£126,000 a Year, Nothing Left at Month's End: Readers on the Budget

By Daniel Okafor

A business owner earning £126,000 last year says he has virtually nothing left in his bank account at the end of each month. Graham Robinson, 45, runs KeySim from Timperley, Greater Manchester. He wanted "real help with the cost of employing people" from the budget. "Instead, the employment allowance stays at £10,500, while employers pick up the rising wage bill," he said.

He spelled out the arithmetic. His £126,000 gross works out at roughly £6,500 a month after tax. His mortgage payments have risen from about £900 to £1,300 a month. Council tax, food and energy have all climbed too. "I don't have expensive cars, I don't go on extravagant holidays," he said. "But at the end of the month it's all gone."

The 60% effective tax trap on earnings between £100,000 and £125,140 — caused by the gradual withdrawal of the personal allowance — is his main frustration. "To put an extra £1,000 a month in my take-home pay, my salary would need to rise from £100,000 to £129,757 a year," he said. He normally earns about £100,000 and increasingly relies on dividends from his business to cover costs. He also covers all childcare costs for his 10-year-old autistic son.

What does the budget change for renters and first-time buyers?

Louie, 24, a chef in London earning between £37,000 and £40,000, shares a three-bedroom rental with two friends. Rent and bills now consume close to half his income. "I was always told that a third of your salary should go towards rent and bills, but it's coming up to about half now, which is a little bit mental," he said. His landlord has told the household rent will rise by £200 a month in November.

He backs the government's Your First Home scheme, which allows buyers to purchase a new-build with a 2.5% deposit backed by an interest-free equity loan. The scheme "should encourage a lot of young people to buy earlier," he said. But he is retraining — an access course, then a physiotherapy degree next year — because hospitality wages are too volatile to support saving for a deposit.

Where does housing support fall short?

Jonny Roberts, 39, a single father in Newbury with children aged 11 and eight, works part-time at McDonald's and as a tutor, plus an online master's degree. Universal credit fills the gap, but barely. He receives the three-bedroom local housing allowance rate of £1,200 a month, yet pays £1,300 for a two-bedroom flat.

"The rent we're paying isn't particularly high for the area," he said. "The housing element of universal credit seems to live in an alternate reality to the actual rents charged in the south of England."

Extra earnings shrink fast. For every pound above his work allowance, universal credit falls by 55p. Add income tax, national insurance and student loan repayments, and an additional shift can yield surprisingly little. "The more you earn, the less you keep," he said. He welcomed the £100 energy payment and the rollout of free breakfast clubs to 2,000 more schools, but noted there are 17,000 primaries in the country. He takes part in Changing Realities, a project with over 200 low-income parents, University of Glasgow researchers and Child Poverty Action Group.

Who gains from the smaller measures?

Peter Pillinger, 72, a widower and former Methodist minister from South Ribble, Lancashire, praised the scrapping of gas standing charges. "My gas bill in the summer is almost entirely standing charge," he said. "They are regressive." He questioned why the change takes until at least next spring, and asked what happens to those "who need higher usage for medical reasons." He supports the triple lock changes: "If my income is £25,000 or approaching £30,000, why should it not be taxed?" But he added: "I don't know how people live on just the state pension."

Helen, 40, in south-west London, gets the £100 energy payment through her band D council tax — a distribution method she finds strange, based on bands rather than need. Her mortgage rose by more than £600 a month when rates climbed; it is now fixed until 2028. Her husband's architectural practice, under four years old, is squeezed by the cost of steel, transport and construction slowdown. "It impacts everything we make, build and buy," she said.

Florist Danielle Walker, 37, from Wakefield, welcomed the cancelled fuel duty rise but said it "doesn't undo the increases we've already faced." The higher mileage rate, up from 25p to 35p a mile, and the business rates threshold rising from £12,000 to £18,000, will not help her studio-based operation. "Flowers are a luxury item, and when people are feeling the pinch, they're one of the first things people think to cut back on," she said.

The pattern across all six accounts is consistent: targeted relief arrives, but the structural costs — rent, tax thresholds, fuel — keep climbing.