| Comment | >You can avoid the child benefit trap by increasing pension contributions etc.
The pension contributions are always used as a way of avoiding tax, but it is still taxed at the other side and you've no idea if you'll even live to enjoy the full benefit. It's a terrible way of incentivising people (as proven by the fact public sector workers ignore their premium pensions when comparing benefits with the private sector).
And the bigger issue is the high tax from £100k and more. It is completely detrimental to encouraging people to take high paying roles. If you are earning more than £100k, at least in the private sector, you are taking a position where there is a strong possibility you will lose your job due to poor performance. Salaries above that level are for people operating business units, not those just doing a 9-5. If the level of tax reduces take home pay greatly, it completely puts out the risk / reward for an employee.
Why would I say, double my hours and take on the constant risk of being laid off, in return for less than 50% of the salary I will actually generate in the role? It just doesn't make sense. |
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