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

I have an insta-heat shower, wash dishes with water from a kettle and the washing machine heats the water for my clothes. Just no hot running water (it's linked to the CH system, which is oil fired and far far too expensive, so there's no oil in the tank, therefore no heating).

I also have an open fire with a back boiler which heats water in the tank for special occasions, but the fire is expensive to light (c £50 per week) and does nothing to heat the house, so is rarely lit.

Are you joking? You must be surely.

I make 17500, DP makes around 15000.

We don't even make 30000 between us! And we are both above minimum wage! I work 35 hours a week and he works 29.

Lol I mean we *JUST make 30000 between us 😂

Wowsers. What the calculator says we need to earn each for a decent standard of living we don't earn between us
I know we're not exactly rolling in it but I didn't realise it was that bad

For a start - "lunch out every day" 🤣🤣🤣🤣🤣 plus "Ubers"...we have a family income of about £30k pre tax, 3 kids, 2 of whom are at uni. Very fortunately no longer have to pay a mortgage. We actually have 3 cars, because both teenagers drive and it was cheaper to insure an older car just for them than to insure them on mine or husband's car (outside London so public transport doesn't get him anywhere near his work). We take sandwiches or leftovers to work. We go out once every couple of months if we're feeling flush. Our older children both worked on Sundays in 6th form to pay for their own driving lessons, clothes, going out etc. We cook our own food from scratch and shop at Morrison's, not M&S. We stalk the yellow label food and have an allotment. I only wear make up if I'm working in a public environment, and when I wfh I do a 10 hour day - I get paid per item that I make. We last went to a movie a year ago and have only flown once in 11 years. And we consider ourselves pretty well off, in comparison to many.

It’s living wage week this week, everyone should be able to work for a wage they are able to live on if working full time. There are over 5 million that are not paid a living wage

Living wage is different from national minimum wage

Our joint income is 31k, mortgage is £400pm then we have the regular household bills, we only have one car as I don’t drive. We manage to live quite comfortably and have just come back from a family holiday to Australia but did save for 2 years for it, we live in Yorkshire where the cost of living is much lower than down south

That's an incredibly cheap rent and cheaper than my DCS paid at uni out of their loans over 10 years back! Your mortgage must be tiny.

Where I live, the cheapest 1 bed flat is £200K. A 3 bed semi in a decent road is around £450K. The north is indeed very cheap.

The north is indeed very cheap.

Parts of it can be.

The £30,000 average is twice what I bring home, in a year I earn around £16,000 (gross)!
My wages go to support my family of 3, GF DD and I. I dont think we go without anything important. We seem to have everything we need and pretty much most of what we want.

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.

Well, yes. I used to earn 26k (£1720 a month) and my rent + commute (London) was £1000 a month. I still managed to save about £300 a month. I scrimp at every opportunity though, haircuts from Groupon, only buy things 2nd hand and get tap water when I go out for "drinks" (well, I don't drink tbf).

I am shocked at how you are "struggling" on your income - I felt positively rich on 30k once I moved out of London.

Many people living in London-style bubbles want to start provocative conversations about income in order to reinforce their sense of superiority. I used to live in the East Surrey/Croydon area, and it was full of very narrow-minded people whose only interest in life was the price of their house and boasting about their income. Of course they don't want to do this openly so they use proxies instead like "3 grand (net pcm) is nothing" or "you can't bring children up on less than a hundred grand a year" or "I thought x was on more than that". It is also the reason premium cars exist so people can create a perception of wealth. I now live in a much cheaper area of the UK. Apart from the fact people are much nicer here, I am mortgage free and have a better quality of life working part time than I did in a high stress London job, with the passive income from equity previously tied up in a house with a big mortgage. It all depends what your frame of reference is. If it is investment banking then probably earning less than £250k a year makes you relatively poor. If it is Warren Buffett and Jeff Bezos the net worth benchmark is probably around £100 billion. In the UK as a whole many people would be very happy with a £30k pre-tax income. In the world as a whole having more than enough to eat, entertain and shelter yourself makes you well-off.

