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

The "cost of housing" argument collapses
when you realise that only 1 in 20 homes are sold in any year

millions of us are unable to move because of property prices
so our outgoings are low
but we can never move

My house cost me £60,000
Next door just sold for £350,000
Not in a million years could I afford that

My parents house cost them £6,000, long time ago obviously. Worth about £350,000 now. They were paying around £200 a month up until they'd paid it off. I, having not been on the property ladder for so long was paying more than 3 times that for something half the value.

Just being on the property ladder makes such a big difference as it means you can build up equity, I think something like 40% of people are in some form of rented or social accommodation. But even once you're on the property ladder its a bit of a lottery - if we had decided to move up north when we first bought we would have been unlikely to have ever been able to afford back down south now.

My parents bought their one house in 1961 for £6500 but that was a massive amount compared to their salaries, they had to put off babies for 10 years to buy and had two full time working professional salaries to buy it and of course a mortgage. It was not easy.

I agree with Outof S that it takes a while to build up equity. However remember many of us have done the opposite at times! We sold our last house int eh 90s property crash at less than we paid for it and I think all 3 of my older chidlren's properties will now be worth less than they paid for them as prices are not going up in London at the moment. So it is always a questino of do you want to rent or do you want to buy, pay in some case in London the quivalent of a year's rent on stamp duty to buy and also perhaps lose 5% or more a year as hte property drops and drops. Property buying in a sense is for risk takers. it is not a sure fire winner one way bet.

@Xenia but it is ... your mortgage will ALWAYS go down, staying in the same property.., your rent will always go up... so even with no equity, eventually you’ll be mortgage free. That is definitely a positive risk I’d rather take!

I am a risk taker anyway so I agree and I always say to people buy as soon as you can.

However does not always go down. At one point I had an interest only mortgage traded in currencies and it went up hugely as the currency trading did not go well! So the capital sum got higher. Also those with interest only loans - it doesn't go down.

I agree that in other cases each month you are paying off some capital even if you have chosen a 30 year loan as more and more people are doing and even if you don't do a remortgage to take equity out.

By the way in about 1971 my parents did a remortgage and that 1961 mortgage got a lot bigger because they built 2 rooms on the front of the house).

I am certianly in the "jam tomorrow" school of thought - take a lot of pain now (those few lucky enough to have spare cash to save up a 5% deposit on a studio flat or whatever) to buy as you then get psychological security of your own home, stabilty etc even if it drops in value. And our 1990s losses on the last house (and two buy to lose flats we sold then for abhout 50% less than we paid for them) we painful but we did have some equity and put that into our next house which did go up in value (although it is now dropping in price [ and presumabhly Labour plans to slapo a £30k a year land tax on it too to add to my £3600 a year council tax] but that's fine as I hope to die in it in 20 or 30 years time)

Between my partner and myself we earn 21k - year (he works Monday-Friday I work sundays) and we've got everything we could want

And then there are people who are sick and disabled living on £3900 a year. Some of the poorest and most hated people in the UK.

My parents would have bought for £6,000 in the 70s, they'd have been less than 10 years old in 61, and my mum was a seamstress before becoming a stay at home mum and my dad a factor worker and apprentice electrical engineer so fairly working class. They'd rented a bit before that and lived in a caravan for a while before.

Not sure I understand how the mortgage got bigger by adding 2 rooms? Normally that'd it would reduce it because because of the improvement in the loan to value ratio. For example if you have a mortgage of £100k on a £150k property you only own a third of it, if you increase the value to £200k though home improvements your loan is still only £100k so now you own half which generally gets you a better rate - unless you borrow on the mortgage for improvements that is.

But as I said it is a lottery - interest only mortgages are generally a bad thing for most people in my opinion, my parents had their own issues with that as they had an endowment mortgage initially which is essential the same thing.

If you're lucky you'll buy or upsize during a recession and downsize when the markets are good - but we can't always decided when we have to move like that, particularly if you're the one losing their job due to recession.

@Xenia to have had 2 buy to let flats, and having what sounds like a pretty expensive property to be paying that much council tax (that's got to be band H surely) you don't sound like you've done to bad regardless of the markets and your investment decisions.

The first house I bought - for £30k is now "worth" £95k
THe second house I bought - for 59k is now "worth" 450k
my current house cost me 60k and is "worth" 400k

the housing ladder is a localised PONZI SCHEME
ramped up by valuers and lenders
its all a con
no house is worth more than it costs to rebuild

Average wage for us. I work part time as I’m disabled and hubby is mine & my daughter’s carer so only works 10 hours a week. Our mortgage is £1.4k a month.

On my parents adding the rooms - well obviously their 1961 mortgage became bigger as they borrowed more. I am not sure that is the same issue as when and if property improvements add or lose value on a property and I am sure it helped the value rise although their house was in NE England so not like houses in inner London. They both died (literally) in the house about 50 years later.

