£85k per year

[pondfresh]

In the course of a conversation with my cousin, she disclosed that she earns £85k per year but said she does not consider herself especially well off. She lives in the south east but not London, has young dc. She said she has no problem paying bills etc and they have a family holiday each year but she does not consider that they are wealthy. He earns less than this as he is a teacher. AIBU to wonder how well off someone is actually is on £85k and what would be classed as wealthy.

But a high income allows you to buy assets if you don't CHOOSE to spend it all!

This is true. A high income gives you the opportunity to become wealthy. If you then choose to spend it all, then you are not wealthy. As you (I think) said earlier, it's your own fault if you do that, but that makes no difference.

Me and my OH earn more than that but we're paying London housing costs so definitely not wealthy.

Just because they may not spend it wisely doesn't mean they're not wealthy it just means they have poor financial judgement.

This!

Imho a family unit bringing in 100k a year would be wealthy. Over 50k and comfortable. In an expensive area (where even a 3 bed semi is over half a million £) add 25k to both.

We have 3k/month after deductions and that to me is a lot. But I spent most of my adult life only having money for essentials so anything more than that feels great to me!

@festivedogbone What, in your opinion, is the difference between income and wealth, or do you see them as synonyms?

BadLad having gone back and RTFT after posting I don't think wealthy is the right word. That would be more about having enough in assets to not have to work and have luxuries. Like, I don't know, getting 100k a year off your investments whilst living in a mansion you own outright. Something like that. Someone on 100k a year from a job I would consider well off though.

And I'm always surprised on these threads how many people say their household income is around 100k but they still have no spare cash after housing, cars and food! How do you think the rest of us manage?

Thank you for replying. I agree with that.

85k is wealthy enough! I am just over 50k in London (single income) and I am comfortable (net income near 3k - 2k mortgage, bills and food, 500 childcare and the rest 500 for DC bits, clothing, gadgets, home improvements and holidays.
I can understand how you can be just comfortable with 85k though. I used to shop in Primark only :) now I buy an odd item in M&S or Next, therefore my spend is more!

Quite a few people saying things along the lines of "well it's not that much once you've paid the mortgage and childcare etc". Well at least they can afford to have a big mortgage and childcare - many, many people can't.

The root cause of this entire thread though is people who discuss their income with others, especially when they are on a very good salary. It's crass and insensitive.

I think people are being really pedantic about the term wealthy.

If you earn 85K and your partner earns 20-30k you are wealthy, rich, well off whatever imo. You have money, even if you spend it all, because you don't just spend money and it goes no where. You get things for it, so a high mortgage means a nice house. You have great holidays, or a nice car. All the 'outgoings' people have suggested that would eat up that salary are pretty much all luxuries bar childcare. They are still enjoying a life with lots in it which someone earning less than them cannot have.

Imo private school fees are irrelevant, if you can even consider private education in my book you are wealthy and it's pretty sickening that there a people on here are counting it as an 'outgoing' and therefore making you not wealthy.

Wealth isn't just money it's everything about your life. There's no point being wealthy and not spending the money because you d have a shit life, what's the point? If you've earnt 85k but had a year living in a nice house, had two holidays, eaten well, sent your kids to private school then you are bloody wealthy even of you have no money to spend on yourself at the end because you've had a year filled with things.

Me and dps a joint income is about similar and I feel pretty well off, I'm not rolling in it of course but Im not going to sit here and pretend we're not well off because we've spent most of our money on good things! (We havent actually we've saved but still had plenty of good things).

We obviously can't afford a Ferrari and designer clothes but we live in a decent house, can put the heating on when we want, eat mostly what we want, go on holiday to somewhere nice, have a couple of weekends away. Our life is good.

I agree that some people on the thread don't understand the meaning of wealthy, and the OP did use the wrong word.

Someone who starts with nothing and earns 85K a year and spends 85K a year has a high income, but their wealth isn't increasing from zero.

Someone who earns 85K a year and saves 40K a year into a pension may after some years and some investment growth have over a million pounds from which they can then get a pension income of 45K a year. When they've stopped work and are are getting 45K a year from their pension they are wealthier than their younger self who had 85K work income.

(This is all somewhat irrelevant as clearly the OP's use of "wealthy" was meant to be interpreted as "well off", and someone who earns 85K is well-off compared to most of the population, even in London.)

I would say, living in London to feel wealthy, you need to earn at least 400k a year. 85k does not get you much really...interms of school fees, holidays, nanny, cleaners etc. Of course there are many who survive on far less and consider 85k a lot, but its all relative to what your experience is, living standards and circle you run in.

Most well off people in London have nannies, cleaners daily or several times a week, holidays every school break, plus send their children private. No way you could afford all this on 85 k a year. You need at least 400k a year (not to mention the expenses for food, clothes, nights out, toys, all the kids extra activities). Taxes take about half of your salary!

You'd probably be surprised if you found out who the millionaires were in your town.

That is very true. No one would guess my "wealthiest" client - there's not a hint of lavish spending - relatively modest house, fairly old/small car, pretty average clothes, now retired, but had "normal jobs", etc., but assets/investments well over a million that has accumulated from a few decades of earning more than they spend.

