When your income changes

UK income tax is banded, National Insurance is banded on a different set of thresholds, student loan repayments are a flat percentage above a third one, and pension contributions come out before most of it. The pounds at the top of your income are therefore your dearest, and the pounds at the bottom are your cheapest. That single fact runs in both directions and explains most of the surprises.

It means a pay rise is worth much less than it sounds, because the extra is taxed at your highest rate, and the effect is at its most severe between £100,000 and £125,140 where the personal allowance is withdrawn and creates an effective 60% band. It also means dropping hours costs less than it sounds, for exactly the same reason in reverse. The people who decide against four days on the strength of a 20% pay cut are usually looking at a 16% to 18% take-home cut.

Then there are the cliffs, which behave differently again. Free childcare hours are lost when either parent's adjusted net income passes £100,000, and the high income child benefit charge starts at £60,000 and takes the whole benefit by £80,000. Those are step changes rather than gradual ones, so a small move in income near one of them can be worth far more, or cost far more, than the income itself.

The last part is timing, and it is the part a spreadsheet handles worst. Leave starts on a date and steps down six weeks later. A nursery place starts in September. A redundancy payment arrives once. Averaging any of that across a year produces a number that is true of no month you will actually live through.

Each takes one change, works it through at real UK salaries against current thresholds, and says what it deliberately does not attempt to calculate.

Free, no account, and each runs in your browser.

An income change rarely arrives alone. Leave starts and the childcare bill starts a few months later. The raise lands in April and the fix ends in June. Going part-time changes the take-home, the pension contribution and the nursery hours in three different months. The question is never what one of them does in isolation; it is whether the household still works with all of them in place.

Dated changes are how that gets stated. A salary change, a bill starting or ending, an income stopping, a one-off payment in or out: each carries its own date, and the forecast applies it on that date rather than spreading it. So the two-month gap between the leave ending and the nursery place starting shows up as two months rather than disappearing into an annual average.

Comparing two versions is how the household decides. Save the current plan, save a second version with one of you at four days, and read them side by side across cashflow, profit and loss and net worth at one year, five and ten. It converts an argument about whether you can afford it into two numbers you can both look at.

The cashflow forecast is where a temporary drop gets tested, because a dip that a yearly view absorbs is exactly the dip that empties a current account in month seven. It reads day by day, month by month and year by year, and every figure drills down to the individual bills that made it.

CrestCast forecasts a whole household ten years ahead, both incomes and everything they have to cover, in today's money by default. It models UK income tax including Scottish bands, National Insurance and student loan plans, so a change in hours or salary produces a take-home figure rather than needing one typed in. If you are weighing this up as a couple, planning together and planning around children cover how the shared household is put together.