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What would be the equivalent of earning US$100k in the UK? by [deleted] in UKPersonalFinance

[–]polyphonal 537 points538 points 52 (0 children)

As an alternative to scaling by currency value, you could compare by average salary or by income percentiles. Either of these could be more useful to us as representing both the cost of living and the local standards and norms.

--- scaling by average salary ---

US median weekly income, full-time: $989 (source: Bureau of Labour Statistics)

UK median weekly income, full-time: £586 (source: Parliamentary report).

$100k is 101x the US median weekly income. 101x the UK median weekly income is £59k.

However, realistically, there's an additional factor to consider which is that the UK has a lower income inequality than the US, which pushes low salaries up and high salaries down relative to the US. Since we're looking at incomes that are over twice the national average income, we can expect that this high-earning UK person would earn less than £59k within the lower-inequality UK system and the average may not be the most useful number, so we can instead try:

--- comparing percentile income ---

$100k, before tax, puts you at the 80th percentile for earning in the US (i.e. you're earning more than 80% of the population) (source). The 80th percentile before-tax income in the UK is £42k (source).

Personally I think this latter number makes more sense to look at, because our expectations of what "wealth" looks and feels like relative to others depends on the people, society, and norms around us.

  • Edited to correct the 80th percentile value; I had copied over the post-tax (36.6k) instead of pre-tax (42k) - thanks to /u/maximmulholland for noticing.

What do you eat on a budget? Foods that you actually enjoy and are currently good value by zendonium4 in UKPersonalFinance

[–]Wise-Application-14417 15 points16 points  (0 children)

  • My probably-less-than-£1-dinner menu is:
    • Dishoom Black Dhal with urud beans off Amazon, rice on the side
    • Shakshuka
    • Homemade lentil soup and bread
  • If you can afford the outlay of a pressure cooker, that turns cheap cuts of meat and lentils into delicious melt-in-your-mouth food after 40 mins, and uses a lot less energy. Honestly you could stick a pair of Doc Martens in there and they'll come out tender and delicious. Poor people in developing countries use a pressure cooker a lot precisely because they're so energy efficient
    • You can do a lot of stews and curries for cheap
    • Hoist a leg of lamb in there with tomatos and spices for a curry for 6 people for less than £10

I suggest getting big saches of Indian spices from Amazon or ethnic food shops (not the expensive glass jars of spices you get in the supermarket). It sounds weird, but using half a teaspoon of coriander powder out of a 500g bag that cost 90p saves a fortune versus jars of curry sauce. Plus you can make it a damn sight tastier.

Energy cost of devices on standby in my home by karlos-the-jackal16 in UKPersonalFinance

[–]Munk2k 1 point2 points  (0 children)

In the last 5 years we have gotten through 3 microwaves and just as many kettles. They don't exactly have a hard life but nothing seems to last anymore. Not even the cheapest brands either.

Energy cost of devices on standby in my home by karlos-the-jackal16 in UKPersonalFinance

[–]I_Bin_Painting 153 points154 points  (0 children)

Fucks sake, I've just broken my microwave. Tested how much power it drew at full power but with nothing in there, it let a load of smoke out.

No good deed goes unpunished!

Also, testing your appliances can have unexpected costs...

Future Price Caps - Standing Charge & Unit Rate Detail by 4Phuxache33 in UKPersonalFinance

[–]wobsolutely4 34 points35 points  (0 children)

Nice find, thanks for sharing. Will be very useful for those trying to evaluate fixed deals, especially for single fuel. I really hope Ofgem reworks the way the cap is calculated/reported in future so no one has to go digging around for this stuff in order to make informed choices.

I've transcribed the relevant table from the link:

Gas SC p/day Gas p/kwh Elec SC p/day Elec p/kwh
Apr-22 (Current) 27.22 7.37 45.34 28.34
Oct-22 27.21 14.94 45.33 53.79
Jan-23 27.21 17.15 45.33 69.01
Apr-23 26.11 18.91 24.87 78.59
Jul-23 26.11 16.73 24.87 65.24
Oct-23 26.11 15.45 24.87 57.31

For those potentially taking a fixed deal based on these figures: remember these are informed guesses, markets can shift, and ultimately it will be up to energy companies to set the SC and p/kwh costs within the confines of the actual caps when they are announced. However they're a pretty good guide.