By contrast, my "splash the cash" client who have high paid jobs, have the BMWs (leased), big house (massive mortgage), private school fees (on credit), new iphones (on contract), are literally bankrupt because they consistently spend more than they earn and it's just a matter of time before they'll be bankrupted.

Which one looks "wealthy"? Yet the one with the lower income is the one with more assets (after deducting debts).

I would say, living in London to feel wealthy, you need to earn at least 400k a year.

Absolutely speechless.

Well for a start wealth and income are two different things. You can have a low income but a fairly substantial amount of wealth. For the most part this is because of how housing prices have worked over the past few decades. In London, there are streets where the only working class or middle income people are the ones who are old enough to have purchased before prices went batshit, then anyone under 40 who lives there has to be much better off in order to afford that same housing.

If she's on 85k, a quick look at some tax calculators shows that two full time nursery places (you say young DC so I assume plural) rent for an average two bed place and a commute will take up at least as much as she's earning. So they'd have most of his presumably 30kish for his commute, bills and a few luxuries. Thus, paying all bills and some modest treats sounds about what I'd expect in that situation tbh. I guess the question is whether that makes you well off or not? It would be fairly similar to the lifestyle we have, on a much lower household income, and I feel comfortable.

Also are they private renting? I think that's an important piece of information, because housing costs are so relevant here, and people talking about average London and UK salaries without considering how many of those people are in SH or owner occupiers leave a massive gap in their analysis. If they had high housing costs but were acquiring an asset that would change things a bit.

But it's a fact that there are some pretty high earners privately renting in the south east for whom housing and childcare takes up near enough everything, and who are thus worse off than households with much lower income but also lower housing costs. My household income is about median for family size but I bet we have substantially more assets and spare income than a family who have twice our income but are paying London private rent and childcare costs.

My DP and I live in London and make just over 80k between us - we are pretty comfortable, not wealthy, but we don't want for anything and have multiple holidays a year, meals out, a cleaner. We live in a flat in a cheap area (which we do own) and could never afford private school fees, but we are better off than most friends our age (bar the solicitor, but they bloody work for it so I can't begrudge them their serious moolah).

Someone who earns a lot of money is wealthy. They have a lot of money (relative to most other people) coming into their bank account. Money is valuable, hence the are wealthy.

Wealthy means having enough cash left over after bare essentials
to make choices.
Wealthy people can choose to spend on houses and cars and schools
or
wealthy people can choose to save and build up capital / assets

if one is not wealthy then after food, heating, clothing and a roof
there is no money left

The root cause of this entire thread though is people who discuss their income with others, especially when they are on a very good salary. It's crass and insensitive.

Totally disagree.

If more people discussed salaries then people could make better and more informed career decisions when younger. This would especially benefit women who more often go into traditionally lower paid jobs.

Starlight I live in London and feel well off. I can’t afford a full time nanny or housekeeper or private fees but we have a great lifestyle. We eat out and go on great holidays and mini breaks. We have enough saving so if our car/boiler/cooker breaks we can cover it. I can shop in Waitrose and eat what I like.
If people are only scraping by, as some have suggested, on 100k a year then they are managing their money badly. I think it’s insulting to people who manage on significantly less to not acknowledge that you are incredibly well off on 100k a year and bloody lucky.

This is interesting from the bbc on definitions: www.bbc.co.uk/news/magazine-15822595

Basically as others have said earnings of £85k put you in the upper end at a population level. However, it won’t buy you the lifestyle you probably thought it would when you were on £20k. It does buy you choices though and anyone who pretends it doesn’t is deluded.

At the level, there is a choice re proportion of spend on mortgage and other lifestyle factors. Some people spend it all on childcare and mortgage and then feel there isn’t much left. Others might have more outwardly flashily lifestyles but have free childcare or cheaper mortgage/rent.

Thing is, £85000 in the southeast is a lot less than somewhere else in the country.
3 bed terrace where we live - £500 000

YY user and I think there's a time lag in what people think a certain income will buy too. If they grew up with a bit of money they're potentially comparing it to the lifestyle their parents had too. There are often posts on here from women with DHs/DPs who earn what sounds on paper like quite a lot and who don't understand that this doesn't actually buy them the ability to have posh toys like expensive watches, cruises and the like. There was one a few weeks back.

I didn't grow up with any money at all myself, so I don't have this, but I do have friends who had eg parents who were teachers who are also themselves teachers where one or both generations has struggled to get their head around the fact that the lifestyle purchased by the same profession has declined so significantly in 30 years.

posted to quickly:
childcare;’s £6.50 per hour, so £65 per child per day.
so mortgage and childcare together easily adds up to £3000 per month.
My BIL up north: 5 bedroom semi: 350 000. 3 bed mid terace would be a lot less
childcare: £4 per hour, £40 per day
mortgage us childcare: under £2000 per month. for a much bigger house as well

a high mortgage means a nice house.

Near me an 85K income would not get you a 90% mortgage on a two-bedroom flat.