To not understand how people fund their lives and feel a bit jealous?

Well, we had this throughout the years. However, we only put airfare on credit cards for protection purposes but saved up for our holidays so the card was paid off same month. We took the stance that if we didn’t have the money for things, we didn’t buy/spend.

we have driven nice cars and bought only a few new - using car allowance when we had it. Thereafter always sold car to buy another, always 1 to 3 years old and didn’t keep them but 5 or 6 years, selling on before major services, before car troubles would start.

overpaid mortgage when we could.

always put money into various savings pots when we could - towards next car, towards next holiday, towards house repair fund etc.

Years down the road now, this has left us in a much, much better position now than our friends who were spending like there is no tomorrow. We are in track to retire in a few years without a mortgage, with savings / annuities/ pension to have a good monthly “income” and do some reasonable travelling once a year. Our friends are heaped in debt, had interest only mortgages, little savings etc.

don't begrudge playing the long game as you’ll eventually reap your rewards.

@DustyMaiden and @WickWood I presume you have posted those ridiculous comments without having read the thread.

The level of economic illiteracy in the UK is so disturbing and is the primary reason why we are in this situation with perpetually declining living standards at all levels of earnings: clueless people keep voting for policies that will ensure the continuation of this because they can’t be bothered to do basic maths.

If you earn almost 200k and can't afford new shoes then you really do need to take a long look at your outgoings!

I suspect you fritter it away, don’t invest .

I forgot for point 1), also of course the need to remove the withdrawal of the personal allowance. I also think that (like in France and many other countries) there should be an additional tax-free allowance added for each child in a household unit. Again, this will increase economic participation, increase growth, lower the welfare bill, and decrease child poverty and reduce the gender paygap and poverty of women later in life so will more than pay for itself.

I suppose my frustration is really that economic debate becomes entangled with polarised politics and therefore people adopt ever more extreme positions and become so entrenched because of their (understandable) anger at their own living standards declining that they are susceptible to politicians who are selling them fake solutions with slogans that don’t stand up to the slightest economic scrutiny. Turning the UK economy around requires an integrated programme of change with clear policy objectives like I’ve set out in my vision of how it could be achieved, with some measures that would cut unaffordable expenditure, some measures that would cost money but in vital areas where the return on that money would be many times what we spend, and most importantly measures that will increase economic growth.

Nobody minds if their tax goes up 3% if their real-terms income has gone up 10%. The first priority therefore has to be generating growth, creating the conditions where that will happen. All political parties in the UK claim this is what they want to do yet not one has even proposed the very obvious measures that would achieve this despite multiple economists having made it crystal clear to them the first steps that are required in order to do so. Reeves said pre-election that growth was her main priority, yet she has taken measures instead that obviously would have the opposite effect. It’s very disappointing as I thought with her background she might do far better, but sadly yet again we seem to have a Government captured by ideology (just like the last lot) rather than having the integrity to make decisions based on economic reality and what will actually benefit the people who live in the UK.

I wish the population would question why this is the case. These people who claim to be acting in their interests are not doing so. They are trying to create electoral advantage and stay in power by polarising opinion and creating social division, which again undermines any opportunity for growth. A disintegrating society full of resentment and hate and no concept of collective good and social conscience is never going to result in any outcome other than decline and never has, anywhere in the world at any point in history.

The only way out of this situation would be for people to be objective, take a step back, realise that everyone has been screwed over, and instead of taking that (justified) anger out on each other, press the politicians to implement evidence-based policies that will actually improve the situation.

I become more pessimistic daily that the UK population will actually do so, unfortunately, and so the decline continues.

I would:

1. Reform the tax system so that taxes are levied on a household unit basis like in pretty much every other developed country, reduce the universal credit taper rate to 40%, and make child benefit and childcare funding universal again. These measures would increase economic growth, increase overall tax revenue and reduce skills shortages. I would also strengthen our rules around transfer pricing to ensure that it is more difficult for companies to transfer revenues from UK sales to other lower tax jurisdictions. Implement ID cards to stamp out the black economy and tax evasion so that it is illegal for transactions to take place without a registered tax number being provided.

2. Replace the NHS with the kind of model used in France of Germany. For a very similar percentage of GDP these services have far superior outcomes and patient care. Subsume social care into the NHS service and raise income tax to fund this (the growth generated by 1) would be sufficient to do this in time.

