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Personal Incomes

Volume 887: debated on Tuesday 25 February 1975

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asked the Secretary of State for Social Services (1) what is the net annual spending power—after taking into account income tax, national insurance contributions, &c.—of a man with a wife and three children earning a gross annual salary of £30,000; and what percentage increase in his gross salary would be necessary today in order to raise this net annual spending power by 20 per cent.;(2) what is the net annual spending power—after taking into account income tax, national insurance contributions, &c.—of a man with a wife and three children earning a gross annual salary of £25,000; and what percentage increase in his gross salary would be necessary today in order to raise this net annual spending power by 20 per cent.;(3) what is the net annual spending power—after taking into account income tax, national insurance contributions, &c.—of a man with a wife and three children earning a gross annual salary of £20,000 and what percentage increase in his gross salary would be necessary today in order to raise this net annual spending power by 20 per cent.;(4) what is the net annual spending power—after taking into account income tax, national insurance contributions, &c.—of a man with a wife and three children earning a gross annual salary of £10,000; and what percentage increase in his gross salary would be necessary today in order to raise this net annual spending power by 20 per cent.

I have been asked to reply.Assuming that the children are under 11, that the men are contracted out of the graduated pension scheme, and that 1974–75 tax rates and allowances apply both before and after an increase in salary, the figures are as follows:

Gross SalaryNet salary*Percentage increase in gross salary required to increase net salary by 20 per cent.
£ p.a.£ p.a.
10,0007,77232·9
20,00011,71752·8
25,00012,92850·7
30,00013,94745·6
* Net salary is gross salary less tax and national insurance contributions.