Guardian - UK middle classes ‘struggling despite incomes of up to £60,000 a year’
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Original post by Napp
For me and my family, to live a comfortable carefree life that is debt free, holidays abroad are doable (they cost at least $5k here due to the distance) $200k would be ideal. This is nicely backed up by science as well as the local paper did a poll on it and concluded the average family needed just under $200k a year to live comfortably
Original post by AriTem
So we all set a point at which we decide we want to aim for. Point I am making is that you still have to work to maintain that point whether it's 30k/60k. There's a difference for people like celebs going bankrupt and those earning a wage and deciding a comfort level - that being most of us on monthly incomes can't go for more than a few months without getting into serious cashflow issues. That's not the case for people earning millions a year. Whether you're on 30/60/200k if you run into problems with cash if you don't have a monthly paycheck you're working class 😀
I'd go back to my original point that if a household earning £200k is living paycheck to paycheck (reminding ourselves again this is 5 times (!!!) what an average UK household earns and puts them squarely in the top 1% of earning households), then thats not because its hard to live comfortably at that income -, it's because that household has made a choice to prioritise a high level of day to day spending on luxury goods and services (we might call this "short term comfort") over longer term financial comfort. Eg: the example of your boss who chooses short term comfort of consumer goods (with multiple luxury motor vehicles being a particularly expensive one) over "long term" comfort.
So... how about we say that a household earning c£60k in the top 20% of UK earning households may feel they are suffering in terms of long term financial comfort if they choose to de-prioritise that in favour of short term comfort in goods and services consumption. They have "comfort" - just of a different sort created by their spending choices.
(edited 1 month ago)
Original post by AriTem
So we all set a point at which we decide we want to aim for. Point I am making is that you still have to work to maintain that point whether it's 30k/60k. There's a difference for people like celebs going bankrupt and those earning a wage and deciding a comfort level - that being most of us on monthly incomes can't go for more than a few months without getting into serious cashflow issues. That's not the case for people earning millions a year. Whether you're on 30/60/200k if you run into problems with cash if you don't have a monthly paycheck you're working class 😀
Any individual or family living monthly paycheck to paycheck when they earn substantially above the national average is entirely doing so due to their own profligacy.
In your theoretical example, you've got 35k on school fees 15k on holidays. That entirely unnecessary and optional spending.
Going back to basics on this one - the question is probably, given an income of £60k is, in the UK, a relatively high income - how can those earning it feel they don't earn enough (whether that ranges from it feeling a bit tight, to the claim is it "**** all"?
Well two reasons -
1) - People are very good at increasing their spending levels as their incomes rise, keeping up with the Jones's, lifestyle creep, whatever you want to call it. High earners have lots of cash to spend and lots of businesses are out their marketing their products, a perception that high levels of spending are just what rich people do. Case in point here AriTem - consider how quickly in an early post you asserted that a necessary conclusion of earning more money is that it should be spent on day to day consumer spending rather than saving. (actually it isn't - lots of wealthy people build that wealth by flying under the radar building up long term "comfortable" wealth whilst looking pretty normal and not getting drawn into lifestyle creep (and see point 2 below for why).
We're also very bad at rationally assessing short term vs long term benefits - it's much easier to visualise (and enjoy) that expensive holiday, or the expensive car to show off to your neighbours than visualise the rather more hard to imagine (and socially invisible) benefit of 20 years capital and income growth on your increased saving levels.
2) - Then you have the "hedonic treadmill" (good wikipedia page on this by the way). The happiness from new luxury purchases very rapidly resets to a normal baseline... save that your expectations of what is decent/bearable are stuck at the level of the luxury purchase. ie - what was once a luxury very quickly feels like a necessity and suddenly you're spending far more than you ever did but with the perception that any drop from that would be an unreasonable hardship.
