Depending on the what you do at 16 your finances will differ greatly to that of you friends and peers. Obviously young people that go straight into employment at 16 have more money than those that stay on in education to begin with. Finances can be tight for everybody so learning how to manage your money and budget what you have got is key.

On this page you will find information on some of the finance issues that may be affecting you if you are going into work whether that is full time or part time. You will usually be paid your wages through your bank account not in cash – so make sure you have opened your own bank account. Choose carefully – get the facts.

Minimum wage

The hourly rate for the minimum wage depends on your age and whether you’re an apprentice. It is often updated in April, so do your best to check you are being paid the current and correct amount.

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2018 £8.21 £7.70 £6.15 £4.35 £3.90

Pay slips
When you get paid your employer has to give you details of your pay, usually called a pay slip. Your pay slip shows the total pay (gross pay) you have earned that week or month (depending on how often you are paid) and how much has been taken off (deductions). The main deductions are tax and National Insurance. What is left is your net pay.

Keep your pay slips. You may need them. They give you a record of important information such as how much tax you have paid and will help you if you think you have paid too much tax in any year.

You employer will also give you a P60 form each April – this summarises your pay and tax payments for the year. Keep it safe.

If your pay is low enough you may be able to get Working Tax Credit. You can also call the tax credit helpline on 0845 300 3900. (8am to 8pm – have your National Insurance Number ready when you call.)

Also if you have rent to pay you may be eligible for Housing Benefit. Your pay slips and/or your P60 will be needed to make claims for all low income benefits.

Income tax
No matter how we feel about it we all have to pay taxes – without this money the Government couldn’t pay for public services such as education, welfare benefits, pensions, roads and the health service. But the amount you pay depends on how much you earn – so if you are on a low income your tax bill will be much lower than someone earning more.

If it is your first job after leaving education your employer will ask you to fill in form P46 to help work out the right amount of tax you should be paying. Everyone has a tax allowance – an amount of money they can earn each year before they pay tax and tax is only paid on income above this amount.

Employers have to deduct tax directly from your pay – if you feel you are being taxed more than you should be you can contact the HMRC who will look into it and refund you any tax overpaid.

What’s a P45 form?
Employers will give you this tax form if you stop working for them. Do not lose it you will need it when you start a new job or apply for any benefits.

National Insurance
Most people have to pay National Insurance as it counts towards benefits you may be able to claim in the future such as incapacity benefit and your State Earnings Related Pension Scheme (SERPS).

Most UK citizens have a National Insurance Number sent to them automatically at the age of 16. Your number will have 2 letters followed by 6 numbers and then one more letter. It is important to keep a written record of this number as it is yours for life!

There are different levels of contribution and the amount you pay will depend on how much earn.If you’re between 16 and 20 years old and haven’t received a National Insurance number contact the National Insurance Registrations Helpline on 0845 915 7006 for advice. Lines are open 8.00 am to 5.00 pm, Monday to Friday.

Still looking for work?
Under 18s do not usually get any benefits except in exceptional circumstances such as having caring responsibilities, or unable to live at home, for example. If this is the case you can contact Connexions Dudley who will be able to support you with making a claim.