Penstripe Student Planner Catalogue 24-25 - Flipbook - Page 102
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MONEY READY
SECTION K (8 PAGES)
MAKE MONEY MAKE SENSE
www.moneyready.org
Every day, people across the UK make financial decisions that shape their lives.
But too often, those choices are harder than they should be. When people don’t
understand the basics, the cost can be high.
This reference section offers an overview of some elements of financial
education that will help you to understand the following:
■
How people earn money
■ Why we pay tax
■
Budgeting: why, how
and ‘want vs need’
■
How to shop smart,
including a shopping challenge
■
Bank accounts, saving and borrowing
Earning money
In the UK, you can work part-time from the age of 14. In some local council areas,
you can work part-time from the age of 13.
There are strict rules about the hours you can and can’t work at these ages. This
is to make sure you are able to keep going to school and have time to do your
homework as well as getting enough rest to stay healthy.
Tax
When you earn above a certain amount in a year, a percentage of your
earnings are taken as Income Tax by HM Revenue and Customs (HMRC).
Whether you need to pay Income Tax depends on how much you earn, not on
your age.
Someone earning £20,000 per year pays less tax than someone earning
£200,000 per year.
HMRC use taxes to help pay for public services such as funding the NHS,
education, defence, infrastructure, and Social Security – paying for state
pensions and welfare benefits.
You don’t need to pay tax on all your earnings. At the time of writing, the
standard Personal Allowance is £12,570. This is the amount of income you
don’t have to pay tax on.
How much Income Tax you pay depends on:
■ how much of your
income is above your
Personal Allowance
■ the amount you earn
(the percentage goes
up when your earnings
reach certain bands)
During term time 14-year-olds can’t work for more than 12 hours each week.
■ You can’t work before 7am or after 7pm
■ You can work for two hours on weekdays
and Sundays
■ You can work for five hours on Saturdays
■ You can’t work at all during school hours
Taxable income
Up to £12,750
During school holidays you must have a 2-week break from any work in each
calendar year.
Copyright © 2025 Money Ready
Find out more here: www.gov.uk/child-employment
0%
Basic rate
£12,751 to
£50,270
20%
Higher rate
£50,271 to
£125,140
40%
Additional rate
Above £125,140
45%
You don’t get a Personal Allowance on taxable income over £125,140
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K-1
National Insurance is a tax that allows you to get medical care from the NHS.
It also pays towards your state pension.
If you are employed, the amount you owe for National Insurance and Income
Tax will be taken from your earnings through PAYE (Pay As You Earn).
If you are self-employed, you still need to pay Income Tax and National
Insurance if your profits are above a certain amount. You will do this by
completing a tax return and then paying the amount that it shows you owe.
Most adults pay Council Tax to their local council. The cost is usually split into
10 monthly payments.
How much you pay depends on where you live, not how much you earn.
Council tax helps to pay for essential services in your local community,
including street cleaning, rubbish collection and public safety.
Almost everything you buy has VAT (Value Added Tax) included in the price.
At the time of writing, the standard rate for VAT is 20%, which means the price
you pay includes 20% added to the actual cost of the item.
Description
Tax
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Tax rate
Other types of tax
During school holidays, you are allowed to work for a maximum of 25 hours a
week. This includes:
■ No more than 5 hours on weekdays and Saturdays
■ No more than 2 hours on Sundays
Description
Make money make sense
Band
Personal allowance
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K-2
Copyright © 2025 Money Ready
Make money make sense
TAX
