One in Four full time workers to earn £42k+ by 2015

HAMISH_MCTAVISH

Grant Thornton, the accountancy firm, says that if wages increase at the rate predicted by government economists there will be a record 5.5 million higher rate taxpayers by 2015 earning more than £42,475 per year.

The number of people in full-time employment is approximately 21 million.

There are a further 8 million part timers, and 4 million self employed/contractors.

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8900873/1.4m-extra-people-to-pay-higher-rate-tax.html

http://www.telegraph.co.uk/finance/personalfinance/8139883/Number-of-part-time-workers-hits-record-high-as-firms-reluctant-to-take-on-full-time-staff.html

That's a pretty staggering figure. One in four full time employees will shortly be earning more than £42,445 per year. And of course, a further large number of self employed/contractors will be as well, but are not included in these figures.

I have to say I was surprised, I had no idea that many people were earning that much money.

gailey_2

I think its probably about right as

teachers
high grade nurse
retail; store managers earn that.

over next few years more and more people be dragged into higher rate tax bracket.
if they have kids they will lose their child benefit in 2013 as £42,000 is limit.

only slight good news is the lower rate tax think aim is to move up to £10,000 when I started working was £4500. so the higher earner might be equal or slightly worse off I guess.

plus thats gross figure.

net with rising living costs does not seem to go that far.

Aberdeenangarse

...and nearly one in four living in Poverty.

http://www.poverty.org.uk/summary/key%20facts.shtml

Generali

Aberdeenangarse wrote: »

...and nearly one in four living in Poverty.

http://www.poverty.org.uk/summary/key%20facts.shtml

Not true. One in 4 live on 60% or less of the median household income.

AIUI that includes singles without kids for example and pensioners that own their property outright and have a low income but also a lower need for an income. I don't think it's reasonable to describe people like that as poor.

chewmylegoff

HAMISH_MCTAVISH wrote: »

Grant Thornton, the accountancy firm, says that if wages increase at the rate predicted by government economists there will be a record 5.5 million higher rate taxpayers by 2015 earning more than £42,475 per year.

The number of people in full-time employment is approximately 21 million.

There are a further 8 million part timers, and 4 million self employed/contractors.

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8900873/1.4m-extra-people-to-pay-higher-rate-tax.html

http://www.telegraph.co.uk/finance/personalfinance/8139883/Number-of-part-time-workers-hits-record-high-as-firms-reluctant-to-take-on-full-time-staff.html

That's a pretty staggering figure. One in four full time employees will shortly be earning more than £42,445 per year. And of course, a further large number of self employed/contractors will be as well, but are not included in these figures.

I have to say I was surprised, I had no idea that many people were earning that much money.

i'm not sure that the self employed / contractors / pensioners / early retired with loads of investment income who don't work etc. are actually excluded from the 5.5 million estimate - the article doesn't make it clear either way. unless i've missed something startling obvious.

it also seems to be (although this is just an educated guess) at the very least an estimate based on taking the known number of higher rate taxpayers now or recently, which presumably would include everyone, not just salaried employees, as a starting point and extrapolating forwards.

also, there are plenty of people in part-time employment who earn more than £40k. half the people in my office seem to only work 4 days a week, and all of them without fail are definitely on more than £40k.

so it's might be more like 1 in 6 FTE and half of the contractors? and i expect that the vast majority of the 5.5 million are crammed into the south east.

PasturesNew

I wish I could be "dragged" into higher rate tax bands

chewmylegoff

Aberdeenangarse wrote: »

...and nearly one in four living in Poverty.

http://www.poverty.org.uk/summary/key%20facts.shtml

you forgot to put "poverty" in inverted commas. based on the criteria here you could have a look at monaco and find that a quarter of the people lived in "poverty" as well, because they only had one yacht.

kabayiri

chewmylegoff wrote: »

..
so it's might be more like 1 in 6 FTE and half of the contractors? and i expect that the vast majority of the 5.5 million are crammed into the south east.

What about the effects of movement of labour as big companies seek to cut costs.

It's well known that the BBC have moved a fair chunk of jobs to Manchester. Will we see salaries come down as staff retire and their replacements are cheaper to recruit ?

Also, the continued growth in using immigrant labour is likely to push salary levels down isn't it ?

You can live reasonably outside the South East on less than £42K.

geneer

looks likt those rent rises aren't so devastating then.

Graham_Devon

Couple of key points you appear to have missed Hamish.

This is based on historic figures. Even the bloke himself suggests an average wage increase of 2.5% may actually be more appropriate. So that suggests that their calculations are based on the average earner earning higher wage rises than 2.5% each year. Seems very optimistic today. But may fall in line with historical data.

Even if wages grow at a more conservative 2.5 per cent, more than 700,000 people will become higher or additional rate taxpayers in the same period.

He said he used figures on wage growth from the Government's Office of Budgetary Responsibility, but believed that the more conservative 2.5 per cent figure might be more appropriate. Middle ranking policemen and teachers, as well as senior nurses, face becoming higher rate taxpayers under these conditions.

Basing it on 2.5%, which is still pretty generous in the current climate, it would see the number from your title halved.

I'd love to know what figure they have actually assumed most workers are getting, as it's way over 2.5%, but they don't say.

brit1234

HAMISH_MCTAVISH wrote: »

Grant Thornton, the accountancy firm, says that if wages increase at the rate predicted by government economists there will be a record 5.5 million higher rate taxpayers by 2015 earning more than £42,475 per year.

I earn far more than that now even though my wages being frozen for a couple of years. Despite that I can't afford a property, that must be why house prices keep falling. They will fall till they are affordable again..