Well two reasons -
1) - People are very good at increasing their spending levels as their incomes rise, keeping up with the Jones's, lifestyle creep, whatever you want to call it. High earners have lots of cash to spend and lots of businesses are out their marketing their products, a perception that high levels of spending are just what rich people do. Case in point here AriTem - consider how quickly in an early post you asserted that a necessary conclusion of earning more money is that it should be spent on day to day consumer spending rather than saving. (actually it isn't - lots of wealthy people build that wealth by flying under the radar building up long term "comfortable" wealth whilst looking pretty normal and not getting drawn into lifestyle creep (and see point 2 below for why).
We're also very bad at rationally assessing short term vs long term benefits - it's much easier to visualise (and enjoy) that expensive holiday, or the expensive car to show off to your neighbours than visualise the rather more hard to imagine (and socially invisible) benefit of 20 years capital and income growth on your increased saving levels.
2) - Then you have the "hedonic treadmill" (good wikipedia page on this by the way). The happiness from new luxury purchases very rapidly resets to a normal baseline... save that your expectations of what is decent/bearable are stuck at the level of the luxury purchase. ie - what was once a luxury very quickly feels like a necessity and suddenly you're spending far more than you ever did but with the perception that any drop from that would be an unreasonable hardship.
It depends on a variety of factors that go beyond annual gross and net pay levels.
Regional location, household size & number of child dependants, accomodation expenses, transport costs, healthcare needs, personal security needs, any disabilities and standard of living expectations.
Makes me remember an article by Petronella Wyatt I read 10 or 11 years ago titled: "It's hell being posh but poor:
Petronella Wyatt has sold her pearls and given up dining at the Ritz in Chanel suits because, like her friends in the 'Broke Generation', she says you just can't live on six-figures".
Regional location, household size & number of child dependants, accomodation expenses, transport costs, healthcare needs, personal security needs, any disabilities and standard of living expectations.
Makes me remember an article by Petronella Wyatt I read 10 or 11 years ago titled: "It's hell being posh but poor:
Petronella Wyatt has sold her pearls and given up dining at the Ritz in Chanel suits because, like her friends in the 'Broke Generation', she says you just can't live on six-figures".
And here's a followup article
https://www.theguardian.com/business/2024/mar/04/middle-class-workers-mortgages-bills-tax
https://www.theguardian.com/business/2024/mar/04/middle-class-workers-mortgages-bills-tax
As somebody that grew up in the lowest 20% of household incomes I find it hard to have much sympathy here.
Inflation and tax rises are certainly not positives and I don't believe that those who succeed should be punished however people in this thread have already made the important point - that those on higher incomes often choose to have higher spending.
For me, I view those things as a choice. Outside of a very limited number of careers, living in London is a choice. Going to Dubai rather than Greece is a choice. Driving an S class Mercedes rather than a Fiat 500 is a choice.
While the kind of politics I support would likely help those below about 80k, if any of them are genuinely struggling rather than actually just annoyed at having one less holiday then it's their choice to experience that struggle. One should live the lifestyle they can afford.
Ultimately it may grate some people who grew up middle class but your not the only people in this country and many are sick of political pandering to you and your whining from what is (and I can't believe I'm going sound to so woke - I feel sick) a very privileged position.
Inflation and tax rises are certainly not positives and I don't believe that those who succeed should be punished however people in this thread have already made the important point - that those on higher incomes often choose to have higher spending.
For me, I view those things as a choice. Outside of a very limited number of careers, living in London is a choice. Going to Dubai rather than Greece is a choice. Driving an S class Mercedes rather than a Fiat 500 is a choice.
While the kind of politics I support would likely help those below about 80k, if any of them are genuinely struggling rather than actually just annoyed at having one less holiday then it's their choice to experience that struggle. One should live the lifestyle they can afford.
Ultimately it may grate some people who grew up middle class but your not the only people in this country and many are sick of political pandering to you and your whining from what is (and I can't believe I'm going sound to so woke - I feel sick) a very privileged position.