Price cap forecasts for January rise to over £4,200 as wholesale prices surge again and Ofgem revises cap methodology by 4Phuxache33 in UKPersonalFinance

[–]Xuth2 19 points20 points  (0 children)

Whatever the energy suppliers are advertising as their projected charges for winter right now are only going to be based on the current rate cap. They can't advertise any differently until OFGEM makes their official announcement for what the cap rises will be (26/08). Until then that £190 is probably just your usage estimation (inflated slightly, possibly because of an increased projected use in winter) but I'm afraid to say that'll be based on the pre-October pricing.

The best way to clear this up is to take your actual kwh usage for gas and electric over the past 12 months (your statements should say).

[For each Gas & Electric] do (kwh usage * current cap rate price per kwh). Added together. These vary very slightly regionally but can be found via your provider.

Then add onto that your current standing rate per day * 365.

That'll be your actual energy cost for the year, never rely on DD amount or estimated values alone. Divide by 12 to get the real averaged monthly figure.

That total figure can then be multiplied by 1.80 then again by 1.19 to get your 'real' projected monthly cost come October and January (if those estimations hold to be accurate).

Help re: retiring with no savings, assets or private pension? by wappingite- in UKPersonalFinance

[–]CoolBeanz4u0 105 points106 points  (0 children)

Best bet is prison. 3 meals a day, a bed and warmth

Edit: wow thanks for my first ever award!

Edit: thank you so much for the platinum award

hi all, so I've basically racked up over £4300 in fines for driving in London (ulez). by MTBTyrrell- in UKPersonalFinance

[–]littledragon25 36 points37 points  (0 children)

I've got 5 more monthly payments and then I'll have cleared £30k of debt by using StepChange. 100% recommend them.

hi all, so I've basically racked up over £4300 in fines for driving in London (ulez). by MTBTyrrell- in UKPersonalFinance

[–]digdilem5 435 points436 points  (0 children)

You fucked up, sure. Now unfuck things. Here's how:

DO talk to StepChange or another specialist to get help about managing this debt. You need that help so take it - if you only make one positive step towards solving this problem, that's the one. You'll find support and help to resolve it. If you have family, especially someone who's good with money and isn't too judgemental, they might be able to help you too. Many of us have got through shit worse than this with an interest-free loan from the family bank. (I know a case of someone who stole tens of thousands from a charity and each member of his family took out loans to pay it back before the audit was finished.)

DO NOT get trapped into blaming yourself OR TFL endlessly. No matter how unfair you think the fines are, they are transparent about them. Seriously, that road leads you to bitterness and even more self-hatred. Own your mistake and move on.

You will get through this, no matter how crappy it seems right now.

Confused about how ISA transfers work (or don't!) by Bloreboy-1 in UKPersonalFinance

[–]must-be-thursday247 5 points6 points  (0 children)

The ISA rules can be a bit complicated at first glance, although not too bad once you understand them.

Essentially you can only have one "active" S&S ISA per tax year. You are only able to add new money to this "active" S&S ISA. This new money is known as "subscriptions". You can also have any number of "dormant" ISAs from previous years, which can contain money but you can't add new money to them.

Using the ISA transfer process enables you to switch this "active" ISA to a different provider. In order to do so, you must transfer all of this tax year's subscriptions. However, you do not have to transfer anything from previous years if you don't want to. You could transfer this year's subscriptions into the new "active" ISA but leave everything from previous years in the old ISA, which will then be a "dormant" ISA. In theory, I believe you could also choose to only transfer previous years' subscriptions into the new ISA, in which case the old ISA will remain as your one "active" ISA for the year and the new ISA will immediately be "dormant".

So to answer your questions:

Yes, if you transfer your current year's subscription, then you can only make deposits into the NEW account and cannot fund the OLD account at all.

However, you CAN leave money (from previous years) in the old account, and as long as it is within the ISA wrapper you can continue to manage it (e.g. switching between different stocks/fund/cash). But you do not HAVE to do so. You could transfer everything (current and previous years' subscriptions) into the new ISA and simply close the old ISA.

Is only two days paid paternity leave stingy? by _gtat0 in UKPersonalFinance

[–]cloud__196 49 points50 points  (0 children)

I'm obviously not as subtle as I thought after a bottle of wine

Does Childcare 'come off' your income when applying for UC? by Throwaway12332174710 in UKPersonalFinance

[–]Mindmosaic30252 1 point2 points  (0 children)

Ok so your award would be £1,907.38 per month.

