Budget: 'I can't afford to leave home on £1,500 a month' and other claims.

[dessertz]

The BBC are focussing on a few brave volunteers to see how they will be impacted by the budget. Today's headline focuses on a 23 year old apprentice who is hoping for a rise in pay so he can leave home:
BBC News - Budget 2024: 'I can't afford to leave home on £1,500 a month' - BBC News
https://www.bbc.co.uk/news/articles/cwyv8y68e25o. Surely £1500 would be enough to afford a flatshare in Newbury? I mean, it might not stretch to a batchelor pad, but a flatshare should be affordable. It's more than most students live on at the same age. He is being paid reasonably for an entry-level job, and his pay will presumably go up when he qualifies.

The other one I didn't understand (in the same article) is the single mum earning £150k who thinks she is being punished for having children because she's earning too much to qualify for child benefit. 🤔

Hopefully the beeb just took their comments out of context. 🤷‍♀️

Rents have increased much faster than wages. So, sadly, it now takes a much higher proportion of take home pay to keep a roof over your head
That leaves less to pay for other necessary expenses. It's not rocket science.

Do we know whether the £1500 is net or gross?

Very unlikely to be net given the typical apprenticeship hourly rates.

At that income she pays about 58k in tax and national insurance each year. Quite reasonable to be pissed off about child care and benefits.

Someone earning 40k pays 7k tax and national insurance and someone earning 30k pays only 5k tax and national insurance.

Its why its mad to lose the high income earners to Dubai. Losing a 150k a year job to Dubai costs minimum of 58k lost tax (reality it is much higher) and to replace that lost tax needs 11 people earning 30k paying 5k a year.

However the government spends on average 17k per person per year (total spending is 1.2 trillion a year) so all those 11 people on 30k, paying 5k a year in tax don't actually help as they consume more government services than their taxes pay for. Income taxes are by far the biggest contributor to government revenues too so VAT is helpful but minor compared to income tax.

The UK is getting itself in a real mess losing the people who pay the big tax bills. Everyone else's taxes will have to rise a lot to cover for them leaving.

If she takes her £150k job to Dubai, her housing costs won’t be any lower, and the £2,800 she’s currently paying in childcare will be her bill for private schooling for the next 15 years plus. Then kids will have to pay foreign student fees at uni. Private health insurance bill will probably be a fortune too.

It’s net

This was my situation. I had to move 100 miles away. I went that far because for cheaper than a room in my hometown I could rent a one bedroom flat, although I then had to find bills on top and was totally broke. No monies for luxuries or socialising but did manage a car. Didn't see the point moaning about it though, just did what I had to do and made the best of it. I had to live somewhere and figured the best way of finding a partner (which apart from the fact I wanted one, meant someone to split the bills with) was if I was leading a fully independent life in a home of my own. Living in a flat share in my 30s seemed kind of sad and I thought it might put people off me. I miss my hometown but I don't regret my decision to leave, it was a necessary step to living a successful life, instead of being single and living in abject poverty in flat shares forever until I died.

A sensible budget is one third for living, one third saved, and one third on housing costs. You can't rent for £500 near Newbury.

Sorry but outside of these online sites where everyone claims to earn 100k it's pretty common for people to only have that much left over. Just a couple years ago I was paying that much rent while earning even less than him. Yes it was a squeeze but still doable.

I completely understand why a young single man would rather live with his parents then blow money on a house share with people he may not even like though

The article makes you wonder at the BBC's agenda. Out of all the single pensioners they could have chosen - and the majority in the UK are female, often after a working life where career opportunities and earning power have been compromised eg by pregnancy/child and family responsibilities/gender pay gap - they chose a male, ex army/navy, who identifies as a woman.

difference is you not saving when you were in your twenties likely meant you could still save later on and subsequently buy a house I.e the non saving years didn’t impact your ability to buy - it clearly would for this younger generation who in some cases will also being paying back their student loans

I agree that single parents are unfairly penalised by the current rules on earnings for Child Benefit, free hours etc., but the BBC article does state that the children’s father (quite rightly) contributes to the childcare costs. It doesn’t specify what proportion/amount he pays.

I’m a postgrad student, I get £1550 per month. I live in Leicestershire so not sure how that compares to Newbury, but on that money I can afford to pay rent and all my bills, 3-4 (budget) holidays per year, run a car, eat out 2-3 times a month and save about £300 per month. Currently live in a house share, but could probably live alone if I sacrificed some of the meals/holidays and saved less.
As a student I don’t pay any tax or council tax so that probably makes a difference. I’m also vegan so food bill is very cheap and don’t drink or do drugs. Also buy almost all clothes second hand.
Definitely possible to live off £1500 per month as a single person (outside of London/big cities) but it depends on your lifestyle.