Original post by StriderHort
Just my take but if you need to worry about your wages you're working class.
There are about as many definitions as there are economists.
Personally I view becoming middle class as being a home owner and employed full time as the lower middle class threshold and an above average income for the upper middle class threshold so about 40k.
Likewise, I view being upper class as not been dependent upon employment and privately educated.
A lot of these things are subjective though because they are likely influenced by background. To people may have the same level of ambition and long term aspirations but the threshold for basic success may well be lower if you were born poor.
Original post by Rakas21
There are about as many definitions as there are economists.
Personally I view becoming middle class as being a home owner and employed full time as the lower middle class threshold and an above average income for the upper middle class threshold so about 40k.
Likewise, I view being upper class as not been dependent upon employment and privately educated.
A lot of these things are subjective though because they are likely influenced by background. To people may have the same level of ambition and long term aspirations but the threshold for basic success may well be lower if you were born poor.
Personally I view becoming middle class as being a home owner and employed full time as the lower middle class threshold and an above average income for the upper middle class threshold so about 40k.
Likewise, I view being upper class as not been dependent upon employment and privately educated.
A lot of these things are subjective though because they are likely influenced by background. To people may have the same level of ambition and long term aspirations but the threshold for basic success may well be lower if you were born poor.
As you say there are many definitions, but I think to my mind you need to be doing a bit better for yourself in general
Like I own my own home outright, I'm employed and have a side business so I could count as middle class, but realistically I'm tied to my wages and carrying debt, I might consider myself upper-working class, but still v much 'working'
For anything approaching upper middle or even middle class (in my eyes) you'd need to be pretty much done with wages and have a higher stake in something such as investments, being a law partner, business owner or holding directorships or similar, £30-40k middle management roles don't cut it.
Original post by SilverPebble
And this too - https://www.bbc.co.uk/news/articles/crgdly318jeo.amp
Well it isn't
OK everyones situation is different and we don't know exactly whats's going in the lives of the people quoted in the article, but the most detailed example in the article near the end was pretty illustrative that the debt in this case wasn't caused by a poor salary, just lots of spending on discretionary luxury goods.
Eg: Matthew on £73,000 - earnings that place him easily in the top 10% of all earners (+ not living in London helps him further)
Quote from the article:
Monthly overheads add up, including £110 for property service charges, £550 for petrol, £240 for council tax, £300 for electricity, £200 for car insurance, £370 for dog day care, £170 for special diet dog food, £90 for mobile phone bills, and £200 for life insurance. After all these costs there is little left to enjoy life, says Matthew, whose daughter currently still lives at home.
“I’ve cancelled the gym membership, and we’re lucky if we’re going out once a month. It’s increasingly difficult to make ends meet and repay this debt.”
Again, we don't know everything about Matthew's life but that a lot of spending that Matthew has chosen to make. It doesn't say what his car is but based on £2,400 a year for car insurance & £550 on petrol a month it's a fair assumption we're into serious luxury SUV/sports car territory here. £300 a month on electricity is over double (not far off triple) the average household energy bill (so I think there would be some easy jumper and sock related savings here!). Then £550 monthly on costs for his dog... well we all like what we like, but again it was a choice to take on the responsibility of owning and looking after an expensive pet. On the mobile phone front a sim only deal would be much cheaper.
Matthew complains he doesn't have enough money to enjoy life... but he does, he chooses to spend it on the enjoyment of:
Eg: Matthew on £73,000 - earnings that place him easily in the top 10% of all earners (+ not living in London helps him further)
Quote from the article:
Monthly overheads add up, including £110 for property service charges, £550 for petrol, £240 for council tax, £300 for electricity, £200 for car insurance, £370 for dog day care, £170 for special diet dog food, £90 for mobile phone bills, and £200 for life insurance. After all these costs there is little left to enjoy life, says Matthew, whose daughter currently still lives at home.
