To think £100k pa is NOT 'the squeezed middle'?

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The article is very confidently attributing the definition to Danny Dorling, but did he really name this figure?!

These women are fools.

Taken across the six adults and 5 dependent children in our family - total UK visible income is 128K

Taking the mean across adults puts us at about 21K per head. I'm sure many families work in a similar way - the earners share their money and the non-earners share their time.

Focussing on DH being a top 1% earner loses the fact that that figure will include very many people who do not or cannot earn.

Where does 100K fit in for full time workers aged between 30 and 50?

It depends if you live in London or similar and when/if you bought your house. Because of the cost of a house, people spend much more of their income on their mortgage then elsewhere. If you bought it when house prices were at their peak this can be three or four times more costly than a decade previously.

Ruby I'm with you there. I feel fortunate that I can spend time after school with my small children and also that, having moved out of London, we can live the life we live on the lowish wage we currently have.

But that 128K hides the fact that two out of the three households do not pay for housing, and SIL benefits from around 30K non-UK income.

What I'm getting at is that if a niece of mine moving to London told me that she'd be perfectly comfortable on a median UK/London income - I'd urge to be wary - and to consider what is not included in that figure (i.e. cash-equivalent of free housing, non-UK income and non-declared income). These three items together would, IMO, significantly raise the median income. Sweeping this under the carpet is unfair towards young people seeking to make well informed decisions about their future.

Other things can be very expensive in London too. Commuting costs have gone up quite a bit.

If you live somewhere where you can have a short easy commute to work, maybe live in a nice people friendly sized town, you could have a very lovely life on that money. You could probably live in a nice sized detached or semi detached house whereas you'd be living in a flat or if a house far enough for a tough commute if working in London.

That table is bizarre - earning £153,000 as a couple with two children means you are super-rich (top 1%), really????

But that is precisely the point charley

What I'm getting at is that if a niece of mine moving to London told me that she'd be perfectly comfortable on a median UK/London income - I'd urge to be wary - and to consider what is not included in that figure (i.e. cash-equivalent of free housing, non-UK income and non-declared income). These three items together would, IMO, significantly raise the median income. Sweeping this under the carpet is unfair towards young people seeking to make well informed decisions about their future.

Not many people have £30k extra income being remitted from overseas Matron

No - the point is that puts you top 1% of declared income.

Being rich - IMO - is about assets not income.

No - but plenty of people work cash-in-hand which is much the same thing.

At 153K a year you should only be able to borrow about 520k for a mortgage.

So maximum 1% of people have a mortgage over 500k.

Anyone genuinely interested in the contents of the book can get a good flavor from his youtube videos, extrapolating from that dire daily mail drivel will give you no insight whatsoever

Being rich - IMO - is about assets not income.

Rich is an emotive word.

Spending power (and borrowing ability) is about income.

No - but plenty of people work cash-in-hand which is much the same thing.

Really? How many? They can't be in the upper echelons of earnings.

And plenty of the low-paid London workers have no illusions about using it to leverage any kind of reasonable London lifestyle. Polish builders being a case in point - guys we worked with shared 6 to a flat, stayed 3 months working 12 hour days, then went back to their families. I reckon they were being paid equivalent of about 20K pa each, and the foreman ran the flat so that their expenses were very low, which worked well for them. That's not the same thing as arriving alone in London and wanting to settle comfortably long term.

Arsenic spending power is the balance between income and essential expenditure.

The cash in hand thing - an accountant earning 100K will typically have all of their income declared. But when we talk about 24K being the median - a builder will earn 20-40K - and will often have a sizeable slice on top of that. A waitress will earn 16K but will not declare tips. A physio or trainer will take on private clients in the evening. A teacher will tutor. Cash in hand will skew the picture in that median zone. Most people I know in London earning between 20-40K have a substantial extra 'twilight' job.

(Nanny and childminder - never had a receipt from either... second hand furniture shop knocks 10% off to pay cash... cleaner took cash-no-receipt ... I interviewed one Nanny who was very open about being paid 16 hours above board to square with tax credits - and the rest under the table to save on tax ... are tax credits counted in median income... )

Point being - we can comfortably argue from the position of being established adults - but the figures are misleading for a young person making plans.

My point, being that over-taxing 'the rich' to give to 'the poor' will not work in the long-run - 'the rich' will simply work less, meaning that there will be less tax to distribute to 'the poor', ad infinitum until everyone is 'the poor'.

But nobody on the thread has proposed anything of the sort Charley

The concern (surely) should be that living costs (esp housing) are now utterly unaffordable if even the top 5% are struggling.

Something needs to change. But redistributing existing income via tax (even if desirable) wouldn't address this problem, because incomes v living costs are just insufficient already. That's what the story illustrates.

Similarly, it hasn't been suggested that striving is a bad idea or undesirable, but what we are seeing is that even the most successful 'strivers' (top 5%) are having to make hard choices and can't afford a full range of 'upper MC' lifestyle items.

So striving alone, working as hard as you possibly can, is not, for most people, going to be enough to secure a 'good' standard of living.

My objection to the use of the term 'middle' for the top 1 to 5% (the point of the thread) is that it disguises just how broken the economy is.

And that is what needs revaling and addressing.

^revealing

Squeeze them more I say, much more. If 100k is not enough to live on then they are obviously too fat and greedy and need to go on a strict diet.

The only thing that would even things up properly is to narrow income scales to between 20k - 60k or thereabouts. Nobody pays tax. Nobody gets benefits. All profits from all companies go to improving life for everyone. Scrap private education. Scrap private healthcare. Scrap the Royal family. Improve public services for everyone. Everyone will be much happier and less me me me. Anyone that doesn't like it can bug off and live somewhere else where the poor get trampled.

Matron there are approx 4 million self-employed individuals in the UK.

I'm one of them.

I assure you that in my line of work there is absolutely no scope for cash-in-hand shenanigans, even if I was so inclined.

So let's be really really conservative and say only half of S/E people play it completely straight with their tax affairs (either due to honesty or necessity). That leaves a maximum of 2 million people who might be slipping some untaxed income through. And presumably that will be the smaller portion of their income (to avoid detection).

It's a minority, any way you slice it.

Yes - so taxation needs to be rebalanced towards assets - rather than sticking to the dogma that the top income tax payers should absorb the shortfall. BTL-ers have had an advantageous ride through the tax system - and they rob us thrice. Once though getting an unearned income via high house prices, twice through raising the housing benefit bill to meet rising rental costs and thrice through making decent lifestyles unaffordable.

If we are talking fairness - DH went in one generation to being bottom 5% income (ie his parents) to top 1% income (his current job after long training). That just doesn't happen with assets - homes and land are passed down through families keeping rich people rich regardless of their effort or contribution. I am baffled why people are so squeamish about inheritance tax. Surely the day after you die is to most fitting and convenient point to make a substantial contribution to the costs of healthcare and the next generation of children...?

Partymatron, surely you are being disingenuous with that laughably simplistic argument illustrated by the school grade story?
The choice is not socialism or feudalism, it should be possible to have an economic system which provides enough incentives but doesn't lead to a damaging degree of inequality ?

BTL-ers have had an advantageous ride through the tax system - and they rob us thrice. Once though getting an unearned income via high house prices, twice through raising the housing benefit bill to meet rising rental costs and thrice through making decent lifestyles unaffordable.

Amen to that.