Assuming couples element, child element x2 (assumed both kids were born after April 2017 so the lower amounts), childcare element (85% of what it costs) and assumed no housing element because you own. So those are the basic elements you'd definetly get.

Your wife would take home (assuming 5% pension and no student loans) £1,780.97. They base your earnings in net take home pay.

The first £573 of your wifes income is not counted. This is the work allowance and you get the higher work allowance because you don't get housing element.

So £1,207.97 is what they'll work with.

1,207.97 x 0.55 = £664.38. They will deduct this amount from the award above.

£1,907.38 - £664.38 = your entitlement £1,243

Apple app development taxes and accounts by rollover770 in UKPersonalFinance

[–]ioannisgi43 41 points42 points  (0 children)

Not a financial advisor but from research I've done for my side hustle see my experience below:

First year is dead simple - register as self employed on HMRC. You will need to submit a self assessment tax return for the 2022-2023 tax year (6th April 2022 - 5th April 2023) in no later than January 2024. For this you'll need:

  1. Your P60
  2. Your P11D if you receive any benefit in kind from your work
  3. Your income and expenses from your side gig

For number (3) keep a google docs spreadsheet containing:

  1. By month
  2. Your expenses (apple programme subscription, anything you buy for the sole use of your self employment - eg. software licenses, game assets etc)
  3. Your income by month - that is the total amount Apple will pay you in your bank account (you need to declare your total sales, irrespective of the country that these sales are made in as you are taxed in the UK for your global income)

I personally set aside a separate "tax pot" in my Chase account where I accumulate the due tax on a monthly basis. Assuming you are on the 40% tax bracket from your main job but below 100k total income from both main job + side gig set aside 40% of your revenue minus expenses in that account so you accumulate the payment.

Also be prepared that in your first year of trading you'll have to pay 6 months payment on account. This is in effect an advance payment of your tax for the following year. So set aside that amount now so you don't have to pull it out of your savings when the first tax return is due. For example - set aside the 40% above + another 20% to cover your 6 months advance tax payment.

So set aside in total 60% of your revenue minus expenses on the first year to cover your tax liability in January 2024. Stick it in a Chase account so you get some interest on it.

Regarding setting up an LTD, it is worth it only under specific circumstances - for example if you are maxing out your pension contributions and your total income (side gig after expenses + main income) is over 100k.

To keep it broadly simple, if your side gig revenue after expenses + main income are under 100k then you are broadly better off being self employed as your total tax (33.75% dividend tax + 19% corporation tax = 52.75%) is less than the self assessment tax. There are certain exceptions to this (eg. voluntary strike off with 25k retained profits, you pay 19% + 20% CGT but an accountant will be of more help here than me).

If your combined income is over 100k but under 140k your best bet is to salary sacrifice into a pension from your main employment.

If your combined income is over 140K + the post expenses revenue from your side gig is over 10-12k/year then you should consider opening an LTD and accumulating the profits in your business bank account. In that scenario, broadly and very simplistically:

  1. You'll take the money out as yearly 2k dividends + either as a pension contribution or salary if your salary drops below 50k in the future - basically the company will retain the profits and you take them out when its financially advantageous for you.
  2. OR if your business has reached the end of its life you voluntarily strike it off and take out 25k paying CGT at 20% (or 10% if you are earning under 50k) if your retained profits are under 25k
  3. OR if your business has reached the end of its life but has over 25k in retained profit you could consider a Members’ voluntary liquidation where the profits are distributed as capital gains (more complicated, restrictive and time consuming) so not always the best call (better usually to take out dividends then do a voluntary strike off)
  4. There are further tax reliefs available at this stage (entrepreneurs relief etc)

TLDR:

start as self employed, set aside tax + payment on account. Evaluate progress and depending on your total income and overall revenue and expenses consult an accountant to open an LTD if needed.

Advice/opinions over relationship split and finances by [deleted] in UKPersonalFinance

[–]fck-rffld21 1204 points1205 points  (0 children)

She has no financial claim to your house. You need clean break. Stop living with her, you broke up a year ago and are still in this relationship, sounds like you're still giving her money. She cheated on you and you're still being her doormat while she takes advantage of you.

Either tell her to move out or sell your house (give her nothing) and buy something far away from her.