3. Reform the UK’s energy pricing model so that it is not based on the price of Gas. Uncapped energy costs for businesses that are not at all representative of production costs are driving inflation and reducing output across the economy.

4. Reduce the focus on achieving net zero in a short timespan and redirect some of the money being spent on that to climate mitigation measures such as increased flood defences and investment into carbon capture technology. Implement proper strategies for food security, water security e.g. building more reservoirs. It’s utter negligence not to have done this.

5. Implement a proper industrial strategy with Government-backed loans for startup businesses, tax breaks for small businesses, investment into key technologies and areas where the UK already has significant strengths e.g. pharmaceuticals, tech, the arts, defence. Create business clusters. Strength rules to prevent large businesses being able to take over challenger startups. Have a unified source of compliance/ export support for small businesses in different sectors that could manage this administration for them to make it more viable for them to export if lacking internal expertise or resources to navigate the system.

6. Deal with the UK’s self-imposed trade barriers that are costing us 4% GDP per year and compounding. As a minimum, rejoin the single market and customs union as a matter of urgency.

7. Total reform of the dire UK education system. Half class sizes over time - education must be the number one focus of our public spending if this country is going to have any future. Far fewer people should go to university, perhaps 15-20%. This should be funded by grants not loans as it benefits everyone. Re-establish technical colleges with strong links to businesses and meaningful apprenticeships leading to qualifications and proper career routes similar to the system in Germany. Give children more options to focus on their specific talents/ interests with schools specialising in different areas while still doing core subjects from age 15 onwards. Implement a proper regulator to replace OFSTED which prosecutes Local Authorities itself for illegal behaviour rather than leaving it to individual parents to enforce the law through tribunals, and levies fines of sufficient magnitude on Local Authorities to disincentive illegal behaviour denying children access to education. Establish sufficient schools places for children with different needs so that all can learn properly. Make adult learning and retraining available again and highly subsidised if not free.

8. Reform our pension system, which is simply unsustainable as it stands. Australia had similar problems and dealt with them a couple of decades ago. We should gradually move towards something more comparable to their system for state pensions which is fiscally sustainable. We also need to address the public sector pensions which are held off balance sheet (!) and literally unpayable, with liabilities running into trillions of pounds with an ageing population and declining birth rates. Some realism about what is realistically payable will have to be accepted although many will find this unpalatable.

9. On housing I would make it much easier for people to purchase a plot of land and self-build, with Government security making it viable for mortgage lenders to lend on such projects and implement simple planning procedures for self-building and make VAT reclaimable on the building materials/ costs for the individual who is building a property to inhabit as their main residence. This would make housing cheaper because the profits of the big building companies would be removed (approximately 20% of the cost of new builds) and would hugely improve build quality.

All of this is possible and affordable in an economy if you put a rational tax system and industrial strategy in place that will create growth. Not a chance of that happening in the UK though.

Hi Roses. This is a good point (and, indeed part of the point I was trying to make: single people and especially single parents are enormously disadvantaged by our tax system in an egregious manner and this needs addressing. It also makes it impossible to judge how much disposable income a household might have based on a gross earnings figure).

I’ve rerun the numbers based on a couple earning £90k each. Their net pay after tax, student loans and 15% pension contribution (so on an equivalent basis to my original examples) would be £4,085 each so a total of £8,170 compared to the lone parent’s £6,549 i.e. they have an additional £1,621 per month.

This is obviously hugely unfair on the lone parent trying to do the work of two people, to be also taxed more on the same household income and is something that our tax system needs to address urgently.

The couple each earning £90k would still have no child benefit, but would benefit from the reduction in childcare costs reducing their childcare cost by approximately £1200 per month with funded hours and tax-free childcare. Overall, this makes them around £600 per month better off after tax, childcare and housing costs than the couple each earning minimum wage and living in rented accommodation of equivalent size (both in London so that costs are equivalent. If the couple on minimum wage lived in a cheaper area of the country there would be an even smaller difference in net income).

It’s not much of a reward for such stressful jobs, working hard for promotions, all of that studying etc, the risk of a mortgage etc.

