6 figure incomes and can't afford a load of bread?

[LemonyFresh]

Is it just me or has there been a influx of posts about household incomes of over 100k or similar and complaining or wondering how they're skint at the end of the month and struggling? Is it a stealth boast or do these people actually struggle?

Am I really in the minority with a household income of less than half of this?!

I know we tend to spend to our means but even when DP and I are having a flush month I don't see the point in over spending for the sake of it.

I am surprised that anyone gets significant family help these days with childcare. Most people I know who are grandparents, are working full time themselves. Yes they babysit so parents can go out as a couple, or if they are ill, but they can't provide childcare for work.
What is more common for those on lower incomes, is for one partner to only work part time, as they simply can't afford the childcare.
However for most families, childcare costs are only very high for a relatively small number of years. Once kids start school, things get easier.

Tinkly it's a full time salary....and most people with that as a full time salary would get much less after tax!
I find this thread really distasteful and so far from reality it's painful.

The median household income in London is £39,100. So half of households in London have less income than that. Only about 22% of households in London are in social housing. So most people in London manage to live on far less than £100k in housing that is not social housing.
So paying a large mortgage in London is a choice.

Your conclusion doesn't at all follow from what you wrote. The reason for this low median figure compared to current average house price is that lots of the people living in London have had the opportunity to acquire housing there at much cheaper prices than it costs now. If you were to take away those people, the figure would inevitably be different because people on lower and middle incomes are getting priced out of London. This is already happening.

If you're younger than 35ish, unless you have free accommodation from family and aside from those in SH, you have NOT had the opportunity to avoid high housing costs in London. Whether you rent or have a mortgage. None of us get to choose when we're born: two 33 year olds struggling now to pay London housing costs aren't less savvy than people who were old enough to buy in 1997. They're just less old. And since a mortgage is often quite a lot cheaper than a private rental, separating the two is an artificial distinction when we're talking about whether high housing costs are a choice or not.

On the topic of family childcare, lots of research out there indicating that it's common in Britain, but I suspect the picture is geographically uneven. So if eg you live in a commuter town in the south east where most people aren't from there, I can imagine your circle would include a lot less of it than average, for example.

This is a bit out of date now but discusses the findings from the Millennium Cohort Study which is good:

www.gov.uk/government/uploads/system/uploads/attachment_data/file/181364/CWRC-00083-2011.pdf

www.familyandchildcaretrust.org/sites/default/files/files/2.1.11%20Listening%20to%20grandparents.pdf

Media interest in the topic too.

www.theguardian.com/money/2016/jan/18/childcare-grandparents-worth-2000-a-year-hard-pressed-parents

I live in one of the cheaper areas of the country for childcare, but even so I would definitely say that having family help has been very significant to us.

Waitrose but the reality for some people is that a 100k salary is only giving them an average lifestyle.

My DS is job hunting at the moment. He's looking mainly in Manchester or London. His reality is that what looks like a really good salary would mean he would struggle in London and be living in grotty flatshares for a long time.

Whereas a much lower salary in Manchester would give him a really decent lifestyle, enable him to rent his own flat and even think about buying.

Most people see that £100k is ia large income and would expect a decent lifestyle on that and for some it is. To us £100k would mean we would have tons of money rolling around but that is because we bought our house 30 years ago, have no childcare costs and no comuting costs.

However I can see why that expectation doesn't match reality nowadays for many. 40% tax, nursery/childcare fees particularly for 2 or more children, and housing costs would use a lot of that. Rent is often more than a mortgage and even a bog standard 3 bed semi detached house, if you've bought in recent years would be a huge outgoing each month, particularly down in the south or London. Factor in two peoples comuting costs and there wouldn't be much left for luxuries.

So what I'm saying is that £100k would mean a huge range of lifestyle levels, depending mainly on your age and living area. I can certainly see why some people are struggling on £100k and having a relatively basic lifestyle which certainly doesn't meet the expectation or definition of someone earning that sort of money. Others however, would be enjoying the luxury that you associate with that level of income.

