Falling Standard of Living

[fannyahnnie]

Would people agree that they’ve seen a fall in their standard of living especially over the last 15 years or so?

The cost of living in the UK has become so expensive, even compared to other countries I’ve lived in. This means the standard of living has fallen. I really feel for young people in the UK.

My husband and I are both teachers. We managed to buy a 4 bedroom family home in a nice area of town. My parents were also both teachers and they could afford a 5 bedroom family home in a desirable part of town, a holiday home, boarding school for my brother. All of this on a teacher’s salary.

My daughter is a doctor and her husband is a lawyer. All they can afford is a 2 bedroom flat and a much lower standard of living.

How on earth people are surviving I don’t know.

No, mine has stayed the same thank fully.

Glad you’re doing ok, good to know not everyone is suffering

No, because we have had good increases in income (DH from moving up in his law firm, me by leaving the public sector and becoming freelance.) However, if we were on fixed salaries or public sector-style points increases the difference would be enormous. Friends in some public sector professions in particular (especially doctors) are really feeling it.

I qualified into my profession in 2004 on 35K, which was a really good wage. I easily bought a nice terraced house in a pleasant city. A newly qualified person would now join on 42k. In the same time the NQ salaries in DH’s law firm have almost doubled. It’s crazy.

Hmm, not sure that stacks up that your parents had a large expensive house, holiday home (assuming you mean a proper second home not a caravan or chalet) and private school. Teachers have never been high earners surely?! I'd assume they had inheritance or gift from family

No. Life is a breeze for us compared to 15 years ago.

I wouldn't like to be starting out now though and glad we'll be able to help our kids out more than our parents were able to / or willing to in dh's family's case.

There has been an overall drop in standard of living, yes.

But on a personal level, I am so grateful for my little flat and the life I have built for myself. Especially as a single woman living in one of the most expensive cities in the world (London). It hasn’t been easy!

My parents were much better off at my age, but so what? I’m very happy.

I know it’s a cliché but comparison really is the thief of joy.

No, we are fine. Did your parents buy a five bedroom house in their twenties?

Most previous generations worked their way up. Getting promotions, changing jobs, working your way up the ladder. My parents started out living with grandparents. We started out in a 1 bedroom flat. Everyone I know did the same. All ended up in nice 5 bedroom houses. All professionals.

Mine has dropped but I have a 15yo ds and I'm paying school fees so it would be a miracle if my lifestyle hadn't reduced. Only 2.5 years to go 🤗

@KnittedCardi is right. I started out with a truly grotty flat and renovated my way upwards. Now a 4 bed house and school fees but it's taken me 30 years.

Yes - earning a fraction of my former earnings and paying half of it to a private landlord. It's tough for young people without parental input and there are no second chances for those floored by divorce, illness, redundancy, caring for elderly/sick parents etc.

Personally we're better riff than we were 15 years ago due to promotions etc. But I think it's much harder for young people now.

We didn't get any help buying our first flat but we'll need to help DS onto the property ladder as otherwise he wouldn't be able to do it even with a partner.

Statistically yes due to lack of wage growth.

30k in the early 00s is the same as 53k ish now, many jobs haven't increased that much.

Add in house prices vs salary & it's harder

Most previous generations worked their way up. Getting promotions, changing jobs, working your way up the ladder. My parents started out living with grandparents. We started out in a 1 bedroom flat. Everyone I know did the same. All ended up in nice 5 bedroom houses. All professionals.

But the issue is the "ladder" doesn't really exist

Now due to age of FTBs, the bottom rung is often expensive, harder to build equity & moving is £££

I’ll never achieve the lifestyle my (actually-not-that-successful) boomer parents did. They bought three houses (one on a gold amex card), put two kids through private school and afforded a primary residence in a leafy north london enclave that I can only dream of. Sucks to be me.

The scary thing is that it is the professions that society needs most (education, caring, nursing and other health roles) have been hit the most by the failure of wages to keep up with inflation. This is really hitting key services as people on these roles move to more lucrative roles or emigrate to get better salaries. We will all suffer becuase of this, even the posters above who feel they have not experienced any direct impact.