Later in life when childcare costs go down a bit the higher earning couple will benefit. But I think these calculations highlight very clearly why it is a nonsense for people to state that someone must be rich because they are X amount. The UK system is one of the most redistributive in the world and the taxes on higher earners are some of the very highest in the world. Making certain public services means tested has caused immense economic harm by creating these cliff-edges and the Chancellor’s first priority should be removing them due to the strangulation of economic growth and social mobility that they create.

Well I'm 41, 3 kids (2 ND) Statutory homeless, made redundant after 20 years in my job last year...so if you wanna feel better about yourself and your life, i dare you to live mine for just a couple days SMDH

I understood the reason for picking London as the example but the problem is people see a case whereby a low earning family get over £2k a month in UC and then apply that to all low earners. You can understand the nuances but not everyone can.

I see it time and time again on here where people mention 'top ups' with no actual calculations, just a notion that everyone gets them. It is perhaps not a fair comparison but it reminds me of the posters who say everyone who gets PIP doesn't work, despite it being something that many people in full time work can claim.

InPraiseOfIdleness - Okay how would you change things then? Would you keep minimum wage? Reduce or increase the earnings threshold before you pay tax? Make child benefit universal? Increase or decrease business rates? Scrap the triple pensions lock? How would you fix things?

I am genuinely interested.

All that would happen then is that they’d get slightly less universal credit towards their rent, because their rent cost would be lower. In fact, their “rent allowance” from universal credit would be likely to have less of a shortfall compared to what they actually have to pay than they would in London. Their childcare cost might be slightly reduced, however they only pay 15% of it anyway because universal credit will pay the rest, so overall they would likely be even better off comparatives because the other aspects of their earnings, tax, national insurance, child benefit receipts and universal credit remain exactly the same and don’t take into account the differential cost of living in different areas.

Ironically, I provided the example of a couple living in London because it would be the most extreme, with the highest costs, to show that with two children and average housing costs even in that case a couple on minimum wage who are renting would be better off than a lone parent earning £180,000. The point of that specific example seems to have sailed about a mile over your head.

And? I don’t understand you point. I’ve expressed myself perfectly clearly and set out how these distortions create perverse incentives at every earnings level. This particular thread is (as often happens) multiple people attacking the OP because she had the audacity to note that everyone in the UK is getting poorer including higher earners who are taxed so heavily that they have nothing like the lifestyle that their salary on paper might indicate would be expected. Posters like you seem unable/ unwilling to comprehend this, even when it’s explained with numbers, and it’s tiresome attempting to speak to irrational people who seem to have a hatred of anybody who isn’t exactly like them. I also pointed out how similar cliff-edges affect lower earners, specifically those who receive Universal Credit, due to the the taper rate being too high. Did you actually read my posts before venting your outrage? It appears not.

Ultimately, while there is a significant proportion of the electorate who think like you and vote for these idiotic policies whereby they think attacking the most vulnerable and disabled like your little friend here, and impoverishing/ resenting the meagre support for disabled children is the answer, and simultaneously think taking higher earners marginal tax rates exceeding 100% in some cases is the answer, everyone in the UK will continue to get poorer. It’s exactly the kind of mentality - searching for scapegoats rather than engaging with evidence, facts and rational debate - that leads to the idiocy of hate for immigrants, Brexit and all of the other nonsense which has hastened the UK’s economic decline in recent years. If you wish to continue to get poorer in perpetuity then carry on as you are and that will be the result.

None of my posts were about me or my lifestyle, despite your personal insults.

Oh don’t leave! I’m so intrigued!!

What is it you feel you are missing out on? What do other people have that you don’t?

I don't think anyone has doubted the OP's lived experience. She admitted that she has nice holidays and meals out so hasn't pretended to be on the breadline.

What has annoyed me and Samslaundry is that other people (NOT THE OP!) have compared them to minimum wage earners and their 'top ups'. There is an ongoing narrative that the gap between high earners and minimum wage ones is tiny or doesn't exist which in both our experiences is not the case but because there are situations whereby this may be true this has been taken as being absolute.

Why did everyone jump on the op saying she must be wrong and not believe her lived experience and then get cross because others don’t believe yours?

She didn’t say they were on the breadline, just that she was surprised being a high earner that it seemed that they did less than other comparable friends and wondered why. A perfectly interesting and valid question.

Just FYI (genuinely) lots of us MN users without kids. Lots of point to it, lots of useful content.

So I'm "personally attacking" you when I say your reading comprehension sucks but it's fine for you to keep claiming other posters are completely financially illiterate. FFS.

