AIBU - We’re struggling to get by on £200,000 a year

[BreakingDad77]

next.ft.com/content/d6f1e58e-20c9-11e6-aa98-db1e01fabc0c

Just actually gobsmacked by her comments -

“In theory, with our household income, we are in the top 5 per cent of the UK population and yet it does not feel that way,” she says. “If you’re earning millions of pounds, then you’re OK — and at the other end of the spectrum you get everything paid for. We are caught in the middle where we are paying for everything.”

Yeah because you know those on benefits get such a cushy deal...WTAF

Just all feeds into why UK is one of the mist unequal countries in Europe.

Its ironic as with the EU ref Brexiters going on about how all the other EU countries are crap and yet we have some much bigger problems closer to home.

Makes me think of Whatshername who used to write in the Mail on Sunday about how broke she was - and that her 'essentials' included Jo Malone candles at £50 a pop.

This is 'click bait' stuff - people love getting outraged about other people with more money than sense.

I am on £200k a year in south London. I would never suggest that I am impoverished, but it is nothing exceptional.

A double-earning couple with 2 children each on £40k a year (£100k total) gets £62,500 after tax, NI and adding child benefit.
A single earner with 2 children on £200k a year gets £116,500 after tax and NI (no child benefit entitlement).

So a £120k difference pre-tax reduces to a £54,000 post-tax.

I am certain that financially we would be much better off if we lived in say York or Harrogate with each of us earning £40k than we do living in London with one of us earning £200k, given the house prices in London.

London is unaffordable now if you are both in early thirties and want to raise a family unless either (i) you get a big dollop of cash from your parents or (ii) you are taking home at least £75k after tax between you .

Oh my fucking heart bleeds! I don't get 10% of that coming in and I cope - not comfortably, but I cope. This is just insulting to those people who really are squeezed in the middle. I'm not one to wish ill on people but it would do this woman good to try living in the real world for a while. She might suddenly realise how fortunate she is.

If you have 20k you struggle but could easily live on 40k If you have 40k you struggle but you could easily live on £60k, and so it goes on. The problem is, those on 60k don't live in the same houses with the same cars as those on 20k. As you earn more, you jump a level of house, car, holiday, and you do it incrementally. If 60k suddenly becomes 20k, it is actually difficult because to sell the house isn't as easy as it might seem, so the £800 mortgage still has to be paid.

We aren't struggling by any stretch of the imagination. But I have noticed the budget doesn't stretch as far as it used to, and "we can't really afford it" is creeping back into our vocab. And we look at what we jointly earn and wonder how it can be that the two of us, one higher rate taxpayer and one normal rate, but above average salary, living a relatively frugal life day to day, can be as cash poor. And I use that term relatively, we are not going without what we need. I just would never have thought it would be necessary to have to watch the pennies earning what we do, back when I was earning my first paycheque. What we earn now seemed like it would be much easier than it actually is.

I would never do anything so crass as to complain about our situation, we are in a much better situation than many people, but I just wanted to point out that looking at those with more money than you and assuming problems are all down to poor financial management isn't always accurate.

It's always hard to make comparisons. I used to pay 12% mortgage interest on a repayment mortgage and today people are paying 3%. Our full time childcare was 50% of each of our net salaries at one point. Life has always been pretty hard for most of us and will always be so.

Most of us in careers where earnings rise (and this lady chose IT marketing I think it was, not a good profession so obviously suffers for her poor choice) tend to move to bigger houses as children come along and spend a bit more and need more childcare (we had 3 under 5 at one point and both worked full time so that's a lot of childcare to fund). So your spending tends to rise as you get better off and of course we're really lucky that that is so so it never helps for these kinds of earners to moan. If you go to the newspapers you get what you deserve as they often warp what is said. She must have expected it.

I'm going to put myself in the firing line here, dons tin hat...

DH and I earn about 200k combined.

I run my own consultancy firm, he works for a bank. We live in a not posh London suburb.

Nursery fees for two are £2700 a month plus wrap around care if we are delayed. Travel is £400 a month. Mortgage is £1750 a month. Add on council tax, heating, food and general substance. We're spending £5k a month just to get by.

We get no help via tax credits and most of our salary hits the 40% tax bracket. So take the 200k, almost half it, and then remove our outgoings.

We both work a 60+ hour week plus a commute. We drive a small hatchback. We have a nice house, but we are both working our arses off for it. It's our choice, it will pay in the end. But right now, after getting up at 3am this morning to do overtime (albeit from home) I can understand having a moan about trying to better yourself but being stretched. I'm not rich, far from it. People think I am.