“I’ve cancelled the gym membership, and we’re lucky if we’re going out once a month. It’s increasingly difficult to make ends meet and repay this debt.”
Again, we don't know everything about Matthew's life but that a lot of spending that Matthew has chosen to make. It doesn't say what his car is but based on £2,400 a year for car insurance & £550 on petrol a month it's a fair assumption we're into serious luxury SUV/sports car territory here. £300 a month on electricity is over double (not far off triple) the average household energy bill (so I think there would be some easy jumper and sock related savings here!). Then £550 monthly on costs for his dog... well we all like what we like, but again it was a choice to take on the responsibility of owning and looking after an expensive pet. On the mobile phone front a sim only deal would be much cheaper.
Matthew complains he doesn't have enough money to enjoy life... but he does, he chooses to spend it on the enjoyment of:
•
owning a luxury motor vehicle;
•
owning and looking after an expensive pet;
•
owning new mobile phones
•
choosing to heat his house far more than a typical UK household
(edited 1 month ago)
I don't have much sympathy here. Policing is an important career but by definition it's a job that you can do outside London. The guy in the article rents but renting and staying in London is stupid. The article also states that the debt was run up before he switched job so despite the inflationary shock and higher London prices, he's still paying his debt down.
The second guy in the article is again somewhat dubious. He has car repair bills of 6k and owes a total of 10k for the car. That sounds like he has crashed into somebody and sounds liable, likewise at 6k of repairs, he could have downsized and leased. He also manages to live in a 2 person household (so conservatively, a household income above 50k) and has 25k of debt on 3 credit cards, that's mad.
The Charl woman I have some sympathy for because it sounds like she ran up the debt during a period of redundancy albeit she's also lost her current job suggesting she's not very competent.
AMac has made a good point about the last guy. His spending is out of control.
Original post by Quady
Well it isn't
Can you justify that.
That's a salary level that only about 5% will earn so even in Surrey we can reasonably assume it's below 10%.
Also at that level even living in Surrey you should not have mortgage issues. Your choosing to live in a mansion rather than reasonable property. Not to mention choosing to live in Surrey.
Living in Yorkshire, it difficult for me to have sympathy.
(edited 1 month ago)
Original post by Rakas21
Can you justify that.
That's a salary level that only about 5% will earn so even in Surrey we can reasonably assume it's below 10%.
Also at that level even living in Surrey you should not have mortgage issues. Your choosing to live in a mansion rather than reasonable property. Not to mention choosing to live in Surrey.
Living in Yorkshire, it difficult for me to have sympathy.
That's a salary level that only about 5% will earn so even in Surrey we can reasonably assume it's below 10%.
Also at that level even living in Surrey you should not have mortgage issues. Your choosing to live in a mansion rather than reasonable property. Not to mention choosing to live in Surrey.
Living in Yorkshire, it difficult for me to have sympathy.
Sure
The contention is whether it's a 'huge' salary.
I suspect the data you're using isn't quite upto date with recent income rises, but let's go with it.
I wouldn't say being in the highest 10% of anything as being 'huge'. One in 10 people is quite a lot, even one in 20 is. Mensa has a 98th percentile of IQ for entry. Perhaps top 2% is huge, perhaps 3%, but 5-10%?
It's a large income for sure. But it doesnt even land you in the top tax bracket you're kinda proving the point. Someone with a huge income should be able to live in a huge house without difficulty. With a huge income in Surrey they should be able to live in a huge house in Surrey without difficulty.
As someone on living in Glasgow on £92k I've got sympathy with it, as I suspect I'm better off than someone earning £8k+ more in Surrey, especially if they have kids and run a car and perhaps don't have a partner earning similarly. Even with them paying less tax than I do.
Obviously they could cut their cloth accordingly, they've enough fat in their spending to do that. But Hunt wasn't suggesting they were poor, or weren't on a good income just that it wasn't huge.
