Would you class this family as average, comfortable or well off?

[Greyorcream]

Curious what people would class as “well off” these days?

Couple in late 30s with 2 dc (late primary/early secondary age). Not in London.
Partner A earns £52k and Partner B earns £74k. So fairly average wage. Neither majorly stressful roles. Both work full time. Home by 5 each evening. Both can wfh 2 days a week.

Both get annual bonuses of around 8% and usually salary increases of about 4% each year.

Mortgage outstanding is £339k on a house worth around £500k (5-bedroom house).

Pension contributions (employee + employer combined):

• Partner A: 17% (this will be increasing)
• Partner B: 21%

Savings:
usually save a third of income each month.

• £130k joint savings
• £40k saved separately for the dc.

No inheritance or family help received. No loans, car finance, credit card debt or student loans.
No childcare or private school costs.
Lifestyle-wise, usually one big family holiday a year plus a couple of weekends away.

Would you consider this comfortably well off, average, affluent, or something else? Genuinely interested as perceptions seem wildly different depending on area and social circle.

They are comfortable but might be wise to use about £75k of their savings to reduce the mortgage

@Greyorcream if your mum did childcare for you, "family help" was very much "received". And if your dad thinks this is an average financial set up, it seems likely he's very rich and long has been, and therefore that you come from a rich background. Which will have helped in all sorts of ways too.

You're rich, which is great, congrats to you, but give your head a wobble - anyone thinking you're "average" is either not that bright or desperately badly educated.

Yes I realised that, but mine is £166 a month for 5 years (corrected from 4 I realise) for a very low paid, mostly part time period of my life. So I’m surprised by the figure.

TPS accrual rate is 1.75% so it works out at an average salary of about £26k a year. That is low for a teacher, you're right.

Depends on what lifestyle you want to live.

if earn £100k but think you deserve a £110k lifestyle you will feel poor and miserable.

if you earn £40k but can be happy living a £36k you’ll think yourself well off.

For me on £31k and 41k. If i was on those figures with bonuses plus those savings i’d feel well off. But it’s subjective to lifestyles and expectations isn’t it. Although lots of people on here think they are on average wages when they are clearly not!

This isn't necessarily true at all.
I have consistently earned more in savings than my mortgage for the past several years.

Well it sounds like you’re in the worst house on the best street, which is recommended over being in the best house on the worst street. Unless you mean all your friends are millionaires?

Round here (commuter belt countryside) a 5 bed home is easily double @Greyorcream ‘s house, so I dare say those salaries are decent enough in the area she lives in, but wouldn’t go far round here.

these threads are like the MN chicken, everyone coming on to have a pop at someone for bragging they can afford literally anything, or those with private islands saying their cleaner earns more

@Greyorcream comparison is the thief of joy, your salary/work life balance set up sounds perfect. Be happy with your life and stop worrying about others have/have not.

I think it depends how you read the figures.

Glass half full : £500k house, £170k savings - sounds very well off

But if you ploughed your savings into the mortgage you could view it like this :

Glass half empty : £169k mortgage, NO savings.

And that looks entirely different to me. The biggest mortgage I've ever had is £162k, and that was after a costly divorce. My mortgage now is £23k and I have significant savings. The only reason I haven't paid the mortgage off, is because it's fixed at 1.54%, so it makes no sense when I can earn 4% on savings.

Or another way of looking at it, is what are you worth if you sold everything - you are worth £331k.

You would be surprised. We have a colleague still teaching at 72! And many many over 60 as it's not really a good pension until you are nearer state pension age. I believe this changed around 2017 and it was previously better.

We met at work, or through interest groups/hobbies, down the pub or at gigs or through mutual friends. I guess like attracts like, but I don’t think my salary is particularly rubbish compared to other people I come across in my day-to-day life. I also have friends who are illustrators, musicians, one is a freelance researcher. My wages are on a par with theirs. I have no idea what wages in the private sector are like. I do have one friend who earns a massive wage, but he’s a quant.

Genuinely sorry to hear that, with the amount of crap teachers put up with I did assume they at least had a comfortable retirement to look forward to!

'Comfortable' because they have a secure job, don't have to worry about paying for the basics, they have a home, pension and savings.

Certainly not 'average' but nowhere near 'wealthy'.

As much as I love my job I am keen to be out the door well before 72. Many retire and do supply to top up the pension now. I guess it will be the same in other sectors.

Which subsidised bills are available to those who don't work? Because I don't and last time I checked I wasn't getting any discounts for my mortgage, council tax, utilities, insurances, fuel, food, clothing etc?

985 would be ok on top of state pension if she wasn't renting as it is she has £135 a month above state pension after rent, which is not a lot extra
I would suggest that they try and stack cash away as much cash as possible in savings for next 6 years and add it to lump sum so there is a pot for holidays etc maybe a new to her car at some stage

The median wage is around £31,000 pa so I'm not sure what you are asking for-the figures you give are obviously well above average.

Tbh I'd find it a bit odd that a couple on over £120k a year collectively and approaching 40 would only have built up a little over £150k in home equity... But then I saw you have 130k savings. Whether this is a good decision depends if the savings are at a higher rate of interest than the mortgage interest rate - if they aren't, get some money paid off the mortgage, as you are still at nearly 3x income in mortgage borrowing. Personally I'd want to be getting a bit more paid off the mortgage.

Your situation interests me as you aren't wildly off my own family (our income is a bit higher) but we've obviously prioritised different things as we've opted for lower savings (perhaps a little over half the OP's) but been overpaying the mortgage instead so our mortgage borrowing total is barely 1/3 of our annual income. I'd describe us as comfortable.

That's an interesting way to look at it. We have very little in terms of savings but like you we have a lot more equity in the house from overpaying and buying young. However that said I would like to save more.

Perhaps being a supervisor doesn't allow any time for gaining knowledge of the world around you

We have a colleague still teaching at 72! And many many over 60 as it's not really a good pension until you are nearer state pension age. I believe this changed around 2017 and it was previously better.

The average teacher retirement age is 55-60 although this will increase going forward as this system is less generous to newer entrants (like most pension schemes these days). It’s still a very good scheme.

wrong threads

Average long term increase on S&S is typically 7% so considerably higher than interest rates for the past 20 years. Since the OP is in her late 30s she's always been in a position of mortgage rates being lower than a S&S ISA. I know MN is obsessed with paying off mortgages but really spare money should be allocated to it last after 1) pension (tax relief always makes this the best savings option because you get 20 or 40% more money immediately but 7% S&S growth year on year). Historically there could be an argument that if you died young you wouldn't see a benefit but since your children can inherit any DC pension it makes more sense than it did historically 2) S&S tracker ISA (assumption is 7% growth pa, tracker ensures low charges) 3) depending on the current market bonds or mortgage or high interest cash savings. But it's all about the percentage rates. Mortgages, despite all the fuss are still at a historically low level and so you can get better savings rates so that makes more sense.