- Andy Burnham has this week been officially named prime minister and promoted to the top political job in the country
- Around one in five employees were promoted in 2017 (the most recent year that the ONS produced data for)
- The younger you are, the more likely you are to get promoted (27% of those aged 16-19, 17% of those aged 50-54 and 12% of those aged 65-69 were promoted in 2016/17)
- In the biggest companies in the UK and US, it takes an average of 30.4 months to get promoted (according to Standout-CV research from 2025)
- A promotion offers five great opportunities to get ahead with your finances
Sarah Coles, head of personal finance at AJ Bell, comments:
“This week, the former Manchester mayor Andy Burnham has finally been officially named as the new prime minister, completing his fast-tracked promotion to the top job in politics since his by-election win in June. The job in question comes with an effective overnight transformation that brings thousands of pounds in extra salary, a new central London home, and workplace perks that include his own police escort.
“Most people work more steadily towards a promotion, so it’s less of an overnight sensation. However, the changes that come with a promotion and a pay rise can be dramatic, and there are five ways to make the most of them.”
- Check the tax implications
“The fact that income tax thresholds have been frozen since 2021/22 raises the risk that a pay rise will push you over one. Not only will this mean paying a higher rate of income tax, it also reduces your personal savings allowance from £1,000 for basic rate taxpayers to £500 for higher rate taxpayers, and down to zero for additional rate taxpayers. It also increases your rate of dividend tax, and the rate of capital gains tax you pay jumps from 18% to 24% for both higher and additional rate taxpayers.
“You don’t have to take these higher taxes lying down. You can pay more into your pension, where contributions attract tax relief at your highest marginal rate. You can also take advantage of your Cash ISA allowance, to protect savings interest from income tax on savings, and you can use a Stocks and Shares ISA to protect your investments from dividend tax and capital gains tax.”
- Boost your pension
“One of the most effective ways to super-charge your pension is to commit to putting the first slice of any pay rise into it. You haven’t had a chance to get used to this money in your pocket, so you won’t miss it, and there’s no need to make any lifestyle sacrifices. The easiest way to make this automatic is to commit to paying a specific proportion of your pay into your pension, so it rises automatically with any pay rise or promotion. Boosting contributions offers the double-whammy of protecting you from additional tax too by reducing your adjusted net income.”
- Avoid lifestyle creep
“It can be far too easy to absorb extra income into your everyday spending, without having much to show for it. People will often trade up to slightly nicer versions of things they already spend money on – from holidays and cars to groceries – which eats into your pay rise without you noticing. It’s far better to make a conscious decision about the best way to use the additional income to build your financial resilience across the board.”
- Take stock
“Think about your overall financial position. In addition to increasing your pension payments, do you have expensive short-term debts you can pay down each month? Do you have enough emergency savings? Can you start regular investing? Some people will focus on one or two areas, but a lot of people will split their pay rise between a number of pots.”
- Automate doing the right thing
“Whatever steps you decide to take to improve your finances, try to set them up to happen automatically without you having to do the right thing every month – like your monthly pension payments. For example, you can set up direct debits to repay expensive short-term debts.
“When it comes to saving and investing, you can use regular payments to pay into a savings account every month and set up a direct debit to invest each month. Some providers, such as AJ Bell, allow you to set up regular investments with as little as £25 a month with no dealing charges to pay on top. It’s an effective way to reduce the time it takes to invest and means you don’t have to worry about trying to time the market, enabling you to build towards all your financial goals without a huge amount of effort.”