I haven't seen anyone insult higher or lower earners. All me and the other post have done is explain our own situations income of 30-35k and no benefits except child benefit.

Just clearing up the misconception on this site that anyone not earning 100k is getting bucket loads of benefits making them richer than 100k households. And you carry on insisting and shitting that that is somehow "hating and resenting higher earners" 🙄 not sure if you're trolling or just have extremely poor reading comprehension anymore

As I said, if you have any figures to refute any part of my calculations then go ahead. My point was to make clear how stupid these posters are who say “I earn 1/4 of that, what are you on about! You must be rich!”. Such comments, as my calculations demonstrate very clearly, show that these people have zero understanding of tax or economics and that many of the people they resent for earning more than them - and whom are paying for the access to state education for their children, their and their children’s NHS care, their infrastructure, policing, fire service, roads, railways, defence, AND their childcare and other child benefit etc that they don’t receive themselves - are actually poorer than them after tax, childcare and housing is paid.
Significantly poorer.

This is a direct quote from you.

TBF I think those in the £180k bracket are pinched when their DC are under 6. As are many others but the marginal difference does not necessarily seem fair in relation to the intellectual and arduous nature of some of their jobs.

However, fast forward a few years and the childcare costs drop and prospects are likely to improve. They are the ones more likely to receive an inheritance. Fast forward another couple of decades and both parties are likely to retire on about two thirds of their individual salaries, so the equivalent of £60k each. With mortgages paid and no NI or student loans to pay, the chasm becomes incredibly wide compared to those who have been on average salaries for their working lives. If the status quo remains, whack on another £24k in state pensions.

it’s a long game.

Utter rubbish and not what anybody said, at all, is it?

My point was that people will not work more for little or no financial benefit at all. That two households with similar earnings should have similar net incomes because these economic distortions are so damaging to growth and productivity. That headline gross earnings figures are only taken to be an indicative of how much disposable income someone has by people who are completely economically illiterate (as you and some other posters have demonstrated quite clearly in your responses in which you’ve denied economic facts yet refused to provide any evidence to support your entrenched and factually vacuous assertions).

I have also pointed out that constantly insulting those with either higher or lower earnings than you out of spite will achieve nothing and will ensure this economic decline continues, which will make you poorer, as well as those you despise because the extremely high marginal tax rates and counterproductive tax cliff edges mean that work is discouraged at various levels of earning ins the UK, including - as I stated earlier - for those claiming universal credit who are also disincentivised financially from working full time/ seeking for the same reason as those who hit the child benefit threshold or personal allowance/ childcare funding withdrawal threshold. To try to paint my posts as some sort of thing about “rich” people just shows you didn’t read them properly.

Functional tax systems that incentivise productivity and growth and higher tax revenues and living standards for everyone don’t work like that, because it doesn’t work.

The chip on your shoulder appears to be obscuring your view of reality.

FFS - there’s one of these threads every week or so - all these poor people earning £180k and the poor relation to their friends. Maybe you need to move up to the midlands where most of your neighbours will be less well off than you 🤣🙄

Samslaundry - we are talking to a brick wall here mate. At least we now know we are richer than what we thought hey? I'll see you in the Maldives next week 😂we will leave all the high earners to go to Butlins. Poor sods.

Fine you win. Your one scenario proves minimum wage workers statistically are significantly richer than ones on £180k after tax, housing and childcare bills.

Oh wow that's a lot of words you're putting in my mouth.

My original comment when I mentioned horseshit was actually aimed at the idea that someone earning 180k is worse off than someone on 30k because of "benefits and free stuff" it wasn't originally aimed at any of your comments. Same for the comment about disabled children I quite literally said I've seen on other threads posters talking about low income families getting thousands of pounds in benefits but failing to mention there's more to the story such as numerous disabled children. I wasn't just talking about your posts, not everything is about you.

What makes you think I'm angry? You're the one who seems irrationally angry and that's why youre so hellbent on twisting what I've said. It's a thread everyone else can see in black and white what I've said you are making a fool of yourself and I'm tiring of repeating myself. So where have I displayed any anger to anyone earning more money than me. Unless you consider trying to clear up the misconception that all low earners get piles of benefits and free stuff as "anger and resentment"

Anyway not sure why you're still going when you said you had a busy evening