Average incomes

[flabbergastedfinances]

Found out that the average family income is around £30,000 a year and I can not believe it. I don't know a single family on anywhere near this low, lowest is possibly 70k mark between two teachers but majority have two earners pulling in 40+ each or one higher earner on 80/90k+

How on earth is 30,000 even possible in light of minimum wage and benefits/tax credits etc? What is even more shocking is that I used the where do you fit in calculator and we are apparently in top 98% of families in the uk. No chance, absolutely no chance.

We might have a high ish mortgage (still only £1000 so not outrageous) and have slipped into bad spending habits (Uber's, eating lunch out every day, new clothes now and then) but we are hardly excessive. We can't afford to run two cars, can't afford foreign holidays, can't afford the posher shops like Boden or northface new and yet this chart tells me we have it better than nearly everyone else in the country?! What am I missing?!

We have a child in childcare a few days a week, so that and mortgage are biggest expenses but combined that's only £1500 and I see everyone else buying £300 coats, spending 1000s on holidays, children in private schools and I am utterly stumped.

How can the average family income be £30,000? Which families are surviving on that? None I know that's for sure and I just refuse to believe that's an actual reality

We have two degrees each and around the average. We also have a child in private education. It’s very interesting!

Your mortgage will go down eventually, though- whereas a lot of young people and people on low incomes rent. This will pretty much only ever go up. And you are gaining an asset that will potentially help support you when you are old.

If things got really tough (e.g. you or your partner became disabled or unable to find work) you could downsize, too- whereas someone with a £400 mortgage may not have that option.

You're still in a position of relative privilege.

To address some of your other points- not everyone gets an annual pay increase, a lot of people on minimum wage e.g. in retail won't. A lot of people work via agencies or on temporary contracts, so may not ever stay in the same job long term, or they may repeatedly lose/have to leave jobs due to sickness/absence for childcare reasons. In my first job post uni, I earned £19,000 and got a 2% pay increase- which at the time was less than inflation. Getting pay increases of £2000 a year like teachers do is really bloody rare!

Getting qualifications to improve your prospects is also often hard. Employees on minimum wage are easily replaceable, so employers often won't be flexible and allow suitable time off for training. If you have no savings and maybe a bit of debt, it's hard to leave your job to gain qualifications, and it's hard to study around a job with unpredictable hours (e.g. zero hour contracts), and in many areas you eventually face the prospect of needing to move to find that first "professional" job- again this is hard with no savings, and even harder if you don't know anyone who's done that.

For some people, gaining qualifications is also really hard.

I would guess it's really hard to imagine if you've never seen it, but I know young people where a permanent retail contract on minimum wage is actually an aspiration.

@otterturk I think it's a bit ignorant really. Surely it's not that difficult to grasp that most parts of the country are significantly cheaper than London/the south east and so people can survive on less.

Mine says 9% on that site. I'm happy enough.

Well aren’t you the lucky one!! I think you will find there are plenty of hardworking families were they are both on minimum wage!!

Have you never heard of the working poor!!

Think you should watch Ken Loach’s new film SORRY I MISSED YOU!!
It’s just heartbreaking to watch a family work and try so hard and just never get anywhere.

I decided a few years ago not to give money to big world wide charity’s, but to only give to local food banks and ones that help local people who are straggling.

The thing is that most of us do live in bubbles. I live in a similar one to the OP. Intellectually I know that there are lots of households on very low incomes but I don't know any so it's hard for me to really get it. Mn has been really good for me in that sense.

I also don't really know any SAHMs - I have couple of acquaintances who were SAHMs while their kids were very young but I literally don't know any SAHMs of school age children. There are posters on here who are the opposite and almost everyone they know is a SAHM . Different bubbles.

I think people are giving you a hard time. I have actually met quite a few people like you who have no concept of the real world. It s a gross generalisation but they were all publically educated with jobs in the city,etc (of course I am sure many are not like that). They were ultimately people who had never seen any different. The head of our department was moaning, in all innocence, the other day about his 55k wage which is 'just enough for pocket money' in front of staff on much lower wages. Some of them are on zero hour contracts! Can you imagine how tactless and hurtful that would have been? She didn't mean anything bad and neither did you but still, you might want to think twice before saying stuff like that. Don't just assume people ear well; have savings, enough to eat and pay bills, know they can fall back on family money,etc. You should be given credit for hanging around rather than not coming back to the thread but you should really open your eyes to the world around you beyond your immediate reach and perhaps vote accordingly at the next elections; )

I haven’t looked into the figures in depth, but on the face of it, if the average wage is 28k, and the average household income is 30k, presumably this means the majority of households are single salary?

Also, even if housing is a similar percentage of income, the amount they have left over is still less. Their food and bills aren't also proportionately cheaper, and outgoings such as commuting costs will vary around the country.

Equally, a single person, living alone with a rent of say £400-500 can live quite comfortably on a salary of less than £30,000- they could easily run a car and afford a short haul holiday each year. They still count as a "household".

I've not read the whol thread but has anyone pointed out the 30 k stat is wrong, it's 30 k disposable income is the average, so it's 30k after tax etc s is the average, obviously gross is much higher.

Surely households also include students, the retired, the disabled, the unemployed, those on minimum wage? You probably come into contact with these people daily when you're buying your lunches and taking your Ubers.