I can't complain, it's a lifestyle choice. I grew up on benefits and free school meals, I chose this path. You don't get this kind of salary for 9-5, I work 24/7 to get this. But...it's my choice. Would you want my life?

ivebeentomars was just about to post the same thing. People earning 100kish jobs tend not to work hours that will even fit into after school clubs, as one pp helpfully suggested (as if working parents haven't thought of that). Hours are very often long (10-14 hour days), unsocial, and unpredictable. I have no idea how you manage with nursery care - the latest opening nursery round where I live shuts at 6. The only childcare option for most people I know who work these kind of hours (assuming you don't have handy relatives nearby, which most don't) is a nanny, which is £40k+ all in, from after tax income.

But you ARE rich. I get that you don't feel rich, day to day. But you are. Rich doesn't mean private jets and unlimited spending , it means a nice home, holidays, no panic at an unexpected bill. And I don't think life IS hard for all of us - it's not hard for us financially on considerably less. I read a piece the other day that said peoplein the same circumstances are happier when they consider themselves fortunate rather than hard done by. Interesting.

According to HMRC their income is actually in the top 99th percentile, not just the top five. I used to be on an income slightly in excess of that of the featured household, and it was NOT a financial struggle, even with one kid at private school, no child benefit, and hefty pension contributions. However, we didn't eat out, didn't have fancy holidays, and ran an old car. Also, we bought our house 20 years ago, so have paid off the mortgage. Our priorities were childcare costs (about £40,000 p.a. after tax, for three kids - two at state primary), paying off debt, and saving. In consequence I could afford to retire early, and the youngest kids have remained at state schools.

So it's a question of choices. The point of the article is that the traditional middle class - lawyers, doctors & other professionals - can no longer afford all the paraphernalia they consider their income and standing entitles them to. It's been an old news item for years that private education is moving beyond the reach of the traditional middle class (to single out one expensive choice).

The societal interest in the story is that the traditional middle class has always been considered the bedrock of an advanced, progressive and financially well developed society, and there is a concern (perhaps only philosophical) that the erosion of the middle class will lead to - or is a sign of - economic erosion, and a return to the world of some very rich folks, and millions of poor. That is not generally thought to be a good idea.

However, with the exception of private education, where fee increases have always outpaced inflation (something to do with parents wanting 'state-of-the-art' facilities perhaps) it seems to me that the impoverishment of the middle class has more to do with the greater availability of luxury goods and services (fancy cars, fancy holidays, ridiculous kitchens) which means a 'middle class income' has to (its recipients would like it to) stretch even further. But these are choices.

I bet that Egosumquisum does not live in London as a parent in her 30s with two pre-school age children, working in a 55+ hour a week job without childcare/financial support from parents or an older/higher-earning spouse.

My sister and her husband are each on £45-50k base. They can each get up to £20k extra in overtime, which involves doing night/weekend shifts for a week of approximately 55-60 hours each. They pay £30k per year to rent a three bed terraced house in Zone 3 of London. They pay £32k per year for a nanny who works 12 hours per day Monday to Friday - if they put the children in daycare it would cost more. They don't have a car, they work anti-social hours and their place of work is in Zone 2 so it makes sense to live in Zone 3 b/c they have no commuting costs even though the rent is high. Assuming they make zero pension contributions, they have about £90k after tax (thats at max overtime, i.e. 55-60 hours EACH a week) and after rent and nanny they have £28k left to cover bills, food, etc. They don't get any tax credits, council tax benefit, child benefit, etc. Fortunately, they don't have student loans to pay off - if they did that would take a good chunk of that £28k.

People like Egosumquisum who go f this and f that don't have a clue that in London unless you go full on welfare case people in the category I described in the first para of this post have no option to downsize. There aren't any longer any dodgy areas you can move for lower rents and if you move out of London the extra cost of commuting and extra cost of childcare to cover the commuting time offsets the lower rent/mortgage, in particular if both parents are working.

egosumquisum that's easy for you to "bet" but I am not so sure.

Many simply do not work those kind of hours, or have the ability to WFH or work flexibly, or their job is portable and they can move anywhere in the country once they have kids.
Some couples have SAHMs or families nearby who help with childcare.
Some inherited houses or flats or social housing so never had to mortgage themselves up to the hilt (or pay steep rent for a place big enough for a family). Some people get key worker housing, or housing attached to a job in some other way (like living above a pub or a shop).

