know who around my age who are being "stupid" on their pensions are on much lower salaries and are opting out because they need the cash to pay rent and are also of the view the planet likely won't exist in its current state by the time they hit pension age therefore its pointless.
I don't completely agree with that viewpoint but am lucky enough to be able to pay into a pension and still afford to live.
Without wanting to turn this into our own little circle jerk as we clearly agree.
Your point is spot on, these people aren’t being ‘stupid’ they have no alternative - which is a huge structural issue down the line.
The rise also of ‘there’s no guarantee tomorrow will come’ crowd too - but statistically for most it will eventually and so you need to plan now.
I live within my means (most important thing) and prioritise these things because that’s my way but can certainly sympathise with others not so aware / fortunate.
I’ll admit I’m not totally clued up on the graduate loans, but if you salary sacrifice pension contribution’s (appreciate not all companies do that) does that lower your salary and therefore your loan repayments (that’s at least what the staff pension advisors say/advise at work).
appreciate for the lowest earners that won’t apply and have different challenges.
Ive been playing with trading 212 for a while, its great for beginners and day traders.
One thing I've also been measuring is the success of the pies that totally philanthropic users share for all manner of shit. One of them has not only got the same companies as we're on my c**t list, he's found every shady, questionable and outright immoral business listed on the stock exchange and made a pie for them too!
Anyway loads of these pies are great, properly researched. Loads of data and so easy to understand. I like HL but get lost in jargon very quickly, lots of sneaky fees too.
I have no doubt that the 212 bubble will burst, they must be building up a loss leading subscriber base waiting for someone else to buy the platform out. Don't know but I'm having fun with it
I've been using it for a while as well and agree it's good.
I really like the flexible ISA element and how easy it is to switch between S&S ISA and the cash.
You can move sums contributed from your current allowance between a cash and stocks/shares ISA for the 25/26 tax year?
Ive been playing with trading 212 for a while, its great for beginners and day traders.
One thing I've also been measuring is the success of the pies that totally philanthropic users share for all manner of shit. One of them has not only got the same companies as we're on my c**t list, he's found every shady, questionable and outright immoral business listed on the stock exchange and made a pie for them too!
Anyway loads of these pies are great, properly researched. Loads of data and so easy to understand. I like HL but get lost in jargon very quickly, lots of sneaky fees too.
I have no doubt that the 212 bubble will burst, they must be building up a loss leading subscriber base waiting for someone else to buy the platform out. Don't know but I'm having fun with it
I've been using it for a while as well and agree it's good.
I really like the flexible ISA element and how easy it is to switch between S&S ISA and the cash.
You can move sums contributed from your current allowance between a cash and stocks/shares ISA for the 25/26 tax year?
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
Young people tend to be stupid when it comes to their pension. Also a 4 day week is probably more appealing for lifestyle.
This is a very ageist comment. A lot of people I know are actually doing the opposite and putting a lot into their pension for compounding growth and 25% tax free lump sum - hopefully for the maximum amount at a £1m pension in their 60s.
Agreed. The people I know who around my age who are being "stupid" on their pensions are on much lower salaries and are opting out because they need the cash to pay rent and are also of the view the planet likely won't exist in its current state by the time they hit pension age therefore its pointless.
I don't completely agree with that viewpoint but am lucky enough to be able to pay into a pension and still afford to live.
Without wanting to turn this into our own little circle jerk as we clearly agree.
Your point is spot on, these people aren’t being ‘stupid’ they have no alternative - which is a huge structural issue down the line.
The rise also of ‘there’s no guarantee tomorrow will come’ crowd too - but statistically for most it will eventually and so you need to plan now.
I live within my means (most important thing) and prioritise these things because that’s my way but can certainly sympathise with others not so aware / fortunate.
I’ll admit I’m not totally clued up on the graduate loans, but if you salary sacrifice pension contribution’s (appreciate not all companies do that) does that lower your salary and therefore your loan repayments (that’s at least what the staff pension advisors say/advise at work).
appreciate for the lowest earners that won’t apply and have different challenges.
Yes - for an undergrad loan it’s just 9% of your net pay over something like £27k - but I have a postgrad loan too - so this is another 6% on top on anything over £21k- so another 15% on top of 40% income tax and NI etc
I do salary sacrifice for my pension - of 10% - but that’s more for the reasons I posted above and not to avoid repaying the loan - as it’s unavoidable basically.
When I turn 52 it will be wiped away and I will suddenly get - 10% pay rise for doing nothing.
Equally, people who have no student loan debt get paid 10% more than me to do the exact same job!
Edit: the above sounds like a real pity me but it’s not - I’m grateful for the loans in the first place but I didn’t really know what I was taking on as a financial illiterate 18 year old and it should come with more warnings about how it can affect you later on.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
What firm are you at? Do they allow them to go part- time?
We're a small firm specializing in planning law, just 11 partners and 50 staff. Yep, we are fine with it.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
Why don't they just continue on 5 days a week and pump the income earnt over £100k into a pension?
Yeah. That's what I'd do. But I'm in my mid 50s and my kids are grown up. I might feel different at 32 with two kids.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
What firm are you at? Do they allow them to go part- time?
We're a small firm specializing in planning law, just 11 partners and 50 staff. Yep, we are fine with it.
Fair enough - I assumed you were at a big city firm if the junior lawyers were on £100k + to even need to consider that.
Unless you are like a city boutique perhaps.
I am a lawyer too - and I just wondered whether a city firm would allow such a thing considering the notoriously bad work / life balance.
First read about "Henry's" in a great article in The Economist, Standard have done a good article below. I find this area and this group of people fascinating.
It’s becoming a major problem in London. The 65% tax trap is real. A lot of middle managers are now getting caught up in it. 100k a year isn’t a lot anymore. It hurts productivity (people don’t want to get a raise above 100k or start dumping it into their pensions) and hurts the tax man. Overall bad for everyone.
Yep, we've got junior solicitors asking to go to a4 day week to avoid it.
What firm are you at? Do they allow them to go part- time?
We're a small firm specializing in planning law, just 11 partners and 50 staff. Yep, we are fine with it.
Fair enough - I assumed you were at a big city firm if the junior lawyers were on £100k + to even need to consider that.
Unless you are like a city boutique perhaps.
I am a lawyer too - and I just wondered whether a city firm would allow such a thing considering the notoriously bad work / life balance.
Yeah, we're a City boutique - Town Legal. Exiles from Herbies, Links, Norton Rose etc. We pay a bit less than silver circle but close and are more chilled out. Where are you?
Comments
https://www.standard.co.uk/lifestyle/henrys-high-earners-not-rich-yet-london-struggling-b1238642.html
If this is the biggest problem in your life you don't have too much to worry about.
The real killer though is if you have children, as is stated moving from just under £100k to say 110k actually means you are worse off.
Whilst you may view it as privileged, I don't think many people would be happy to get a promotion and an increased salary but actually be financially worse off. Work always has to pay (again part of the problem with some benefit claimants who were worse off when they went to work)
Effectively once I hit a salary of around £160k (pension contribution of £60k), I'll just work less when I get pay rises.
This doesn't really benefit anyone, I'll retire like a king though.
That's socialism 101 comrade!
I don't completely agree with that viewpoint but am lucky enough to be able to pay into a pension and still afford to live.
appreciate for the lowest earners that won’t apply and have different challenges.
@Rob7Lee
I do salary sacrifice for my pension - of 10% - but that’s more for the reasons I posted above and not to avoid repaying the loan - as it’s unavoidable basically.