It’s like a parallel universe

[Imustbemad00]

Inspired by a few threads recently about money. Specifically money in London. I’m shocked at how many people seem to think you need to be rich to live in London (£100k per year is rich to me) and how many people think £100k is not a lot in London.
Why is this specific to London?Other than house prices?
Just to put it into perspective, I’m a single parent with 2 children living in zone 1 London. I take home £22000.
Admittedly, cheap rent at £650pcm. But we manage. Obviously we’re not well off, can’t afford fancy holidays, buying clothes for summer at the moment is a struggle, have no savings, can’t afford to decorate. But we have what we need, the occasional treat, short break
Most people I know locally are in similar positions. But I suppose people have a tendency to mix with their own kind.
I just find this ‘other london’ bizarre. The London where you need 100k to barely get by

You are remarkably lucky to have a secure, cheap tenancy. Most London rents are a lot higher than £650 per month.

@tictoc76 where did the OP say she was not working? Judgemental ?

Ok - I’ve just done some quick sums here - it is slightly fascinating.

Family 1 - single mum, 2 kids aged 5 and 2. Mum works full time (so one in nursery and one in after school club etc.) Income of £22k. Rent of £650 per month.

Family 2 - single mum, 2 kids aged 5 and 2. Mum works full time (so one in nursery and one in after school club. Rent of £1650 per month.

Family 1 - post tax income = £1500 per month. Benefits (according to some numbers I chucked into “entitledto” making estimates as to childcare costs etc) £1900 per month. Total income = £3400 per month. Total income after rent = £2750.

Family 2 - post tax income = £5500 per month. Benefits 0. Total income = £5500 per month. Total income after rent = £3850.

So despite Mum 2 earning nearly 5 times as much as Mum 1 the family is only about 40% better off each month.

100k easily whittles down to nothing without spending on things like private school etc.

I found that when I was on maternity leave and unable to work (on/off hospitalised), that Universal Credit dealt with many things I think perhaps people don't factor back in when they think of higher incomes.

But basically: £100k minus tax, NI, student loan = £60,000/year = £5000/month

Rent and council tax = £1500 (£3500 left)
Childcare, before/after clubs (x3) = £1500 (£2000 left)
Cars (x 2) mandatory for work (insurance/tax/petrol) = £300 x 2 (£1400 left)
Utilities/tv/broadband/phones = £250 (£1150 left)
Groceries for 5 = £450 (£700 left)
Debt repayment = £500, racked up from maternity leaves & house moves to get work (£200 left)

Remaining £200 to be used for every possible extra that comes up - appliance breakdown, clothes/toiletries, school uniforms & shoes, car servicing, birthdays/Xmas.

Really not a lot of wiggle room for what feels like should be a huge income, because the outgoings are equally huge!

OP, I’ve just checked on Zoopla and the cheapest 2BR flat I could find in WC1A was over £3k per month. Plus bills and council tax would take you to £3.5k, plus £1500 for a full time nursery place, and that’s your £100k salary spent.

I would love to only spend £650 on rent, we live in a 2BR flat in a cheap area of south London, and rents around here are £1600-£2000 per month. You live in an absolute dreamworld if you think your experience of London is the norm.

tictoc OP is working.

I didn’t mean to imply OP is not working, just that she is clearly entitled to benefits on top of that and these benefits are paid for by the taxes of those earning the higher salaries.

It’s a bit naive to think that everyone could live this way as we as a country can only afford to support those requiring benefits if others are paying the taxes to afford these payouts. The reality is that with subsidised housing, childcare, working tax credits etc the disposable income of OP is not far off that of someone on what is considered a high salary.

I work with young people in Southwark Zone 1. Many of them live in social housing in Zone 1 with their parents.
Wish there was more of it. Many privately rented properties in zone 1 are ex-council places. The posts in here about high rents seem very accepting of the extortionate prices people pay to privately rent in London.

Also, is it people's fault that so many jobs don't pay a high enough wage to live on (pay rent/ mortgage costs precisely)

These two things are the main reason why the wealthy are getting wealthier by the day, and the gap between rich and poor in the UK is growing so fast. Not sure why people are so sneering.

Listen up now, you are very lucky to have the cheap rental accommodation and good luck to you. Most people in London will be jealous of your good fortune and hence the nasty comments. You are doing OK managing your budget and hopefully in time you will be able to afford a more comfortable lifestyle. I wish you all the best and you re correct £100k is a big pay packet in anyone’s book.

I left London because on 40k in zone 3 as a single parent i’d barely scrape by. Rent for a two bed (in shitty condition) was a minimum of 1400, then I had childcare to contend with (roughly another 1200 per month if I work full time). Those added together were more than my entire take home salary - and I haven’t paid bills or bought food yet!. My income of 40k meant I got no working family tax credits or any other benefits. So, basically there’s a low end where you get housing benefit etc. that means you can scrape by (as you do thanks to your cheap rent) or you need to be substantially above that (i’be personally figured around 60k as a single parent) or you can’t afford childcare and rent and food.

OP's lifestyle doesn't sound comfortable to me.

Most people don't get to pay 650 pounds a month for rent on a secure tenancy in London, though.

Childcare would be more than your rent if you have one pre school child.

You've answered your own question. A secure lifetime tenancy at 650 per month is unbelievably lucky.

But Patricia MOST people can't pay 500 quid a month to debts, or run 2 cars in central London, or factor in 200 quid a month for contingencies...!
And I don't know why the assumption that a person on 22 k take home is obviously entitled to thousands in benefits? I got absolutely nothing as a top up once earning over about 20k gross , except child benefit.

£650pcm in zone1??

What for?! My mates pay 600-900 pcm in Zine 2 for a room in a shared flat...

