Once every few months, a bill – a surprise vet visit or a problem with the car – will arise to momentarily destabilise our finances and my husband will declare that he needs to get a promotion. He needs to earn more money.
He has been at the same level in his job for a while now and could use a new challenge – but, the problem is that financially, the extra money made from climbing the ladder almost wouldn’t even be worth it.
As a civil servant, my husband makes £50,000 a year, but because he also has additional income from inherited houses, if he were to take a pay rise then his income would tip over the 100k mark and into the higher tax bracket. Which I realise sounds like a total non-problem to have, but it is for us, for various reasons.
For one, the income made from the houses is partially incorrect – we have to pay the mortgage payments from the rental income. So even though we receive a 20 per cent tax credit on mortgage payments, it means we are pushed into a higher tax bracket calculated on income that isn’t really income.
Then, there’s the extra stress that would come with a promotion and as a commuter with two small children, my husband already spends a few days a week without seeing them. Which is neither a unique nor uncommon situation to have, but what’s important for him when considering a higher position is whether it would take more time away from them, or make his time with them less enjoyable – by way of stress or a newfound need to be on-call.
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The temptation of a promotion is always there for my husband and it’s hard to ignore it. It seems strange sometimes that he doesn’t just attempt to get one, given that he’s been at the same level in his career for 10 years now. But, every time we come back to the idea, the positives never really seem to outweigh the negatives.
Right now he earns £50,000 with his job and £30,000-£40,000 with his rental houses and pays about £19,000 in taxes. If he were to get a promotion, his income from work would increase to about £68,000, meaning that he’d likely go over the £100,000 tax band and end up paying about £30,000 in taxes. It just doesn’t seem worth the additional stresses and strains for the majority of the pay increase to go straight to taxes.
It’s not as though he’s hiding from a promotion or swatting them away, but he’s never willingly putting himself forward, which, in the civil service, is a necessary step to progress up the chain. Promotion is not something that’s granted out of nowhere there, but more something that you apply for and so, when you’re is hiding from one, it’s pretty easy to just never submit the paperwork.
In lieu of a promotion, it often seems easier for me to try and step up and fill in the financial gaps. But, with two small children this previously wasn’t an option. Now, however, with both in nursery for at least part of the week, I am able to take on more work with my newly available time. Between 2021 and 2024 I did not earn anything as I was looking after our kids. Now, I work three days a week making £25,000, of which I pay £2,500 in tax – meaning that by working part-time, I bring in £15,500 more (after tax) than my husband would if he were to get promoted.
It’s not as though we couldn’t use more money – the majority of income from housing stays in an account to cover incidentals or repair works needed for the house, and doesn’t enter our pool of disposable income. And so, in many ways, it makes a lot more sense for me to just focus on building my career and bring in additional income at a lower tax band.
I’m sure that one day my husband will eventually go for a promotion, and it will be less due to a financial reason and more out of the innate desire to progress or push himself. Once the children are in school and become less reliant on us, there will be more space in my husband’s life to welcome added responsibility, and a point will come when it seems silly to avoid progressing for tax reasons.
Ultimately, we’re in a very fortunate position, and inherited money has helped us to buy our house outright, with monthly income covering our general expenses. While we live within our means and are relatively frugal, our situation does enable us to be more relaxed in our approach to money and to be able to live without a sense of pressure, or financial urgency.
But, it does still feel as though my husband is in a strange purgatory – waiting to assess the right moment to take on more responsibility without much of a financial incentive. Until then, I guess he’ll just continue to not submit the forms and avoid doing anything too stellar that makes someone else send it in on his behalf.
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