Meet the Henry- High Earner not rich yet

my Dad has dementia and that will likely be sold to pay for care home fees, which could leave my mum with nowhere to live.

That's doesn't happen though, partners aren't made homeless if one goes into a care home.

But some people have done a lot to earn what they have. My parents both grew up in poverty, both left school at 16, my mum to work as her single couldn't afford for her not to, and my Dad was thrown out by his alcoholic father with only the clothes he was wearing so had to work 4 jobs to pay for a room in a shared house, from 10 he was doing a paper round, helping a milkman etc to get money to buy food for him and his brother as they weren't being fed. No one gave them any advantages. He then tried to be responsible and pay into a private pension but Brown raided that and made it nearly worthless so he had to work until 73 to be able to afford to retire. Their main asset is their house, my Dad has dementia and that will likely be sold to pay for care home fees, which could leave my mum with nowhere to live.
People who work hard all their life, take very little, pay in a lot, then end up with nothing to show for it, which is very wrong.
My brother and I were not given any help, beyond the great value of a stable home and encouraging parents. My brother works minimum wage due to his SEN, but still managed to save and buy a house. I graduated and started work on 17k and bought my own flat and worked my way up the housing ladder. Again, should that be taken from us?
We are loosing the incentive to work hard, progress, which is a very dangerous place for our country to be. We are stagnating due to attitudes and policies which penalise hard work and progress.

I don't think that the point is necessarily that they are struggling, and I think the details in the article are a bit skewed to make a point.
But the message of the article is very valid, people of that sort of money should be enjoying a nice lifestyle, but they aren't, as they are paying to support others.

Growing up my mum also used to say we were paying for another whole family. For a bit I thought that meant my Dad actually had another family somewhere, but what she meant was the amount he was paying in tax covered benefits for a whole other family. They paid for private school for my brother as he was so badly bullied and SEN needs not met in state, and I got a scholarship to a private school so as a family we were taking very little out, and I think that was her way of expressing their frustration at 'the system', after they both came from poverty and worked their way out of it, only to find a big chunk of their money taken by Blair, Brown etc.

Does Henry get his work office cleaned? His rubbish collected? His post delivered? Does he use shops? Visit restaurants?

All the Ethels work to help provide these services? Is that not worth something?

Maybe everyone should stop paying tax full stop? We all have private healthcare and can all take our rubbish to the big tip mound ourselves, walk everywhere because of no public transport, look after our elderly parents ourselves, home educate etc etc.

Is Ethel sending her children to school? That is also being paid for by Henry.

Anyone who is struggling on a salary of £100k is deluded.

Anyone who thinks that a salary of £100k means a person is rich is also deluded.

It's a very conformable salary but it doesn't make anyone wealthy or rich in the current environment. Comfortable yes, rich no.

I absolutely get the point the article makes that higher earners are not seeng the benefits. These are people who are working 12+ hour days to work their way up the corporate ladder, but not seeing a noticeable change in their lifestyle. There will of course be the 'boo hoo, cry me a river, diamond shoe too tight love' comments, but this is a very real issue, not for them, but for the country as a whole. Most of us rely on the smallish number of net contributors to cover our healthcare etc, so we need then to stay. But why would they, when their skills earn a much better lifestyle abroad. Taxing 25% of 100k gets us a lot more than taxing 40% of nothing if they leave.

Very few of us are net contributors. DH and I earn about 90k between us, pretty decent it would seem, surely we are net contributors at that amount?

Of that, we pay around 20k in tax and NI.
We have 2 children in school, each costing country about 6k, plus they get the infants Universal free school meals - £800 per year
Universal child benefit for 2 children - about 2k per year
I get PIP - 4k per year
So without even factoring in our nhs costs, of which we all have some - DD and DH are coeliac, I have arthritis, other DD has some health issues, we are net takers.

Very few people are in reality net contributors, and without them we will lose access to even basic free heakthcare, schooling etc. As someone said upthread, we are a poor country perceived as rich, we are hanging on by a thread.

The word @warycrow is getting wrong is generational. We didn't inherit because we didnt benefit from the inheritance; we passed it through a generation. We grew up in a growing economy, and did okay, but the equivalent opportunities are fewer now, so this is an attempt to level the field. I can't do so across a whole generation, but I can arrange a 1 time, one off fix, and will grant it to my flesh and blood, rather than some random.

Same. DH and I lived in a grotty flat with no window pane in the bathroom so freezing (showered at work in the winter) and bought a 3 bed house zone 3 London for 310k in 2014, did it up, sold it for 500k in 2020. When we bought our joint household income was around 70k, bit for 2 of those 6 years between 2014 and 2020 it was half that due to me being on mat leave.

We now live in a lovely 800k house in a home counties village. Our combined salary is similar to 'Henry' salary on his own, so it is doable. But 2 people earning that amount between them do much better as each have tax allowances and not paying higher rate.

I know a gardener who went to private school but has severe asd so can only work freelance doing what he loves. He doesn't earn enough to pay income tax but his parents downsized and gave him 280k to buy a very run down 1 bed house in 2017 in a poor part of London in cash. He did it up himself.

He qualifies for (low income) grants to get a spanking new boiler and his small house is immaculate. I think his net worth is higher than mine and dh's.

As I've mentioned it up thread, I'm likely in line for a significant inheritance (hopefully not for years to come and if it all goes on either of my parents' having a better quality end of life I want every penny spent on that). I am not certainly not giving that to Ethel (or Henry for that matter)!

