Is it worth working full time at £10 an hour wage due to Travel expenses

extrovert

Dear forum members

I am new to the forum and hoping that I'll get the best and sincere advice from this forum.

Following is my situation

I am married and We have two kids. My wife isn't working as she used to work in Tesco and her wage doesn't justify putting the kids in nursery and going to work.
I live in West Yorkshire and used to work in Leeds. I was made redundant in Feb 2010. I struggled to find work for three months and luckily found a temporary job on 01/05/2010 in Lancashire paying £10 an hour. Job was initially for few months but got extended for another few and then eventually I have become permanent employee earning £18k p.a.
I am quite happy with the job,type of work, responsibility etc. I have been travelling by train 5-6 days in a week to get to work. return ticket cost is £15 a day.

When I renewed my tax credits this year my working tax credit has been stopped due to my last year wage higher than the threshold. Now I am so confused about what to do due to me being worse off working full time hours compared to part time hours or even working full time at national minimum wage near where I live.

I have checked different scenarios on entitledto.co.uk and to my disappointment I am at least £3000 worse off a year. Following are the calculations

Current Scenario: 35 hours a week:

• Wage per hour: £10
• Salary before tax: £18200
• Salary after tax: £14738
• Housing benefit: £0
• Tax Credits: £5495
• Earnings after Tax: £20233
• Travel/Train Fare: £3900
• Net Earnings: £16333

Scenario 2: 30 hours a week

• Wage per hour: £10
• Salary before tax: £15600
• Salary after tax: £12970
• Housing benefit: £1407
• Tax Credits: £6561
• Earnings after Tax: £20938
• Travel/Train Fare: £3120
• Net Earnings: £17818

Scenario 3: 20 hours a week

• Wage per hour: £6
• Salary before tax: £6420
• Salary after tax: £6420
• Housing benefit: £4503
• Tax Credits: £9534
• Earnings after Tax: £20277
• Travel/Train Fare: £0
• Net Earnings: £20277

Scenario 4: 30 hours a week

• Wage per hour: £6
• Salary before tax: £9360
• Salary after tax: £8728
• Housing benefit: £2730
• Tax Credits: £9119
• Earnings after Tax: £20577.52
• Travel/Train Fare: £0
• Net Earnings: £20577.52

The last two scenarios are based on if I find a job near where I live therefore no travelling costs.

I would appreciate if I can have some guidance regarding next course of action. Please note I spend at least 3 hours a day travelling to and from work which I can do extra hours if I can find in my town. I have also considered moving to where I work but the rents are at least £300 more than what I am paying at the minute.

Sorry for such a long post but wanted to draw a clear picture of my situation.

Thanks

dmg24

So you have two healthy adults in your household, and you are trying to justify working only 20 hours between you?

Tigsteroonie

Would your current employer allow you to work the lesser hours?

Are there jobs to be found easily in your local town?

Would you be happy with one of those lower-paid jobs? (ie would you be fulfilled/bored)

What are the prospects in your current job for promotion/higher earnings, as compared to if you were working closer to home in the lowerpaid job?

Do you have career plans that this job helps towards, or are we talking "just a job"?

All things that need to be considered. I could probably work on the checkout at the local Tesco or Morrison for minimal wage, zero commute, and be better off with HB, CTB and higher WTC; but I am thinking longer term and working in my chosen field in an organisation that gives me promotion prospects.

Caz3121

you need to also remember that tax credits are based on last years income so I assume you are changing it part way through the year in which case you will have no disregard so unless you include an estimate for the extra hours you will have an overpayment
Also if you are including an estimate this is based on the full years income so we are currently 2/12ths in so would be old income + new income so would be higher than your figs = less tax credits
Can you not get a travel card/season ticket for the train?

extrovert

dmg24 wrote: »

So you have two healthy adults in your household, and you are trying to justify working only 20 hours between you?

I am not trying to justify working 20 hours, that's what you are assuming. I am just asking for the sincere advice about what any sane person should do in the above mentioned situation.

extrovert

Tigsteroonie wrote: »

Would your current employer allow you to work the lesser hours?

Are there jobs to be found easily in your local town?

Would you be happy with one of those lower-paid jobs? (ie would you be fulfilled/bored)

What are the prospects in your current job for promotion/higher earnings, as compared to if you were working closer to home in the lowerpaid job?

Do you have career plans that this job helps towards, or are we talking "just a job"?

All things that need to be considered. I could probably work on the checkout at the local Tesco or Morrison for minimal wage, zero commute, and be better off with HB, CTB and higher WTC; but I am thinking longer term and working in my chosen field in an organisation that gives me promotion prospects.

I haven't spoken to my current employer yet, they may allow less hours. I love my job as it is somehow related to what I studied. Progression opportunities are possible after at least two years that's when my manager will allow me to apply for next position. I would be very bored at working chekout job as I have done all these jobs for the last 10 years sainsburys, Mcdonals etc and it took me 10 years to get to the position where I am. So I am basically stuck between cchoicces

Adereterial

Have you looking into whether it would be cheaper for you to buy a monthly/annual season ticket to reduce the cost of your travel?

My daily train cost is £11.60 - so £58 per week, £2784 a year based on 48 working weeks
A weekly pass is £50.60 - £2428 a year
A monthly pass is £194.60 - £2335.20 a year
An annual pass is £2024.

Even buying a weekly pass rather than a daily ticket should save you money.

extrovert

Adereterial wrote: »

Have you looking into whether it would be cheaper for you to buy a monthly/annual season ticket to reduce the cost of your travel?

My daily train cost is £11.60 - so £58 per week, £2784 a year based on 48 working weeks
A weekly pass is £50.60 - £2428 a year
A monthly pass is £194.60 - £2335.20 a year
An annual pass is £2024.

Even buying a weekly pass rather than a daily ticket should save you money.

I havn't looked at annual passes. I didn't even know they do cross county annual passes. I know they do annual passes to travel within Yorkshire. Do you travel to different county for work?

beecher2

extrovert wrote: »

I havn't looked at annual passes. I didn't even know they do cross county annual passes. I know they do annual passes to travel within Yorkshire. Do you travel to different county for work?

Have a look here to see

http://ojp.nationalrail.co.uk/service/seasonticket/search

extrovert

Thanks, yes its £3512 for an annual pass. My other option could be sticking to my current job for say six months or a year and when a position becomes vacant in my town or near get transfered but there is no guarantee of that.is there?

Macro_3

When you look at the finances as you have, it is easy to see why some people work the minimum 16 hours per week and don't try for more. It's a very short term attitude, though.

Your children are small now, but what about in a couple of years time when they start school? If you take the minimum wage 20hr job now, then any extra hours you/your wife take on when your children are of school age will only chip away at your benefits and you will see no real gain.

However, if you accept that you are no better off at present but stick with the better paid job, then when your children go to school your wife could get a job around school hours and you will be miles better off long term. You would also have more scope for advancement and increases in your income.

Edited to add - could your wife return work in the evenings, perhaps, or look for some sort of work that could fit around the children to maximise your income?