I have the reverse of OP's problem, I don't understand how people CAN'T afford a decent lifestyle on these ridiculous 6 figure salaries. What are they spending their money on? BMWs? Private school? Pointless insurance for all their expensive things? A new kitchen every 5 years?

30k got me a nice 1 bed flat, exotic holidays and plenty to put in savings. As a person without kids, I could live on much less and still be comfortable. I know kids are expensive but every rich person I know who says how they couldn't possibly afford to live on a lower income - has made so many outgoings and a high-maintenance lifestyle for themselves that they've essentially built a rod for their own back. "Oh, I'll have to keep working till I'm 80!"......while getting an extension, expensive furniture and a new electric car.

What if you have a breakdown and want a low-stress PT job? What if you get sick of corporate life and want to retrain in something practical (most likely me)? Why trap yourself.

I think whoever said it's quite easy to drop loads of money on things other people won't notice is right. For things like food, holidays and decor you can essentially spend as extensively as you like (and can afford). So if you like expensive paint and you decorate a couple of rooms each year plus accessories that adds up, but nobody who isn't in your house a lot would notice. You might shop in tesco the same as your neighbour but choose more of the chilled pre prepped stuff, premium brands etc and spend twice as much. If both adults in a household smoke that can easily cost a couple of grand a year. You don't necessarily know whether someone's Spain holiday is five star or an air b and b with budget airlines, you're often going to be unaware whether someone's UK holiday is their auntie's caravan or Centre Parcs. Not my thing, but it's how some people choose to live.

It's the flipside to the fact that someone with things that used to be income signifiers like a posh car or designer clothes might not have spent very much on them.

If there's one thing humans are good at, it's that they ADAPT.

But it goes both ways: if we have less, we make do with less. If we have more, we will live in abundance. That is why there's such a wide range of responses here.

At the beginning of my career, some 20 years ago, I earned £15k... IN LONDON. That’s £24.8k now. It gave me a room in a flat share in a naice part of London, I never went hungry (sometimes ate out), I took the bus or walked, went to the cinema, the free museums... in short, I never felt I was struggling.

Fast forward 20 years later, and my OH and I earn over £100k gross per year. We can afford more, but it's not a land of plenty. Just like when I was single 20 years ago, we mostly eat in, but sometimes eat out. The difference is that we might be going to more expensive restaurants now.

You’ll find you can apply the above to other things, e.g. clothes, cars, holidays, etc. You still have much of the same things, but all the things you do / the things you buy are likely to cost dearer.

Wow! So you don't work, have a household income of over £100k, can afford to send your kid to childcare but are a SAHM, eat our every day, have expensive hobbies etc etc, but still "struggle"?!?!?
I find it impossible to comprehend that you could be so insensitive, ignorant and blind about the country you're living in. FFS get a grip and open your eyes woman.
And like another poster said CHECK YOUR PRIVILEGE.
Unbelievable. Really.

And maybe spend some of that spare time you've got while DC are in childcare to a) educate yourself or b) do some budgeting and realise just how many foreign holidays a year you could actually afford on that kind of income.

Sorry, me again.....this thread has touched a nerve.
What's your line of work when/if you do return? Not minimum wage I hope?

Actually I think this post is brilliant to highlight the differences in all our wages and living standards. I think anyone that can afford to pay their rent/mortgage, has heat, light, water and food when they need it, with a little left over for a rainy day/ issue that needs fixing is on an ok wage. Anything less and it’s a struggle.

Just seen this. Has this entered this year’s humble brag World Cup? How can the poor dears survive on 50k? The humanity! ROFLMAO.

@seabreeze I would say those people are comfortable and are living within their means. I'm sure a number of people would think my wage is paltry but I manage nicely.