You can't measure wealth on outgoings because if you are paying £1000 a month mortgage your house will be worth more. So where I live the average 3 bed semi costs less than £200k. In the south east a 3 bed semi will be worth a lot more. So you will be asset wealthy.

@flabbergastedfinances yes there is a huge difference in income with a combined salary of 100k and 30k you can't just look at you paying a higher mortgage rate and think that's the same. Just a rough guide but if you look on salary calculator the difference between a 30k and 100k monthly take home is nearly 4k so paying the 600 higher isn't quite the same....

We all live in a bubble of similar people.

While my son is young we are both part time and have an annual income of £50k gross. We live well enough on this: not loaded, but not poor either. I know lots of people who earn less and are doing fine

So a family on 30k paying 300/400 a month rent us similar to a family on 100k paying £1000 a month

Well no, because the absolute amount your family has left is far more on the family on £30k.

It's strange why you would start a thread about money when you are so financially illiterate and ignorant of typical earnings of the people you come across day to day even if you don't consider them to be personal friends.

How much do you think the person who cleans your office, serves you coffee or groceries, cuts your hair, is a TA in your local school etc etc earns?

If you feel like you don't have a comfortable life on £100k, a £1000 pm mortgage and presumably no childcare costs then you seriously need to look at your budget as you must be wasting money all over the place.

Not sure if I've understood correctly but the 30k is after tax so closer to £50k family income as average? That makes more sense to me if so?

My family survive on that, single parent with two children. I work fulltime and do a second job two/three evenings a week. Earn £25,000 a year and have lived in rented house for 19 years.

20% of households in uk don’t own a car and 44% of low income families don’t own a car, I doubt that OP knows any household that don’t own a car

I volunteer at a food bank and it has been eye opening. It's difficult to imagine the full repercussions of poverty until you see it. Women who have absolutely nothing, who have fled violence with the clothes they stand up in. I've known women with no knickers, children with no Christmas presents and babies who have never had a nappy.

It's easy to separate yourself from poverty when you never see it, and I'd urge you to volunteer somewhere if you ever find yourself in a position to. Food banks are a lifeline to many. Government statistics usually only reflect Trussell Trust food banks, which don't include the many independent ones. As a result, people get a distorted view of poverty.

Do you think most households have two professional incomes op?

I assumed minimum wage increased yearly like a progress review or how teachers pay goes up. I didn't realise it was set and stayed that level for good.

Well nmw does go up, I don't think it is every year, but it goes up when the government decides it does, not as a yearly review thing. This has a knock on effect to those like me though, I don't get a pay rise just because nmw went up, and can be doing a junior management role for 10p an hour more than junior employees. The cost of services inevitably rises to cover an increased wage bill - which means my cost of living rises but my income does not. Not that I begrudge the nmw rises at all, I don't because I was on it for long enough myself, and contrary to popular belief, people on low wages do work hard.
You do seem very naive OP, but you do seem to have realised from this thread that things are different to how you assumed.
I live and get by on my income, but a lot of people think the way you did, have no issues using services provided by those on low income like shops, pubs, restaurants, hotels, childcare etc, for the lowest rates possible, yet point the finger at the people earning the low wages and say they're scroungers, and lazy and have no aspirations. And quite often treat them badly whilst doing so too. It's a double standard that baffles me, because without a lot of these services provided, some people would be unable to do their better job in the first place, or wouldn't have been able to get where they are now.

There are so many assumptions being on here by the Op, honestly a little sensitivity would go a long way.
I grew up in what would be deemed as poverty, sharing a bed with several people at points/not enough food/clothing.

I managed to get some lucky breaks, via uni and then career, hence being retired before 40.
But people are really struggling in this country, 30k wages even combined, when I was growing up was inconceivable.
I still have acquaintances in my old neighbourhood and the average most people are earning is roughly about 12/15k. They all work super hard and try their best to give their children the best start they can. But everyday brings new hardships and unexpected bills.
The point is people survive but it is not a pleasant way to live.
I now people from different walks of life and like you Op and they have no idea about the very real sacrifices people on NMW make everyday.

• We live on 30k per year. 2 kids, own our own home, at least 1 holiday a year and we run 2 cars. Maybe you should manage your finances a bit better. And we don't receive and are not entitled to any benefits on that amount*

^I believe you. We could also live on this amount if we had to. We need to earn £15k each to pay our mortgage, all bills, council tax and food shopping and a little bit left over.
We have always made a point of keeping our outgoings to minimum wage levels so we could do bar work in a crisis if we both lost our jobs.

I managed on just under that as a nurse of 18 years (single parent) however I became unable to work due to disability I now have to survive on an ill health pension and benefits which combined is about £20,000. It is a case of having to manage with no choice I would not choose to be in this situation but I am so I manage. I live to my means.

One of the most jaw dropping threads I've read in a while.

OP I'm genuinely interested and not out to give you a hard time - the calculator says you're in the top 98% but you feel you struggle financially? I'm assuming (could be wrong!) that your household income must be in the 6 figures, or somewhere close? Just as you didn't understand how a family could manage on £30k, I don't understand how you can be on that kind of income and not afford holidays or a second car. Genuine question, where does all the money go??

We live in the North West, have 2 kids, 2 cars, a mortgage of £700, go on holiday twice a year (1 abroad, 1 UK) and have savings on a family income of £55,000 (I'm pt, DH is ft). I feel we have a pretty good lifestyle.