University Lecturers' Strike

[Serial_Apologist]

It would be a whole lot less opaque if it were called a graduate tax and was operated directly by government. As it is, it's a loan operated by The Student Loans Company and the thing which strikes fear into all those who have/will have a debt in the region of £60,000 is that there is nothing to stop the rules being changed. The interest rate has already been raised to above what was promised; and what is to stop them reducing the salary level at which it must be re-payed?

As it is a debt, it will become increasingly difficult for young graduates to be considered for a mortgage.

I've gone off topic slightly, but current students (unlike those of us who inhabited Hallowed Portals in civilised times) do see university education as more of a market place, and they do expect to get their money's worth. Can we blame them?

[teamsaint]

Young graduates face marginal deduction rates, ( call it what you want, but including tax, NI, and graduate loan) of around 40 %, before any further deduction for pension contribution. Potentially, and actually, close to 50%, on what can be quite modest salaries.

No wonder lots of them blow whatever money they have left over on travel now, rather than the very far off "dream" of saddling themselves with a mortgage of hundreds of thousands of pounds to buy a small flat.

And, to get back on topic, those pensions will likely be "defined contributions" rather than the rather better provision that todays pensioners enjoy.

Basically, our young workforce ( who often need two degress to get modestly paid work)have been saddled with debt ( or extra tax liability, call it what you want) and have been been handed a far worse deal than older workers and pensioners.

Pretty shoddy all round , to say the least.


edit......while those from earlier generations take £400/700 a month rent off them for a rubbish room in a shared house.

[french frank]

It would be a whole lot less opaque if it were called a graduate tax and was operated directly by government. As it is, it's a loan operated by The Student Loans Company and the thing which strikes fear into all those who have/will have a debt in the region of £60,000 is that there is nothing to stop the rules being changed. The interest rate has already been raised to above what was promised; and what is to stop them reducing the salary level at which it must be re-payed?

It would be less opaque. I don't know why the government opted to set up a 'Student Loans Company' in the first place: it's only a government owned agency, set up as a limited company,. But I think it's far more likely that the whole system will be scrapped. I'd be more worried about that decimating the universities than going in the opposite direction and hitting the students harder. No government could get away with that.

As it is a debt, it will become increasingly difficult for young graduates to be considered for a mortgage.

Only marginally. It doesn't make it more difficult to get a mortgage but it will affect how much the mortgage lender thinks you can afford to borrow. But, paradoxically, the less you earn, the less it will affect that amount. The cost of the mortgage itself would be a far bigger problem. But, please, forget the line about 'massive debts'.

[french frank]

Young graduates face marginal deduction rates, ( call it what you want, but including tax, NI, and graduate loan) of around 40 %, before any further deduction for pension contribution. Potentially, and actually, close to 50%, on what can be quite modest salaries.

Your maths is probably better than mine, but by my reckoning you would be earning £45,000pa and not paying 40%, NIC included. Which, of course, may be a modest salary now

[teamsaint]

Your maths is probably better than mine, but by my reckoning you would be earning £45,000pa and not paying 40%, NIC included. Which, of course, may be a modest salary now

If you earn £25k, you pay marginal rates of 20% income tax, 10% NI, 10% loan deduction, plus whatever pension deduction. Teachers for example pay 10% pension contribution ( less tax relief so approx 8%).
So very close to 50% deductions on every extra pound you earn.

[french frank]

If you earn £25k, you pay marginal rates of 20% income tax, 10% NI, 10% loan deduction, plus whatever pension deduction. Teachers for example pay 10% pension contribution ( less tax relief so approx 8%).
So very close to 50% deductions on every extra pound you earn.

Yes, when you get to a certain level of earnings, the various rates kick in, though the graduate deduction is hardly a make or break sum. And as you say, at the critical point it's on every extra pound that various rates apply: I suppose for low earners there won't be many extra pounds.

[teamsaint]

Yes, when you get to a certain level of earnings, the various rates kick in, though the graduate deduction is hardly a make or break sum. And as you say, at the critical point it's on every extra pound that various rates apply: I suppose for low earners there won't be many extra pounds.