The £100k point for the personal allowance tapering having never been uprated in 15 years generating perverse incentives, especially coupled with a cliff edge on free childcare is the real debate here. The pedantry over a single word is a tad daft.
Private education, a brand new car that costs more than about 20,000 pounds, a house (no matter where it is) that costs more than about 300,000 pounds. Choosing to have more than 1 or 2 children.
These are all luxuries. A luxury is whatever is more than an essential to live. If you are living on luxuries, you don't intrinsically deserve sympathy with balancing money.
These are all luxuries. A luxury is whatever is more than an essential to live. If you are living on luxuries, you don't intrinsically deserve sympathy with balancing money.
(edited 1 month ago)
Original post by Picnicl
Private education, a brand new car that costs more than about 20,000 pounds, a house (no matter where it is) that costs more than about 300,000 pounds. Choosing to have more than 1 or 2 children.
These are all luxuries. A luxury is whatever is more than an essential to live. If you are living on luxuries, you don't intrinsically deserve sympathy with balancing money.
These are all luxuries. A luxury is whatever is more than an essential to live. If you are living on luxuries, you don't intrinsically deserve sympathy with balancing money.
"A luxury is whatever is more than an essential to live"
Really?
So anything more than a cave, access to 1,800 calories a day and a fresh water supply is a luxury? Please....
Your internal logic breaks down with your examples. Any car is a luxury, any children are luxuries any education is a luxury. Why have you set some random bar of £300k for a house when a tent gives shelter if you find all the caves are full?
Original post by Quady
"A luxury is whatever is more than an essential to live"
Really?
So anything more than a cave, access to 1,800 calories a day and a fresh water supply is a luxury? Please....
Your internal logic breaks down with your examples. Any car is a luxury, any children are luxuries any education is a luxury. Why have you set some random bar of £300k for a house when a tent gives shelter if you find all the caves are full?
Really?
So anything more than a cave, access to 1,800 calories a day and a fresh water supply is a luxury? Please....
Your internal logic breaks down with your examples. Any car is a luxury, any children are luxuries any education is a luxury. Why have you set some random bar of £300k for a house when a tent gives shelter if you find all the caves are full?
Actually your point did not pass me by when I composed my post. Which just goes further to show that the more that someone earns after tax, the less reason that they have to be complaining.
Original post by Quady
"A luxury is whatever is more than an essential to live"
Really?
So anything more than a cave, access to 1,800 calories a day and a fresh water supply is a luxury? Please....
Your internal logic breaks down with your examples. Any car is a luxury, any children are luxuries any education is a luxury. Why have you set some random bar of £300k for a house when a tent gives shelter if you find all the caves are full?
Really?
So anything more than a cave, access to 1,800 calories a day and a fresh water supply is a luxury? Please....
Your internal logic breaks down with your examples. Any car is a luxury, any children are luxuries any education is a luxury. Why have you set some random bar of £300k for a house when a tent gives shelter if you find all the caves are full?
quady - No... place the context of "essentials" within the context of modern society and a UK average standard of living.
People who choose to spend their substantial incomes on lots of discretionary luxuries (large expensive high performance motor vehicles, large houses far in excess of the norm (remembering that large houses in turn cost much more to maintain, heat) pets with large monthly bill, etc... etc...) could create a comfortable headroom simply by cutting back on the discretionary luxury spending. Plus the hedonic treadmill effect means that very quickly these luxuries stop feeling like luxuries and your back where you started, except this time chasing an even more expensive luxury for the thrill...
It's a bit of a myth that all high earners "should" or do live it large in mansions with range rovers etc.... lots of people on high/large/huge incomes are very much "millionaire next door" types who live comfortably by not living excessively - in normal(ish) houses, with normal(ish) cars. They save a lot to give plenty of financial headroom in case bad times roll around, or to retire early.
If you continually increase your spending to match your income level because of a perceived belief that thats what wealthy people do (encouraged greatly by the marketing departments of companies who sell luxury goods!) well.... no income will ever be enough.
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