Conversely many people are really struggling on £27k, others have a decent house bought 30 years ago, no childcare and no comuting costs so may have more disposable income than families on £100k.

I think you can't apply blanket thinking to this question.

Agree with SilentBatsperson.
We bought our house in S/W London in 2006 for around 2 million. Within 3 years it was worth double that and even when the property market slowed, house prices in this area have continued to rise. In Central/S/W London, 2 million will get you a very average Victorian 3-bed semi.
We were very lucky to buy at the right time. What you find now though, is that it's very difficult to move to a slightly bigger house, because of the stamp duty. People are asset wealthy, but very few have a spare half a million pounds that they are happy to spend on stamp. So nobody moves house and people invest the money in basement conversions and/or kitchen extensions instead.
The other huge factor around here is the cost of private schooling. When we started paying for our first DC, it was around £3,000 per term. Now we have 4 DC in independent schools at around £6-7k each per term. At a 50% tax rate, DH has needed to earn £160k before anything else, just to pay the school fees of around £80k per year. This is far from unusual in this area. Everything is relative.

Yes buying a £2 million house is relative

Putting four DC through paid-for education is unusual anywhere.

Brassy - but millions live in sw London and that's what houses cost. And I'm not talking about areas such as such as K&C, Notting Hill or many other areas where prices are considerably higher!

About £500k buys our first small house (outer London) 3 beds and you could just about fit 4 children in there by the way. A young couple on £70k each could buy that before they have children if they are young professionals in London companies/jobs. Not easy but possible.

These kinds of threads are fairly pointless unless they help lower earners real,ise the absolutely massive amounts of tax the state takes from gross pay which I don't think many people are aware of. There will always be someone worse off than us (and yes I funded 5 children at fee paying schools age 3 - 18 and then university - just paid the second last lot of school fees ever today having paid continuously for 30 years..... worth every penny.)

I know that is what it costs in some areas of London. It is why everyone I am friends with who lives in London, lives in outer London, and commutes in.

Buying £2 million houses is indeed relative, but the point is that some of the people in London living in those £2 million houses will be on modest salaries, or indeed pensions. Because they weren't worth anything like that much when they bough them, and they couldn't possibly afford to do so now.

This is why there are streets in London where the older families who've been there decades are working class, and the younger people are all higher earning professionals. It is not because the younger people had a choice to pay the same for their housing as the older. In some of these streets, no doubt the working class families are on 27k, the young professionals on 100k or more combined.

I do think four kids through private is pretty unusual though.

You can buy 4 bedroom houses in Plaistow for £500,000 easily. Not that long a commute. Most people in London do not earn high wages, and so make choices that those on £100k plus would never make.
And yes I know how much people pay on tax. But high earners don't seem to understand how others live. They think those on salaries of £20 - £30k get lots of financial help, when most get nothing or very little.

These kinds of threads are fairly pointless unless they help lower earners real,ise the absolutely massive amounts of tax the state takes from gross pay which I don't think many people are aware of.

Patronising much? You've surpassed yourself there.

I think most people realise that their tax will go up as their wages do actually Tiger. It only takes five minutes fiddling around with a tax calculator or doing some reading. But the fact is that some jobs have payscales that never reach £70k and so of course if you were in that position, even the net of of a 6 figure gross sounds pretty luxurious.

Perhaps some of us need to take 10 minutes to be grateful to the nurses, retail workers, childcare staff, bus and train drivers, mechanics, classroom teachers, cleaners etc? You know the millions with the truly useful jobs who keep everything running?

And I lived in London when I was young earning a lowish wage. It was 30 years ago, and I could not afford to buy in London. Those I worked with who did buy in London, bought a long way out, or had family help. Yes it was easier, but already house prices were disproportionate to ordinary wages.