Depends what you call low earners.
Either way, they can't do much about it other than get on with earning and shelling out the tax pounds.

[Bryn]

Depends what you call low earners.
Either way, they can't do much about it other than get on with earning and shelling out the tax pounds.

I suggest you take a look at the most recent available figures for average income in the UK (both the overall and full time only levels are instructive). Initial income levels for new graduates are very much open to question. For 2016, one survey suggests a median starting salary of £30,000 while another finds £19,000 to £22,000.

[teamsaint]

I suggest you take a look at the most recent available figures for average income in the UK (both the overall and full time only levels are instructive). Initial income levels for new graduates are very much open to question. For 2016, one survey suggests a median starting salary of £30,000 while another finds £19,000 to £22,000.

why do you think i need to look at these figures?

Salary levels in public sector occupations at graduate level are well known, and in the private sector they tend to be lower for comparable work.

[Bryn]

why do you think i need to look at these figures?

Salary levels in public sector occupations at graduate level are well known, and in the private sector they tend to be lower for comparable work.

I was responding to the first sentence, your "Depends what you call low earners".

[teamsaint]

I was responding to the first sentence, your "Depends what you call low earners".

Ah. I see.

I think that was FFs term, not mine. Whatever, 40/50% deductions at incomes of , say , £25 k a year are scandalous, when the highest rate of income tax is 45%.

[Dave2002]

If you earn £25k, you pay marginal rates of 20% income tax, 10% NI, 10% loan deduction, plus whatever pension deduction. Teachers for example pay 10% pension contribution ( less tax relief so approx 8%).
So very close to 50% deductions on every extra pound you earn.

Actually do the calculation 0.8*0.9*0.9*0.9 (the last assuming a 10% pension contribution) which should come to 0.583,
so actually only slightly more than 40% (41.7%) deductions on extra pounds over the appropriate threshold. Not quite as bad as you are suggesting. I think the marginal rate is slightly worse in Scotland at the level indicated - http://www.bbc.co.uk/news/uk-scotland-42356953 - with Scotland having rates of 21% but now also 19% for lower levels of income. Against that Scottish students don't have to pay if they study in Scotland I think - https://www.saas.gov.uk/full_time/ug..._available.htm but students from other parts of the UK will have to pay if they study in Scotland. Scottish students studying in other UK countries can get loans, so similar to the rest of the UK.

[Dave2002]

Ah. I see.

I think that was FFs term, not mine. Whatever, 40/50% deductions at incomes of , say , £25 k a year are scandalous, when the highest rate of income tax is 45%.

Maybe, but it is only a marginal deduction, on the excess over a threshold - which may indeed be set "cruelly" low.

[ardcarp]

But, please, forget the line about 'massive debts'.

I'd like to bust the myth-busting items on your link in post #33. As tip 21 says, Warning. Retrospective changes may be made. (I would add, especially if Philip Green becomes Chair of the SLC.) And I can't quite understand the sentence 'Grants have been replaced by loans'. Is that a myth or a statement of fact? If it's supposed to be a myth, it isn't.

I would add that one of my daughters who is on the bottom rung of FE college lecturers' pay finds the salary deductions for her student loan oppressive. And she was at university when fees were still 'free', her loan being for accommodation and living costs, grants having been phased out. It seems terribly unfair that her older siblings had a completely free university education in the good old days of grants. And it's at least 3X worse for next generation.

What sort of country do we live in?

[teamsaint]

Maybe, but it is only a marginal deduction, on the excess over a threshold - which may indeed be set "cruelly" low.

I'll have to have a chat with the younger employees at our office and see what they think about their deductions, rents,

Since we are talking about marginal rates ,the rich moan like hell about their marginal rates. It really isn't a question of " only ".
I really don't see why young modestly remunerated workers should pay such punitive rates.

But nobody up the food chain gives a **** as long as they keep working.
And paying their tax.