I actually once knew a millionaire who thought he was hard up. To be fair, he'd lost a fair bit of money in the pensions scandal, so he didn't have as much money has he'd once had, but there was over a million in the bank.

It's a bit relative really. But OP has apologised and realised her mistakes, so that's a good thing. Every person educated is a step closer.

This thread has me wanting a good cry.

I earn now more than I've ever earned- at least double the UK median, but we struggle (debts etc). For someone to come on and post an OP like this makes me so incredibly upset. And the updates don't alleviate this, the later posts by the OP are worse.

Has she ever had a job? To be so blind to the stress and poverty suffered by much of Britain's workers (despite working so damn hard), to actually think benefits must be generous, to be so wilfully ignorant, just makes me weep

Where you live makes a big difference to how far your money will go, but because of the disparity caused by this it also has a big impact on social mobility. The sort of property you live in also makes a big difference to how well off you feel and how much disposable income you have.

Also these figures are before tax, as a rough guide for incomes after tax and NI:
£16,000 => £700 income tax, £884 NI, leaving £14,416
£40,000 => £5,500 income tax, £3,764, leaving £30,736

This is based on an individual and so how the household income is made up has an impact, two earners on £16k almost have less than £1k difference after tax as a household with a single earner on £40k - although for couples where there is only a single earner they can in theory make use of the £1,250 marriage allowance offset, but for single parents and unmarried couples that obviously isn't available. I'm not sure how many people would know about this or claim it either, I only do as I'm self employed. It also doesn't take into account things like pension contributions which would usually be based on a percentage of income.

After income there will be certain regular costs, the biggest of which will be accommodation. Location and whether you rent or pay a mortgage and when you bought will have a huge impact.

As a guide the first house I bought back in 2004 was in Reading and a 3 bed terrace - it was on the market for £166k and the mortgage then was around £700 a month and it was among the cheapest of properties in the area at the time. Now to by a similar property there would cost about £250k and the mortgage would be about £1,000.

A similar 3 bedroom terrace in Lancashire to buy now would be about £150k and the mortgage of about £540 a month. And I remember from looking in 2004, as we'd considered moving up there, a 3 bedroom terrace used to be around £90k but can't remember what the mortgage would have been.

I think in both cases for equivalent rents you could expect that to be the monthly mortgage plus 20%.

Travel can also be a big factor, commuting into London from Reading daily (with underground) is £5,468 for an annual season ticket at current prices, I believe it used to be a couple of thousand cheaper when I first started doing the commute. Buying and running a second hand car may not that much cheaper by the time you factor in fuel, insurance, servicing although that will be influenced by how long you keep it. And again depending on where you live and work both may be necessary.

So if you got on the property ladder a long time ago, can walk to work, and live far from London (typically) the same income may well go further than if you're young or rent, live in a more expensive area, or have to go further afield for work.

Also it is worth noting there is a difference between mean and median - so when you say average, if you take that as the mean that average is skewed upwards by the very wealthy, whereas median is essentially the middle number so 50% are above and 50% are below.

That means even by the most generous measure 50% of people survive on less than £30k household income sometimes significantly so. And that can have a significant impact nationwide as it can mean a reliance on food banks, choosing between eating and heating, and leave people stuck living with family, where they can afford, or where they are given accommodation sometimes unable to live near family and not having the option of moving for work or better paid work - and again that creates a big social mobility problem and will tend to disproportionately affect younger people, or those renting, and in low paid jobs.

Perhaps next time you're in the supermarket you could buy a couple of extra tins of tomatoes or a pace of rice or two and leave it in the boxes they often have for foodbank donations.

Found the ONS report I think the £30k figure comes from:
www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/householddisposableincomeandinequality/financialyearending2019provisional#more-about-household-income

In it it highlights disposable income, so it sounds like that figure is after taxes - not sure if that makes anyone feel better or not.

There is also some nice graphs on wikipedia, based on data that is a little old now, which highlights the distribution curve:
en.wikipedia.org/wiki/Income_in_the_United_Kingdom