I just don't think I should be given that choice - lots of it should be taken from me. Because very few people in this world actually be good enough to distribute it fairly, but there is nothing I have done in my life that means I deserve it. It's just luck because my parents have money (and for my mum at least, a large part is then luck because her parents had money!).

I really appreciate your measured response @waryclam , so thank you. Yes, we have been in the right place at the right time, but we have worked damned hard for every brick we have set into our family wall. DH and I started with nothing. We both went overseas to earn a stake (and to have fun) and we were/are open to calculated risk-taking. Neither of us has has a "job" or employment since 1990. But it isn't a route for everyone, not even most poeple.

And this is generational wealth at play. Of course you do the best for your child.

But you are rich if you can afford to give away £300k. And if your daughter is on minimum wage, with no housing costs and £300k in assets at 26, she's well on her way to being better off than Henry in long run. He has more monthly income (adjusting for housing costs and tax), but if he lived on the same budget as your daughter and saved the rest it would take him around 13 years to save up that 300k [ok less probably because of compound interest so say 10 years], by which time your DD's house is probably worth 350-400k. Plus he's already 34 - he's been working around 8 years longer than your DD.

Adjust that for a scenario where both people are on minimum wage, or with people are Henry. It's simply impossible for the person without the generational wealth to catch up.

It's why we should be taxing wealth. Understandably you don't redistribute it out of the goodness of your heart (and I wouldn't either!) and so you'll look to give as much as possible to the people/causes you care about. In your scenario I'd be doing the same as you.

This is what government is for though - making decisions in the interest of the greater good. These types of advantage purely by luck of the draw are simply not how our society should be working.

@Papyrophile You're being sensible to give it to your DC and I'm sure they're very grateful. It will be a life-changing amount for them.

I just hope your DC doesn't look at Henry and think "he's the problem - we need to tax the rich like him more", while deriving moral superiority from being closer to the working man / not a sell-out / not a materialistic jerk who only cares about salary, etc, etc...

(Nothing in your post implies that your DC specifically acts like this, editing to say - but it's a very common attitude on MN in my experience.)

That represents the residue of both of our parental estates, deeded by variation, plus as much again from what we have earned and saved in 50 years. We are 70-ish. DH started , and still runs, a small specialist company, in 1992. I was a freelance creative and very successful until I had DC at 43. But we did not inherit anything until quite recently, so we have had to earn everything ourselves. We bought our forever home well, I won't mention luck, but property has helped, and our location is suddenly desirable.

We are what I think of as "well-off" @Waryclam, but I don't quite understand how it happened.

I think Henry is not unreasonable to feel aggrieved that he has only £6k extra disposable income for his £50k income increase. I am sure his instincts are kind and that HENRY does not want to live surrounded by poverty.

My DC is earning NMW in the SE, with an hour's commute each way. Without family support...

Yes totally agree. When I started work in 2012 the people who were at the level I am now had very nice lives - they lived in places like Clapham, Fulham, Putney, they had nannies and private school for their kids and had multiple foreign holidays every year. Those people are mid-late 40s now, maybe early 50s. They got on the housing ladder preGFC and are now thousands of quids in.

Now I have reached the equivalent level in my career I live in an edgy part of east London, I did have a nanny but spent basically all my disposable income on it - most of my peer colleagues use nursery, kids at state school and I haven’t been abroad since my 4yo was born. There has been a very dramatic shift downwards in living standards in the last decade.

Out of interest, do you consider yourself rich, and/or do you sympathise with Henry at all?

We've just told our (only) DC26 that they have £300K to buy a property, outright. We can do it now, under the current rules, but if we wait until it's an inheritance, then HMRC will want 40%. Hopefully, we shan't regret this.

For some reason we still talk about people being rich at X income level instead of in wealth terms.

Yep

That that is why we are utterly utterly screwed. Henry will never outearn (even if he kept all his money with 0% tax) the current income house price gap

And that's the problem.

100% @hettie

For some reason we still talk about people being rich at X income level instead of in wealth terms.

I see so many people around me confused about how some of our peers have managed to buy really nice houses and/or are considering private schools when we all know what each other earns as salaries are in fixed bands in my firm... the answer is the age old story of family wealth!

I'm increasingly convinced that the last couple of generations were a historical blip, not the standard, and I shouldn't expect my own children to be able to hustle their way into a good income without support from me.

It's housing

Henry's 'problem' is far less to do with the tax rate issues that kick in at circa 100k ( he's single so not loosing childcare elements) but the complete uncoupling of housing costs with incomes (especially in London )... The graph is about ownership (from ONS) but the same applies to rents.
Henry doesn't feel rich because housing himself and saving for retirement now chews vastly more of his income than any time in the last 20 years.
Tax on income is a teeny tiny issue compared to the massive increase in asset values (investments and real estate). And as some on this thread have been honest enough to share if you inherit a house in the south east you are definitely winning the lottery of life as this will change your life circumstances at a scale that no amount of top 5% earning power will ever achieve. And you will literally have had to do nothing (accept be fortunate to have a parent who bought a house in the 80's or 90's and then unfortunately have them die). That that is why we are utterly utterly screwed. Henry will never outearn (even if he kept all his money with 0% tax) the current income house price gap

If somebody in top 4% earners in this country can't leave on his own in a small flat in the capital and still have some money for savings/entertainment, then something is broken in the system.

The point of the article is that the way the tax system works there isnt a huge amount of additional take home on a little over 100k to someone on 50k. And there is a risk if we are looking at a single parent with small children then they are actually worse off by the time they have a marginal tax rate of over 70% and lose their childcare hours.