On this "@Xenia to have had 2 buy to let flats, and having what sounds like a pretty expensive property to be paying that much council tax (that's got to be band H surely) you don't sound like you've done to bad regardless of the markets and your investment decisions".

Yes my current house is band H. I have certainly not done too badly for someone who worked full time since 1983 without a break (used 2 weeks of annual leave for babies even - not sure all women would do that). The main reason I am lucky though is I never seem to be ill physically or mentally. Nothing can be priced higher than hat.

On the buy to "lose", as I call them, flats which we bought in the 1980s we even took out a 13% interest rate bank loan on one fixed for ten years. t seemed like a really good deal as our other mortgage was over 14% at the time.... then interest rates dropped but we were stuck with the 13% rate. Ouch. I am probably London's worst property investor/home owner in terms of "making money" not that money really matters... then add to our mix my husband getting about 60% of our assets and my life savings, all investments and then giving my pensions to the children for housing and I seem to have a great ability to take myself bck to zero every few years EXCEPT and it is a massive exception I do own my house which after 30 years has no mortgage on it and hat is a massive chance as ove rmost of those 30 y ears our biggest expenses by far have been either housing or full time childcare costs. At one point my interest only mortgage cost £90k a year and i was over drawn with no savings and a mortgage that was growing in capital terms and a house probbably lsoing value - I am not even sure it has returned to the valuation it was at at our divorce in 2003.

This is no woe is me story. I am happy to work full time until I die and life is very good and I own a house which is more than most people have ever done in my family - I have been tracking ancestors back to the 1700s and most were poor as church mice.

It's not just that you have been so fortunate with your health it's also that you are prepared to take on great risk

I am utterly crap at that and dh is even more risk averse than me. Currently we're aiming to pay our mortgage off in 10 years but crucially THEN we're too old to take out another mortgage to buy a second property) to replace a pension which I don't have/income in old age etc)

Whereas NOW we're young enough to buy a second property/pay a mortgage on it but are too risk averse to do it

Most of my risks have gone wrong though... laughing as I tupe... the two "buy to lose flats" in the 80s, the fixed 13% interest rate that was sucha good deal, my £1.3m interest only mortgage traded on the currency markets.

What a lovely post @poorlymatchedsocks

Well this just highlights the problems in this country
Middle class bubbles, nmw and food banks

My husband earned over £200k a year, still thought he was hard done by, I kid you not

I've just been made redundant. I am currently trying to live on £317 a month, Universal Credit. It's actually less than that, after I've paid all my bills. I'm a single person and have worked since I was 16. I eat, once a day.Sometimes, I don't eat at all. I am accruing debt, which I've never had before, because I can't afford to pay everything I need to pay. I'm not complaining, it's just a fact of life, and I'm doing everything I can to change my current situation. I will not be in this this circumstance forever. Life changes, and I will embrace those changes, when I can, and when I can make those changes happen. I refuse to be in this situation for longer than necessary. So there. Nur. :)

That sounds very difficult, chrisie. it sounds like there are not many jobs near where you are. We are faily lucky here - almost labour shortage at times, even notes on shop windows about vacancies which I have not seen since the 1970s.

Hi , I’m thinking in moving to Teddington, we are family of three with a LO ( 4 y) . We will still to commute to Waterloo. Please anyone there who can help me with advice about Teddington, good areas , what to avoid, streets, river, playgrounds, is the neighbourhood safe? Etc thanks in advance.

I live in Surrey / south London border. One of my friends is on under 30k basic salary (it’s more like 40k with overtime). But she’s single, another single mum friend is on 34k. I’m a single mum but fortunate to be on over 40k but I still can’t afford to buy a property around here.

My friends in my native north wales are on a lot less. But even still the only ones on under 30k are single mums, rest are on over 30.

Wtf?

DP and I manage on combined 30k per year in central london. We have an average of 3 holidays a year.

@Ingatilda suggest you start your own thread, rather than resurrect this old one.

My family is on an income of £30,000 a year. We rent, in the south east of England, so sky high prices, we budget our food, can't afford extortionate childcare fees so I stay at home during the day and work evenings (although currently on maternity leave), we don't claim any benefits other than child benefit, we don't have many luxuries but we manage. We pay our bills, my partner has his car, he buys himself new things occasionally and our children have treats, when I am working a bit more I will be able to afford some things fornmyself hopefully, but we will likely never be particularly well off.

he buys himself new things occasionally

And you get nothing until you go back to work? Wow

I am a part time teacher on £22k. My dh is on £28k. We have 3 kids, 2 in childcare. We do fine. The people you know, OP, are minted.

DP and I manage on combined 30k per year in central london. We have an average of 3 holidays a year

That's either an exaggeration for comic effect, or you've neglected to mention that you have no housing costs. Otherwise you'd be paying most or all of your combined £30k on rent/mortgage.