You cannot generalise like that. Everyone's circumstances are individual to them. Some people on apparently high incomes not only end up paying the highest effective marginal tax rate in Europe but also have to pay hefty maintenance to ex partners, or repay medical school debts, or pay for elderly care, or vast childcare costs, or all kinds of other things which mean that their standard of living is comparable or even lower than a family on a lower income.

Why on earth would someone with 28grand disposable income think they should get tax credits.

Someone who thinks they have "only" 28 grand disposable income has truly lost sight of how most people live.

Most people earn less than that and still have to pay housing, bills etc!!!!

£200K is comfortably top 1 percent, not 5 percent. £700K house not expensive for a couple in that earnings bracket. School fees for one four year old: their choice, but still not much of a dent in their income. Not getting where she's feeling squeezed.

You can go the DoE website and see the average salary for teaching staff at any school in London. In my children's primary school it's about £45k. That's the average. I'm not talking about starting salaries - I'm talking about what people are earning in their 30s, maybe 6-12 years into their careers. I know a number of teachers and they can manage okay. What you're ignoring is that the hours/holiday schedule a teacher has has a huge impact on childcare and childcare costs. The shorter hours/longer holidays/or at least the greater flexibility outside of regular school hours is worth a big chunk of a pre-tax salary.

I'm sure that there would be some people on this website who would love to have £28k left over or a family of four after rent/childcare costs every year. But it's not exactly amazing money - certainly not the sort of money that leaves you much of anything to save as a deposit to actually buy anywhere in London (or even much of the rest of the U.K.). And as a reminder - to get that £28k my sister and brother-in-law each work 55-60 hours a week (and spent six years studying before they earned anything at all).

To go back to teachers, in London you have the following:

• Teachers who have a significantly higher-earning spouse and so have enough family income (and the shorter hours work re childcare)
• Teachers in their 40s and 50s who bought/traded up before house prices in London soared over the past five years (often who bought as much as 20 years ago)
• Teachers in their 20s/early 30s without children who are in houseshares and living in London for the experience/lifestyle

As I said in my previous post, a parent in London in her 30s with two pre-school age children, working in a 55+ hour a week job without childcare/financial support from parents or an older/higher-earning spouse is screwed unless salary is high.

Quite a lot of people who post here from outside London don't realise the extent to which the taxes of those of us in London subsidise those in the rest of the U.K.

"maintenance to ex partners": What's this got to do with people's costs? We already have a welfare/tax system that penalises couples for staying together and which has resulted in a vast chunk of English working class men dumping responsibility for their children's welfare onto the taxpayer.

Quite a lot of people who post here from outside London don't realise the extent to which the taxes of those of us in London subsidise those in the rest of the UK,

How are Londoners subsidising me?

Ivebeento, yes but I don't think those of us who work like that can expect other people to understand. Lots of people wouldn't like my life when I had small children either or understand working through the night all night without a break or overtime. My daughter worked 40 hours over a Christmas with no sleep or breaks and no overtime one year. One hopes it pays off later (and in my case it has and my children leave school next year so it all comes good).

200k is top 1% for those of us who declare it. What about those who don't?

Offshore accounts anyone?

I am in that 1% bracket and pay my taxes accordingly. There are many who don't.

It is shameful that the the real rich in this country may well not be declaring their income correctly. Therefore those on lower incomes but not entitled to subsidies are paying more in (percentage based) than those huge earners.

I'm lucky, I worked hard and it paid off. But I do feel aggrieved that there is a huge disparity in what hard working, honest people put in (whatever income bracket) and what the 'elite' contribute.

I could open an offshore private account, but I have a moral compass that says no. I do feel that I subsidise others and have no issue with that. I just hope my contribution is properly spent, though I doubt it under the current government.

We are in the squeezed middle, with a mortgage that we got on the basis of two full time salaries, followed by 10 years of maternity leave and part-time self-employment on my part. So we look richer than we are because we have a reasonably nice house, but we are actually pretty broke and not eligible for any benefits. Husband just got a promotion which meant we no longer get tax credits ie basically no financial gain from the promotion.

A double-earning couple with 2 children each on £40k a year (£100k total) gets £62,500 after tax, NI and adding child benefit.
A single earner with 2 children on £200k a year gets £116,500 after tax and NI (no child benefit entitlement

Hmmm - but don't the double earning couple have to pay for childcare? Whilst the single earner family has a SAHP? Allow for that and the difference bumps right up.