DH and I have kept our monthly rent/mortgage payments the same since we were students in 2002-2006. We've totally avoided lifestyle creep. We have no kids. We own our vehicles outright. We don't spend much on commuting etc. So basically all of our outgoings have remained static for nearly 20 years.
In that time Ive gone from earning about £10k a year as a student, to £17k in my first job out of uni in 2006, right up to the £70k that Im on now.
I honestly can't believe how simple and dead average my lifestyle looks considering my salary. Sure, partly because I'm a simple creature with simple tastes and I put a fair amount in savings. But for my aunties/uncles/family friends, this level of income back in the 90s made them look seriously wealthy. It looked like private school for the kids, golf club membership, nice cars and a holiday home.
Whereas there isnt much of a gulf between my lifestyle and that of my working class parents who have each only earnt a maximum salary at their peak of £24k (mum) and £30k (dad), but have retired on final salary pensions.

Yes it's lack of wage growth. I bought my first house a decent sized two bed it was 28k and 0% deposit. Dh and I earned around 15k each (so jointly about 30k) Our mortgage was less than £300 a month.

My dd and her partner earn about 50k between them. . A two bed house in our area is 200k and a min 20k deposit. A mortgage will be around £1200 a month

So 4x my equvilant wage yet there earnings are less than 2x mine were.

Same here. My lifestyle probably peaked around 10 years ago. Yes I could probably afford the treats that I bought without a second thought years back, but I just do without tbh. There's too much greedflation about.

Yes. I was on £48k in 2018 as a single professional in the public sector with no kids, and could afford to go skiing once a year, buy new clothes regularly, eat out regularly, go to the theatre, shop in M&S, buy a bike etc. That was all while paying off my student loan as well and enduring London rents (I shared a flat at the time).

According to inflation calculators like this one I'd have to be on £60k now to match what the £48k would have bought me in 2018. I'm not on £60k though because I'm still in the same job and pay rises in my area of work have been barely non-existent.

Despite having paid off my student loan since, I now can't afford fancyish holidays abroad anymore, mostly shop on Vinted, am generally watching the pennies and have moved out of London to try and save. Definitely no more theatre trips or big outlays on technology etc.

I think something that isn't talked about enough is the fact that professionals especially in London are coupling up later and later, meaning they have less time to save up for a deposit together/ get on the short ladder that's remaining before they want a family home. Older couples keen to start a family mean they're not looking for doer-uppers or tiny flats, they want to move into a decent-sized house and with them both working full-time in stressful jobs/working around limited childcare they don't have time for massive refurbs.

So we're worse off than our parents and in some cases worse off than our grandparents. At least I'm not down the mines and in the mills while in a tiny two-up two-down cottage like my great-grandparents, I guess :(

People conflate their personal circumstances with the median. I'm doing much better than I was 20 years ago, but that's due to promotion.

The stats, however, are pretty clear. It's not really a UK-specific problem, more a European one - we have low growth, and most of that growth comes from immigration-driven population increase. So real-wage growth is low.

In the 80s-90s our real-wage growth was pretty high, but it's been effectively stagnant for 20 years.

This contrasts heavily with the US, who not only started richer than us, but have consistently grown more, and have continued to have real-wage growth post-financial crash.

Fundamentally, this is a productivity story. We (in the UK) simply don't want to do the things that make them (the US) so productive. Productivity drives what people earn - it is the measure of what we produce per hour worked. The US is getting more productive, we much less so.

So now we are in a situation where US grads in many fields routinely earn 6-figures, whilst grad starting salaries over here remain 25-30k in most areas.

We're simply not prepared to do what we need to do to be richer. Simple as that. Another version of the same story is our ridiculous housing market, which hurts us in so many ways, and we simply refuse to deal with it.

So we putter along.

@Dissimilitude what do we need to do as a country to be productive?

We currently spend more than we earn, and we can’t afford the lifestyle we desire. 32yo, graduates, professional jobs, mortgage, kids, household income £70k. It’s really not great, but I’ve got to take responsibility for it. I know we could earn a great deal more, in different careers, but we like our jobs (creative and education).

I have cousins, early 20s, with no degrees, mediocre schooling, and they’re earning more than us as retail managers having started as a Saturday girl.

I was a ‘high flier’ at school and uni apparently - I do feel that I’ve gone very wrong somewhere and would love to afford a better lifestyle.

I think something that isn't talked about enough is the fact that professionals especially in London are coupling up later and later, meaning they have less time to save up for a deposit together/ get on the short ladder that's remaining before they want a family home. Older couples keen to start a family mean they're not looking for doer-uppers or tiny flats, they want to move into a decent-sized house and with them both working full-time in stressful jobs/working around limited childcare they don't have time for massive refurbs.

yes, you often see the “ftbs want more these days”. logically a 33 yr old FTB is going to have different requirements vs one a decade younger.