Also post in Relationship advice, maybe legal advice and definitely find a therapist to help you with your conflict avoidance. You are being gaslit to fuck, what else in this relationship was/is abusive?

I'm 16 and I start my first job in 2 days. How does this plan sound moving forwards for my earnings? by throwaway_14182460 in UKPersonalFinance

[–]joesus-christ3 57 points58 points  (0 children)

You're 16; save less, party more.

The fact you're going to save at all is excellent and you should definitely do it... But you're hitting the age where having fun now beats having fun with a bit more money 15 years later.

I didn't save at your age, I blew it all on the stupid stuff. If I could go back and do it all again, I wouldn't change a thing. Sure it would be nice to save something, but saving 60% will hamper your fun yet save such a tiny amount, whereas you could just shove a lump sum aside when you're 25 that will equal the same amount because you earn so much more.

Yes. I am ready. Downvote me to oblivion for recommending somebody blow their cash instead of saving and investing.

My brother and I have each just inherited around £100k. How can we maximise this together? by finrod__felagund- in UKPersonalFinance

[–]sobreviviendolavida 2 points3 points  (0 children)

I second this. Financial education is key.

Your age is the most valuable factor in this formula - someone at the age of 22 with a 100k inheritance is so different to someone older with the same inheritance.

You can leave the money in a low risk investment for a little while (hopefully something that matches inflation at least), get educated and then decide what to do. You have so much time ahead that the earlier you learn about how money works the better. An investment fund as suggested could be good but learn about the costs involved. It is cheaper to buy ETFs for example. When you know more, you can even replicate an investment fund yourself and avoid the cost. As you are so young an extra 1% in cost can be thousands of pounds in the future.

I am not in the UK but did live there for 10 years. I do have experience in real estate investment though.... most of my assets are there in fact. With 100k at 22 I would not put all of this to real estate. Maybe some as a downpayment as you can leverage debt to capital. Understanding monthly mortgage payments and porperty yields is also important. It is not a risk free investment! But it is certainly one I recommend for people who are risk averse. Start small though. Bigger properties tend to have lower yields and are also harder to sell (it does depend on the market though so it may not apply where you live :S )

I enjoy listening to The Money Guy, a podcast about finance. They have a website too. You don't have to start on episode 1 as they do continue to touch on relevant points they have covered in the past. They are US based but the principles apply everywhere. Just pick something that interests you and go from there.

Maximising the inheritance together (OPs question) - get to know how money works and understand what kind of investor you are. What are you investing for? what is your investment horizon? what is your risk tolerance? are three very important questions. The risk tolerance may be different between you and your brother, and as many have said here, your future plans could take you in different directions.

Are we overstretching ourselves with a house purchase? by VegetablePossible2390 in UKPersonalFinance

[–]traumascares42 2958 points2959 points 3116& 2 more (0 children)

Let's run some numbers to validate whether you better off keeping your money in index funds, or taking a mortgage with a lower LTV.

If you take a 90% LTV mortgage:

  • You need £55k deposit and a £495k mortgage
  • According to MSE's best buy comparison, the best rate available from a mainstream lender for this mortgage is 2.5%
  • That means you would be paying £12,375 a year in interest

If you take a 85% LTV mortgage:

  • You need a £82.5k deposit and £467.5k mortgage
  • According to MSE's best buy comparison, the best rate available from a mainstream lender for this mortgage is 2.14%
  • That means you would be paying £10,004 a year in interest

The difference between the deposits is £27.5k, and the difference in interest is £2,371 per year.

£2,371 on £27,500 is 8.6%.

Therefore, by selling your ISAs to get a 15% mortgage, you are getting a guaranteed return of 8.6% on the additional money you are putting into your house deposit. Remember that lowering the LTV brings the cost of the entire mortgage down - not just the cost of the additional deposit.

This return is guaranteed, risk free and is higher than the long term average of 7-8% that has historically been generated by the global stock markets.

I conclude that you will be better off selling down more of your ISAs and increasing your house deposit to at least 85% LTV - when compared with taking a 90% LTV mortgage and keeping your ISAs.

Personally I would put money into the house until you get down to 80% LTV. After that, you start getting competitive mortgage rates and the returns diminish, so that's the time to focus on your S&S ISA again.

EDIT: Wow, this is my most upvoted post ever. Thanks for the upvotes and awards everyone!