(Original post by Clip)
This thread demonstrates how little most students know, and makes it clear why many are so caught up with childish politics.
£40k sounds like a lot when you are comparing it to the kind of job that young people generally do - usually minimum wage - anything up to £5ph for 18 year olds.
These NMW and part-time jobs actually pay proportionately vastly more than you could expect.
Let's say you are on a year out, and you find a full time job in a shop at £5 ph. That equates to about £10,500pa, holidays and student loans notwithstanding.
Crucially, tax and NI won't kick in until the 7000s, so on your NMW job, you actually take home £786 every month, or £9400 pa.
If you double that wage to £20,000 - your take home pay doesn't double. Far from it. On £20,000, you actually only take home £1330 per month, or £16,000 per year.
Double that again (to this magic £40k), and you are netting under £2500 per month, or £30k per year.
After that, it's 40% tax band. For every £1 you are paid, you see less than 50p of it.
£40,000 for someone by themselves, with no commitments other than a student loan sounds like a huge amount. For a person with a small family and rent to pay - it's not very much at all. In London (where the bulk of these £40k jobs will be) you'd be hard pressed to find accomodation suitable for a couple (nevermind a small family) for under £950 per month, and that doesn't take into account council tax or utilities (maybe £300 per month). A small family would spend in the region of £50-60 per week on groceries (if they are good at budgeting). Allowing for a single car (assuming it comes free) at £4000 per year for petrol, tax, insurance (at the generous rate of £500) and some servicing.
That makes a total of £22k, which has to come out of disposable income. That's almost exactly the income that someone on a gross wage of £30k earns.
So - to earn a "subsistence" living for a couple/small family - you need to be earning a £30k salary assuming you have no student loans, and you never leave the house or buy anything other than groceries (ie no clothes or entertainment). There's no concept of family holiday in here.
Say what you like, but a family with a single income of £40k will struggle. Don't forget that tax credits would have stopped a while back.
That's the reality of the situation.