£40k, 3 kids, 2 adults. Liveable?

becominganobsessivesaver

Spendless wrote: »

Bare in mind that your OH will become a 40% tax payer. (Does he currently just miss?) A company car will affect his tax free personal allowance and will you be affected by cuts to child benefit next year? My advice is to see what his net income is once he has his pay-rise and then work out your figures based on that when you know what actual income you have coming in.

At £40k they should still be paying 20% tax (depending on company car). Also child benefit changes don't impact until the salary is over £50k.

OP the other thing to consider is what extra will be required from OH for this increase, longer hours, weekend working, calls at home etc. This could all impact your quality of life especially if you are the one left running 3 kids from one place to another.

POPPYOSCAR

I have two and now I wish I had gone for a third.

If it is what you really want to do then go for it.

onlyroz

I don't think you become a higher rate tax payer until you earn around £44k, and if you're close to the threshold then you can up your pension contributions to bring it below.

ukjoel

Dont think anyone has mentioned tax credits.

We have 3 kids and when I was working in a low paid job for a year we seemed to have more take home than we do now with me earning more than the figure your talking about.


Yes you will still pick up child benefit but bet your working tax credits and child tax credits take a hit.

Also 40k is great but if they then give him a company car the benefit in kind will add 5k to that. Now he is hitting higher rate tax.

Dont look at the headline figure - work out his take home each month. Work out if its guarunteed or is there a bonus element, work out how it will impact your tax credits.

Then ignore all the above and decide whether you want a kid or a holiday more. Thats what it comes down to in the end.

Redouble

we have 2 adults, 3 kids, 2 cats, a mortgage, very cheap rent on this house, car on finance and money to spare on £32k - DH only working

We are not particularly frugal either (CC bill is our ruddy car breaking and it not being covered under warranty :mad: able to pay off about £500 a month depending on how good we are in the month!)

S
xx

ETA - we had our 3rd child because we wanted a 3rd child, I think it is incredibly rude to ask the OP why they would want a 3rd ('two is enough'), it is their reproductive system and their life!

Spendless

becominganobsessivesaver wrote: »

At £40k they should still be paying 20% tax (depending on company car). Also child benefit changes don't impact until the salary is over £50k.

This isn't correct. Scroll down my link to see where 40% tax kicks in

http://www.hmrc.gov.uk/incometax/basics.htm

Also though there was a partial U-turn over Child Benefit announced this year, about what happens next year. It only stops if 1 parent is earning £50k+ but the amount you receive decreases from a lower level which I think is still set at when you become a HR tax payer. Also a company car counts as benefits in kind and will be added to the income of the OP's husband for the purpose of child benefit. This is what used to happen with child tax credits. We had to report an £11k income on top of my husband's salary for tax credit purposes (he has company car, private fuel and Bupa). These benefits alsoaffect the tax code, my husbands exceeds his personal allowance so he has a negative K code.

neneromanova

I don't get Child or working tax credits now anyway, only Child Benefit. The Car tax is something to look into though. Hadn't thought of that. Thank you.

And that table on your link Spendless, I think you have to add on your tax free amount that you can get, as I read that you get taxed 40% when you reach £42 from next year.

becominganobsessivesaver

Spendless wrote: »

This isn't correct. Scroll down my link to see where 40% tax kicks in

http://www.hmrc.gov.uk/incometax/basics.htm

Also though there was a partial U-turn over Child Benefit announced this year, about what happens next year. It only stops if 1 parent is earning £50k+ but the amount you receive decreases from a lower level which I think is still set at when you become a HR tax payer. Also ar company car counts as benefits in kind and will be added to the income of the OP's husband for the purpose of child benefit. This is what used to happen with child tax credits. We had to report an £11k income on top of my husband's salary for tax credit purposes (he has company car, private fuel and Bupa). These benefits alsoaffect the tax code, my husbands exceeds his personal allowance so he has a negative K code.

Sorry but you're not quite right with child benefit either, the tapering starts at £50k, and over £60k is where it stops. I earn around the HR threshold so is something I've been keeping an eye on.

Lotus-eater

Do you know, a very good friends Dad once said to me "if you wait till you can afford kids, you will never have them" and it's so true.
And it's true for the 2nd or 3rd as well.

I don't mean lets let everyone else pay for them type of thing, when he was talking about, there was virtually no help from the state.

But if you want a child, you will support them, the OP can support a 3rd child if she wants. Holidays and treats are not what the child remembers, they remember the home life.

neneromanova

becominganobsessivesaver wrote: »

Sorry but you're not quite right with child benefit either, the tapering starts at £50k, and over £60k is where it stops. I earn around the HR threshold so is something I've been keeping an eye on.

Just read on the BBC website, that from next year, 2013, if you earn the 40% bracket you lose child benefits, if both partners earn less than 40% you keep it (potential earnings of up to £80k!!) Stupid if you ask me.