Tax - Wheres the incentive to earn more

[ProStreet]

'One of...' oh to have such troubles...

Pay off the loan with the highest interest rate first. That's likely your student loan. Beyond that, your properties are likely appreciating in value whereas your student loan is not.

Lol I didn't mean to come across like that. Its just a flat that I can't sell and want to get rid of (and is depreciating in value due to it being a leasehold / no one wants flats or properties without a garden anymore!!).

 

[ProStreet]

Presumably your mortgage rates are extremely low as their rates are more directly set by the market?

High interest credit card -> Loans -> Student Loan -> Mortgages is probably the best course of action. Especially if you are going to continue your successful trajectory, earnings wise.

Got no credit card or loans so good there. Mortgages are fixed at c2% so yes student loan is the highest one. Ill aim to have it cleared within 5 years I think.

 

[ProStreet]

5 years on your salary? You can (and should) do much better than that. The compound effect will save you a fortune.

The extension for my house comes first

 

[ProStreet]

Do you mind me asking what you do for a living to earn £70k a year? I've done a Masters in a science degree and I'm also 5 years into employment and would love to know how to get there.

Thanks

CA.

 

[ProStreet]

You're a CA but don't understand interest rates or taxation? Pull the other one.

Lol. I underestimated the balance on my student loan.

How do I not understand taxation? I just don't agree with the rates.

 

[ProStreet]

Does the OP get how the tax systems works.

If your earnings go above the higher tax pay bracket, that "part" of the earnings is taxed more, but not your entire salary, meaning you still have more in your pocket with a higher salary.

There seems to be a mindset embedded in British people that they must not pay tax, as if its the root of all evil or something.

Whenever in a face to face conversation someone moans, its very swift and easy to make them go quiet.

I simply ask would you rather be earning 100k paying 40% tax or 20k paying 20%.

Lol.

That is not the point and of course I know about tax brackets. I'm a CA.

 

[ProStreet]

So what is the point?

Someone moaning about earning enough to be in a higher tax paying bracket, do you realise how many people in this country would love to be in that position?

You cant be that badly off if £3400 isnt an incentive to you.

High interest rate on student loan resulting in me paying more tax for a longer period than if the rate was reasonable, such as it was under plan 1. That's all.

 

[ProStreet]

What is a reasonable rate?

Given how interest rates are rock bottom at the moment, maximum RPI.

Plan 1 was £3k pa fees and 1% interest rate.

Plan 2 is £9k pa fees and 5.6% interest rate (and will rise as inflation expectations now are much higher)