About The Salary Calculator
April 2010 rates applied
It’s that time of year again – The Salary Calculator has been updated with the latest tax information which takes effect from 6th April 2010.
As reported at the end of last year, for most people there’s actually no difference between the 2009 figures and the 2010 ones. Personal allowances are staying the same (whereas they usually go up), as are National Insurance payment thresholds.
However, there are some changes for those earning over £100,000 – personal allowances are reduced by £1 for every £2 your salary goes over £100,000, and there is a new 50% tax rate for taxable income over £150,000. So while most of the population will find their payslips unchanged come April, the highest earners will find themselves significantly worse off.
To see how you’re affected, try out The Salary Calculator with your salary. The details of the figures used by The Salary Calculator are available on the About page.
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None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.
Debt consolidation loans
I’m sure you will have seen adverts on TV and online for debt consolidation loans, which are meant to make it easier for you to handle debt. But could such a loan help you? Is it worthwhile? Fortunately The Salary Calculator can help you find out.
If you have multiple debts, like credit card balances, overdrafts, car loans or store cards, it can be difficult to keep track of them all and to make sure you make the right payment each month. Some of these debts may have high interest rates which mean it will take you even longer to pay them all off. A debt consolidation loan is designed to put all of those debts into one overall debt, with one interest rate, and one monthly payment. If the interest rate is low enough, your total monthly payment can be lower than it was when you were paying separately. How low does that interest rate have to be? The Debt Consolidation Calculator can help you work that out.
Enter the details of your outstanding debts, like the amount you owe and the interest rate you’re paying on each debt. Then choose how quickly you’d like to pay them all off, and click “Go!”. The calculator will work out what your total monthly payment would be if you were to pay them all off individually – and also the overall interest rate you’re paying. This means that if you can get a debt consolidation loan at a lower interest rate, it would save you money each month (please note this does not include any charges the loan company may apply).
There are other things to consider, so before finding and using a debt consolidation loan, talk to an expert advisor.
Time to make some changes
2010 beckons and the start of a new year is for many people the time to sort out their career or their finances. The Salary Calculator is here to help you if you want to make some changes to your financial situation.
It might be time to look for a new job – the Christmas break gives one time to consider career plans, and you might think that in January you’ll start looking for new employment, or talk to your employer about a promotion. Use The Salary Calculator when comparing salaries so you know how much extra it would make to you each month if you got that pay rise.
If you need some extra money each month, to save up for a holiday or a new car say, then use the Required Salary Calculator to work out what salary you need to look for to get that extra take-home. There’s hope that early in 2010 we’ll hear that the UK has finally left recession and things will start to pick up – including the job market.
If you’re not interested in a new job, you can consider sorting out your finances. Use the Mortgage Repayment Calculator to get an idea of the effects of remortgaging in 2010, or the Debt Consolidation Calculator to see what you could save by taking control of all of your loans. Why not try to get debt free in 2010?
Here’s to a great new year for everyone, I hope that The Salary Calculator will help you with your money in 2010!
Pre-budget report
Earlier this week the Chancellor of the Exchequer gave his pre-budget report, which gives us a preview of what he will announce in next year’s budget. For personal income, there were a couple of things to note. Firstly, the personal allowance (the amount that everyone can earn without paying income tax) is not increasing as it normally does in April 2010, and nor are the thresholds for National Insurance contributions. The Chancellor says that this is because the Retail Price Index (RPI) shows that deflation over the past 12 months means that in real terms we will be better off than a year ago even without the usual increase.
As already announced, there will be a new higher tax rate of 50% for income over £150,000, and personal allowances will be reduced gradually to zero for those earning over £100,000 (by £1 for every £2 earned over this limit).
The Salary Calculator will be updated with these details early in 2010, but as you can see, only those earning over £100,000 will find their take-home pay changing in April 2010. Everyone else will have the same personal allowances and the same tax and NI rates, so take-home will remain as before.
However, there was also news in this pre-budget report that there are plans to increase National Insurance contributions by 0.5% from April 2011, but also to raise the NI threshold so that those on lower salaries are not negatively affected. The details are not yet clear (and of course, there is an election between now and then so it may not come to pass) but whatever the changes for 2011 turn out to be, The Salary Calculator will be updated at that time.
Personal allowance correction for over 65s
In response to a comment from a visitor to The Salary Calculator site, I have updated the calculation of personal allowances for the over-65s. As you can see on this page on the HMRC website, personal allowances (the amount you can earn before paying any income tax) increase when you are over 65. The Salary Calculator has always reflected this, but there is also a note on the HMRC explaining that if you are over 65 and earn over the “Income Limit”, your personal allowance is decreased gradually, until it reaches the under-65 value.
The Salary Calculator has been updated to reflect this additional complexity. To quote the HMRC article:
If your income is over the income limit, we reduce the age-related allowance by half of the amount – £1 for every £2 – you have over that limit, until the basic rate allowance is reached. You’ll always get the basic allowance, whatever the level of your income.
So if, for example, you’re 66 and have an income of £23,400 – £500 over the limit – we would reduce your age-related Personal Allowance by £250 to £9,240.
These values reflect the April 2009 personal allowance values – needless to say, The Salary Calculator will be updated with the April 2010 values early in next year.
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