If you earn 100k and you spend 100k, that doesn’t mean you’re broke/not well off etc.

I get the huge tax that you pay, I get the large mortgage you pay (but you’ll have a massive house value at the end of it most of us could never ever have), and I get any travel expenses. These are essentials along with bills etc. BUT once you start getting into private education and all the nice extras (which you are fully entitled to, money you’re working hard for, spend as you wish) don’t think these are necessary expenses. These are luxuries. As are holidays. As are after school clubs. As are haircuts. As are eating out/takeaways. As are activities/days out.

Someone on minimum wage, who barely covers the bills, has NOTHING left over, no treats at all, even though working full time...you MUST see how hearing about someone earning 5 times as they are, say they’re skint and 100k isn’t much to live on.

Difference is, lower earner has already scaled back, with nothing in the tank. Higher earners can cut back, can make savings, can do so much more.

There a huge amount of 100k earners on MN. The entire top 5% are here it seems and not once have I ever heard someone say how fortunate they are. And all responses to them are met with ‘you must be jealous’.

Really. Not. Jealous.

BUT. If I was on 100k, I’d know how to budget, because being poorer teaches you that at least 😂

IfNotNowThenWhy I'm honestly not saying having a high income doesn't come with its benefits (it does), just that it doesn't go as far as many would think for many, at least not in certain areas.

The cars and the moves (debts) were necessary for the job, without which the income wouldn't exist, so bizarrely I've ended up having to spend more to earn more - which I'm then having to use to pay back the debts I accrued in order to earn more.

I've also been in the position of earning precisely £0 a month, and honestly the difference was not as much as I'd expect. (Universal Credit sorted out rent, allowance for children, disability, carer status all adding up). Then I didn't have the extra expense of the moving debts, cars, and childcare.

Not sure why people are so sneering

Not sneering - good luck to her. But it’s a bit disingenuous to say “oh I can’t imagine what everyone else spends their money on” when she knows (or should know) that what most people in London are spending their money on is exorbitant rents. She is in an extremely fortunate position relative to the vast majority of Londoners (obvs not those on £100K) not to have to worry about affording a roof over her head.

It’s like the posters who can’t imagine why their friends/school mums/colleagues etc are so hard up, and then it turns out they’ve inherited their house and their parents do all their childcare. Yes if you removed my two biggest expenditures I’d have plenty of money too.

Op, comments like yours is why I've chosen to stay away from my long term friend! She claims to be a single parent , has two young kids , live in a beautiful social housing apartment so pays little rent in zone 1, works only 16 hours a week, gets working tax credit, child benefits, disability allowance and disability tax allowance ! She also gets free taxi rides to work , discounts on theatres trips, train journeys and 70% of her childcare cost paid for her .
She constantly compares herself to me who works full time , isn't entitled to any benefits, pays full time nursery for my dd and a part time au pair , mortgage ( had to move out of London in order to buy a property) all with a joint income of 70k! It really hurts when she constantly tries to knock me down for leaving in a "crap" area, for working full time when according to her " I don't have to!" And for not being able to take 4 holidays a year like she does ! I subtly tried to point out to her that she can have these choices thanks to welfare and couldn't have done all of this on her salary ! So no, you're not actually in a position to make such comparisons or comments when you're being supported by the state to this extent!

£650 rent in Zone 1 isn't the going rate for anything private rental. Council flat? I'm in Zone 3 & going rate is £1, 100 for a 1 bed privately rented flat. If you want to buy a 4bed in a leafy & 'naice' /posh place you need to be on more than £100K. From experience, managing is scraping by, which is bloody hard.

@TrendyNorthLondonTeen £100k salary is not 8000 per month. It's between 5-6k depending on deductions.

Anyway OP as others have pointed out if you didn't have social housing and the rest of the benefits you get, you'd understand why £100k doesn't make you rich if you live in London

@gluteustothemaximus people have pointed out how £100k is spent with very little left over

If you've two kids in nursery then that's 2k gone
Add housing - in OP's area 2k
Leaving £1k for bills, transport, food, clothes etc

cherry what's a disability tax allowance? Is that its name?

I'm one of those who would argue that £22k is a low wage for a lone parent of 2 DC, and £100k is a lot and that person should stop moaning.

However, when you crunch the numbers, the gap is nowhere near as much as the gross salaries suggest. You say you 'take home' £22k. Is this your gross salary? This is where we have to be clear as it makes a huge difference, but we will assume that your gross salary is £22k, obviously you will pay tax and NI on this, and you receive whatever benefits you are entitled to.

Mumoftwoyoungkids has posted some numbers:

^Family 1 - single mum, 2 kids aged 5 and 2. Mum works full time (so one in nursery and one in after school club etc.) Income of £22k. Rent of £650 per month.

Family 2 - single mum, 2 kids aged 5 and 2. Mum works full time (so one in nursery and one in after school club. Rent of £1650 per month.

Family 1 - post tax income = £1500 per month. Benefits (according to some numbers I chucked into “entitledto” making estimates as to childcare costs etc) £1900 per month. Total income = £3400 per month. Total income after rent = £2750.

Family 2 - post tax income = £5500 per month. Benefits 0. Total income = £5500 per month. Total income after rent = £3850^

So that huge £100k salary, that's nearly five times yours ends up as an extra £1100 per month, or 40% as no child benefit or help with childcare.

The other thing you have to consider is the hours worked for those salaries. You can probably assume that both these theoretical jobs are supposed to be 'office hours' because being a single parent and working shifts is incredibly hard to manage with childcare etc, but a £22k job is much more likley to be able to be done within those hours and forgotten about the rest of the time.

For £100k jobs, they are often 'always on' where to be able to leave the office before childcare closes, our £100k earner will need to take work home to finish off when the DCs are in bed, answer emails out of hours etc.