What irritates me about BBC reports in general is that they always seem to try hard to include totally ridiculous situations in their reports. I've just read this one and can't understand why a person on a pension has a mortgage where payments are £800 per month. Just sell up and move to a cheaper or smaller property, for crying out loud.
Do you think that they actually seek the most ridiculous story to put in their reports? Often with little explanation of how the situation occurred.

Rents are quite a bit higher in Newbury because it's commutable to the bigger salaries of London.

I think the mother should mention how much maintenance her ex pays and people should remember that apprentices are a particular type of employee - for the older posters, he's on the equivalent of the YTS - and once he completes his apprenticeship, it's likely his earnings will increase significantly.

No YTS apprentice in the 1990s (or any other time) was renting or buying their own flat and running a car on £63 a week - not when you would get double that doing 30 hours waitressing, cleaning offices or from bar work.

My daughter takes home about £1500 a month and can't afford to move out. She's 24, she doesn't want a house share she wants a place to make her own and start her life. We can't find anything under £875 here for a studio. Flats, houses are over £1000. It means two thirds of her income would be just rent before all the other bills and food.

A working 24yo should be able to afford something that isn't a house share. As she says, she'd just be paying a lot more to still only have a room in a house like she has here. There isn't a lot of incentive. To share it would be between £700-800 for rent then the other bills on top.

Because she is earning a full time wage and doesn't have children she can't get any rent top ups.

Its what most people always did in their early twenties. Generally its a temporary situation as your wages can often quite rapidly increase at that age and within 3-4 years he could probably start saving a couple of hundred a month towards a flat deposit.
These days loads of young people seem to feel they only want to buy when they can afford a 3-bed house, i think its why so many struggle because they don't think its 'worth' buy a flat.
A colleague and his wife have been saving the best part of a decade. They have a combined income of 75k and could have bought 2 years ago if they would have considered flats but instead they complain about house prices. They are trying to skip a step on the ladder so yes it will be tough!

I couldn't afford to leave home until I was 29. I spent 13 years saving a third if my income, so I had a large deposit, which meant a smaller mortgage and I could afford the rest of my bills. DH left home at 26 after saving for a deposit.

DD was on £25k until last month, she said she could afford to live locally, but wants a few years of going out and on holiday before she settles down (wants a family). Also, wants some money behind her so spends £400 a month, £200 to us pays she'll buy extras for tea if she's cooking and currently saves the rest. One bed flats are £1k pm here , but obviously there are studios and house shares.

We didnt move out on 75k combined and in those days in london in 2019 you could rent a couples room for 800 quid (which is what we had at home). We only moved out when we bought, though admittedly that was a year after we hit 71k in secure roles. And I was on a visa so needed a larger deposit but for a brit in Newbury, a relatively small deposit is required

The housing in dubai is cheaper than London by few hundred pounds. If you pay equivalent, the standard in dubai is much higher than London.

Majority of companies provide private health insurance and its extensive. They want to attract good workforce so often offer amazing packages.

2600 in nursery fees is monthly cost. School in dubai cost £1.3k per year per child ! Nursery cost per year0 equivalent there would pay for private school. With her level she could go for a job that offers a package covering children's education.

Dubai doesn't charge income, property, or capital gains tax, and there's no VAT. Cars are cheaper, petrol is cheaper...

Most importantly Dubai is much safer than UK and reason alone why many people choose it.

There does seem to be more an expectation these days that young people won't have to live in house shares. And yes, when I first left home I lived a poverty-stricken life with not a penny spare, it wasn't an option for me to live with my parents so I just had to do it. Independence and learning to tolerate discomfort matter, as well as savings. (And no, this wasn't that long ago.) My kids will have a home with me as long as they want when they are grown, which is many years off, but I don't think it's optimal for them to move from the parental home only to go to a comfortable easy situation and I don't really get why people only expect to have to support themselves when it becomes easy.

My DS is an apprentice and we've similarly done the sums and concluded that whilst he could move out, it would be extremely difficult for him to do so.

Flatshare in a cheaper part of town with bills included is around £700, then he would have food on top. He also has a car, which I appreciate could be judged as a luxury, but we live in an area where public transport is not great, and insurance is hefty for young people. Then things like phone and gym membership (bog standard, not fancy ones). We/he did the sums and worked out he would have very little disposable income left and would be living in a less nice place than he currently does. No real incentive to do it. Even before you factor in that living at home gives him the chance to save for the future.

In my first job I was living in a cheap flat share and able to save most of my wage. no chance of that now.

He wont be rolling in it but yeah he can move out. Not if he has an expensive mobile or a several hundreds a month car finance deal but otherwise he can. I was on 1800 a month after tax in 2013 and my rent was 650. I was on my own so all bills were mine to pay and I did it. Food is a bit more these days but not that much more. I had a car as well. Couldn’t really save anything but it was doable.

They do - they will offer a mortgage until 75 if you are working at the time and the affordability calculation shows that your expected pension will meet the monthly repayments. DH is 55 and was looking into this regarding buying a student property for the DCs when they start uni next year. Was surprised too.