To wonder what a ‘good wage’ is?

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Not really an AIBU but something I’ve been pondering on, and posting here for traffic and opinions.

I often see people mentioning that someone earns ‘a good wage’ or indeed a high wage, but what that means in practice is clearly dependent on many factors, not least the area someone lives in but also their dependents.

I work in an industry where I talk to people on very high wages all the time about their jobs, which I think skews my view of what’s normal. I was involved in a discussion in another forum recently where it was mentioned the average salary at the moment is £27,000. Of course this is a mean average, skewed by a few very high salaries, and most people are below that. But many people were commenting that they didn’t know anyone who earned that much and had never earned anywhere near that themselves.

I’ve also been fascinated by this calculator from the Institute of Fiscal Studies that shows where households fall in the stratification of the country www.ifs.org.uk/wheredoyoufitin/
I think a lot of people would be surprised by it. When DP and I each earned the average salary (no kids) we were still in the top 25/30% ish of households which seems mad, and we live in an expensive area.

I’m wondering - what do you think a ‘good wage’ is, and at one point does something become a high wage?

I'm on just under £70k. I feel comfortable. I genuinely cannot understand how anyone can live on such low wages.

I did the calculation earlier to back into median gross household income (i.e. Before tax) I calculated £44k which sounds about right because most households have more than one working age adult working and if earning less than this would most probably qualify for HB if with children.

yes, and if you are single and on that you are laughing. If you have a sahp and 2 kids to support it's not so great.

Personally i think the way tax is done needs a major overhaul. I think no one under 20k should pay tax (what's the point when you would need loads back in top ups). That it should be 20% from 20-70k. Then 40% 70-100k.Then 50% on everything over 100k

But as it is, everybody on over £8k pays NI at 12%
and once they go over £11,500 they are also paying tax at 20%
so 32% of wages are taken from people earning less than the NMW

but even then, 50% of earners do not earn enough to pay tax .....

Yes, i know the current tax rates. Higher earners need to pay more into the pot. Lower earners need pay less. Imo.

@mrskoala do you not think we pay enough. My monthly tax bill is more than most peoples wages. It’s eye watering to see it wasted by the government every month.

Interesting thread.

According to that tool, we are in the top 2%. I earn £90k, my DH £80k. Both professional jobs in the most expensive city. Renting a 2 bed flat here is £2,500. Our mortgage is just over £1,800 and we then overpay.

Don’t have childcare costs or school fees, no debt outside of mortgage.

I would consider us very well off. Maybe not “wealthy” as, in my head, that’s linked to generational wealth and assets, but certainly exceptionally comfortable.

I don’t see how people say they couldn’t manage on amounts less than that. After mortgage, bills, food, activities, frequent nights out etc, we have over 50% left to put towards pensions, savings, holidays, investments etc. if our incomes were halved, we might not be able to save or invest on the same scale, but we’d still have a very good quality of life.

A few years ago, I lost my job, out mortgage was £2,600 and my husband’s salary at the time was £68k. We did have to cut back on extras but it was completely manageable.

I don't think we pay enough - I think we should be in line with some of the Scandinavian countries (I want our public services to be better)

No i don't. If you pay that much in tax you must earn a lot. And have a lot left over.

I would never dream of saying what is a good wage in general. I can only speak for myself. The SE is a big place and the cost of living is not equal. The difference in cost of a 4 bed house in Edmonton and one in Chiswick could be more than £1m. Where I live there are no Aldi’s, Asda or Lidl so my outgoings will be more than others. Of course our income is more than just a good wage but I have a close friend who does live in my area and earns considerably less, £21k. Now I know she really struggles on that but stays where she is because of the schools and friends network she has built. 21k is nowhere near enough in London to enjoy life to its fullest with dc. I’d hate to be juggling everything and I count my blessings everyday. A good wage is enough to be free to make choices.

I think it would be a good idea if tax rates went back up to what they were under Mrs Thatcher.
While keeping the allowances as they are currently.

A comfortable/good wage to me would be £40k + for someone with a family. Less than that of single.

A person not earning enough to pay tax isn't necessarily on NMW talkinpeace. They could be part time. I don't pay a great deal of tax and it isn't because my hourly rate is low.

They need to change the tax rules for businesses. I find it crazy that so many people are self employed and paying themselves through dividends. As business owners here in the US the IRS would have a shit fit if DH did that. They would take the whole dividend as income and apply full taxes to it. Our tax accountant advised us to take no more than 20% as a dividend. We don't take a dividend. It's just easier to pay a bonus at the end of the year and pay income taxes on it. Taking a dividend means you pay capital gains tax. I'd rather not waste my time on figuring out the basis each year. Yes we would take more home but the tax rates on income are reasonable.

Want2bSuperman our total gross household is £34k + £1790pa for child benefit. We are not entitled to any housing benefit.

So please, FFS, stop banging on about housing benefit topping up our wages!

The housing benefit rates and thresholds depend not only on how large the family is but also on where you are in the country.

These threads are interesting but because there's such colossal variation in housing costs, never tell us much about how much a person actually has. Especially in areas like London, you could have people on very low incomes who bought decades ago alongside millionaires. And the former might well be more wealthy even if they don't have a lot of cash.

want2be
I find it crazy that so many people are self employed and paying themselves through dividends.
Dividends are taxed now - only £2k is tax free (despite it having already been taxed at CT rate) - after that its 7% for basic rate and more for higher rate.

Dividends are not covered by CGT in the UK.

@jessyoume that puts you in the top 1%, just.

Just done this calculator and simultaneously shocked and somehow not surprised that we are in the top 3%. Shocked because I don't think of us as being particularly well off - but we live in London, so we have a big mortgage for our very small flat and pay the equivalent of a second big mortgage in childcare every month.

But logically I know that we are actually on a very good household income, so I am not that surprised (and ten years ago I was earning about 5p above minimum wage, and living in a bunkbed, so I have been at the other end of the scale).

As PP have said, I think a "good wage" very much depends on your expectations within your industry / level / qualifications. DH earns very well for his industry, whereas even though I actually earn more than DH, my earnings are pretty mediocre for mine. Both are quite high-paying industries though, so our overall level is good.

Mrs koala,
The no one that earns under £20k idea doesn’t make sense.

I earn just under £20k because I work part time. I don’t need anything back in top ups. I choose to work part time. I feel happy to pay tax because my dh also contributes to the household income.

I think it’s right that almost everyone pays some tax rather than relying on the top earners to fund everything. That only leads to resentment.

Mmm similar, it would need to be household income really. Which obviously opens up a whole new can of worms.

I'm sure if you wanted to pay extra tax you could Bodicea. Not every one needs top ups on that. But I think it's the minimum a person would need to live on and therefore shouldn't be taxed. Just my opinion.

I think it’s right that almost everyone pays some tax rather than relying on the top earners to fund everything. That only leads to resentment.

I don't understand why someone earning 100k (paying 30k in tax, with 70k left for themselves) would feel resentful of someone earning 10k and paying no tax. They're going to want to swap lives anytime soon are they. Why would they feel jealous of someone taking home 1/7th of their salary? I think some well-off people must they think they're worth what they get paid.

*not going to want to swap live anytime soon.

namechanger I totally agree with you. We pay huge amounts in taxes but really don't focus on reducing our bill. I'm more concerned about getting it right! Someone earning £20k a year and raising a family have many fewer options than us and yeah I'm not going to want to swap lives anytime soon.