What was different was the amount of social housing in London. And some people I knew who were in social housing, bought it with large discounts.

laSegunda
There are not millions of people living in £2M houses in SW London. There are houses within 1/2 mile from Richmond station under £1m same for Wimbledon.

There may be no houses in the bit of SW London that you want to live in that is below £2m but that is a very different statement.

Actually just looked in zoopla at a 1 bed flat of the type a colleague bought in Enfield 30 years ago, and they are now worth about £220,000. Probably quite a bit more in real terms than she paid for it, but not the £2 million quoted on here. She was in public sector and not earning a lot, her partner was a graphic designer and commuting into central London every day. And buying that place was a struggle for them, they had no money left over.

Manumission - Exactly. Those are the truly useful jobs and in fact I used to work in social work pre- DC.
I totally accept that putting 4 DC through private ed is probably unusual. However, even to put 2 DC through, you would need £80k pre- tax and very few people only have 1 DC. The schools are heaving and over-subscribed.

Struggling to see how the 'cons' of life on 100K+ balance the 'cons' of living on 27K which is average income in the UK

I disagree (although i'm in neither camp, our household income is about £50k).

Reading some of the examples of peoples lives/income on this thread makes me actually pity those with a £100k salary. Two hour commutes, living in a three bed flat for £2k a month, no fancy holidays, working 70 hour weeks...all examples of super high earners on this thread who all seem to be based in London.

I just think - why? What's the point in being such a super high earner when your quality of life is poor due to super high expenses?

I know lots of people say they can only work in London for their salary - but lifestyle wise it seems that a lot of people would be much better off on two £20k salaries elsewhere.

£27k household income is enough to buy a house and live decently in so much of the UK.

green I agree. Although I think we're in "world's tiniest violin" territory in our feelings towards them.

Also, what I noticed in the City (I've since left) was lots of high earners "trapped" because they had to service a mortgage, pay school fees, whatever else, so it was seen as very difficult to downscale to a lower-paid but less demanding role. I.e. people trapping themselves with high spending.

In the case of one of the couples I mentioned I would also put money on the fact that if the higher earner quit their job, their spouse would be off like a shot.

Chaos - wellI guess I was talking about Fulham, Battersea, Putney, Barnes, Richmond and around there, though its true you can get better value for money going into Twickenham for Richmond, or somewhere like Merton or Raynes Park for Wimbledon. Still not exactly cheap there though and way out of line with national averages.
We just bought a flat in Putney for an elderly relative for £550,000. It's 1 bed, less than 50 sq metres and over a shop and needs central heating putting in as well!

But most people in London do not earn anywhere near £100k.

"First, some headline numbers. The median household income for London as a whole in 2012/13 was £39,100 a year and the mean was £51,770. The difference in the two calculations will be down to the effect of higher earners on the mean, whereas the median describes the mid-point of the income range. In both cases, the figure was higher in Inner London than in Outer London. The London median compares quite strikingly with the median household income for the UK as a whole, which was £30,600 - 22% lower than in London.

Dig down to borough level and some interesting trends emerge. The overall London median figure had risen by 44% since 2001/02, with the steepest increases taking place in Hackney and Newham. Both were up by 60%. Yet Newham’s median was also the lowest in the capital at £28,780, followed by Barking and Dagenham’s £29,420. The lowest increases in the median were 32%, in Enfield and Brent. "

Household income is on average higher in London. But most people are not big earners.£39,100 a year median household income, means 50% of Londoners had a household income less than that.

Those with large household incomes in London often pretend that is just what you need in London.That is bullshit.

Tinkly we're talking about different worlds. You're talking about buying houses, I'm talking about not knowing where the next £5 is going to come from to put on the gas/electric. When you've sold every possession worth anything at all and still don't have enough money to get to work. Choosing between food or heat. Very real situations faced by millions of people every day. I know, I've been there-and now I help people who are there RIGHT NOW.
There's no point trying to explain to you if you think 25k left over is 'average'. It's certainly not.