Sorry, but £80k a year in London ^really is^ a large salary

[nickymanchester]

So I was just reading the "Unpopular Opinions" threads and I noticed more than one poster saying that £80k a year really isn't a lot of money in London or the SE.

What with being locked down again and not having much to do I thought I'd have a look at the actual figures as I had no idea which side of that argument is correct.

For full time workers who work in London, the median (average) pay is £39,500 (men £42,700, women £35,800).

If a person is earning £80k a year in London then they are on the 87th percentile. Although, if you're a woman that places you in the top 95%

(87th percentile means that you earn more than 87% of all people - ie you're in the top 13%).

Of course, areas of London are very different so I split London down as shown below.

The practical upshot is that, well, if you work in the City of London then I guess you could argue that £80k isn't necessarily a large salary.

You might even be able to get away with this if you work in Tower Hamlets. But elsewhere - not really.

.............................................75th.......Gender

Area......................Median...Prcnt......Pay Gap
City of London.....57,361....89,492....27.9%
Tower Hamlets.... 49,728....72,254....20.6%
Westminster.........43,597....64,038....15.7%
Southwark............41,948....59,816....11.4%
Camden................39,837....53,950....20.9%
Hammersmith......39,676....54,132....14.9%
Islington................39,312....59,587....8.1%
Lambeth...............37,866....55,458....15.3%
Hackney................36,748....46,540....9.4%
Waltham Forest....35,651....45,552....23.5%
Hillingdon.............35,183....52,390....5.5%
Lewisham.............34,913....46,608....-2.5%
Brent.....................34,866....48,064....8.5%
Hounslow.............34,809....50,528....5.2%
Richmond.............34,726....47,070....25.4%
Kensington...........34,445....47,242....4.4%
Croydon................34,086....45,146....18.8%
Havering...............33,821....46,249....-15.0%
Greenwich............33,181....45,427....6.0%
Kingston...............33,030....49,150....18.7%
Haringey...............32,812....44,840....-11.8%
Newham...............32,292....49,618....-1.8%
Sutton...................32,167....43,898....-2.4%
Wandsworth.........31,938....45,786....7.0%
Bromley................31,777....44,824....10.7%
Ealing....................31,418....45,001....-6.0%
Merton..................30,607....48,381....-11.0%
Barking.................30,482....39,988....13.5%
Redbridge.............30,306....45,157....-5.7%
Barnet...................30,092....47,362....9.3%
Enfield...................29,895....40,586....11.8%
Bexley....................28,174....39,614....11.3%
Harrow...................26,998....43,077....17.3%

And for comparison with people outside of London:-

London.................39,556....57,975
South East............31,647...44,704
Scotland...............30,820....41,855
East.......................29,895....41,449
North West...........29,099....40,820
West Midlands.....28,730....40,186
East Midlands......28,704....40,004
South West...........28,605....39,645
Yorkshire...............28,023....38,865
Wales....................27,966....38,392
Northern Ireland...27,487....37,903
North East............27,113....37,872

All figures are ONS latest 2020 figures extracted from NOMIS. Gender pay gap is for full time employees only.

I was a lone parent of one child, I was paying rent in N1, saving a deposit, paying for childcare and a yearly holiday.

When you say ‘were’ - when? Why the past tense?

@SimonJT
I doubt that very much. For me, the nursery cost was £2800 (the cheapest possible for two under three), and the rent £1200 (again, it was quite a shitty flat with an hour of commute). That is almost all of £80K gone, you would be in the rationing mode after that with ~£500 left per month for food, bills, council tax and transportation.
I cannot see how someone could do it cheaper than this, unless they got housing or childcare for free.

@Buddytheelf85

I was a lone parent of one child, I was paying rent in N1, saving a deposit, paying for childcare and a yearly holiday.

When you say ‘were’ - when? Why the past tense?

I bought my flat in April 19, I had been a parent for almost two years at that point.

[quote emptydreamer]@SimonJT
I doubt that very much. For me, the nursery cost was £2800 (the cheapest possible for two under three), and the rent £1200 (again, it was quite a shitty flat with an hour of commute). That is almost all of £80K gone, you would be in the rationing mode after that with ~£500 left per month for food, bills, council tax and transportation.
I cannot see how someone could do it cheaper than this, unless they got housing or childcare for free.[/quote]
Nursery wasn’t £1,400 for me, preschool was also a lot cheaper than his time at nursery. I also work part time, condensed hours over four days.

I also had £0 communiting costs, whereas for others this can easily be £5,000 per year.

You'd need to be both earning that amount to consider buying a family home in most of London. It's not an incredibly high wage in London

and that's the point. For 25-year-olds 80k is fine - particularly as they will expect to be on 200k by 45. However, if you are 45 and this is the most you will ever earn, have a family and you are the main breadwinner with two kids then it's not much, especially if your partner is working p/t as many people do once they have kids.

and to all those saying - yes, you can buy a house for less than 600k case - of course, you can but it's crazy to think that someone who earns 80k should be considering areas that have traditionally been considered stabby ones or out of school catchments.

@SimonJT - our very boring nursery in London is 2k for 5 days before kid turns 3 and 1k for 5 days thereafter

£80k is a lot if it's one salary of a two salary household. But not a huge total household income - certainly not on the poverty line or anything, but compared to what a £80k salary could give you in lifestyle terms outside of London, it's doesn't go as far as it sounds like it should!

It's a good salary but not a huge salary for London. Also depends on where in London you are based.

There is £1,333 difference p.m in the take-home earnings of two parents who earn 40k each and one earning 80K.

40% tax makes a massive difference.

I guess you might make that up if the 80K earner was coupled with a SAHP to save on nursery fees.

And it is such a bummer for those who just edge in the 50K per year...gah!

For those who say SE London is cheap, have a look at Greenwich and Blackheath. Also Chislehurst is very expensive in parts, I am looking there and just saw a flat for a little under a million (out of my price range). There are cheaper parts of course but if you want to live somewhere really nice and picturesque, which is not unreasonable, you will have to pay a lot.

I'm glad we bought our house in 1984.

@Katjolo

It's a good salary but not a huge salary for London. Also depends on where in London you are based.

I'm sorry but it really is a huge salary for London - especially if you're a woman.

I'm comparing this to all full time workers who work in London.

What are your comparators if you don't think that £80k is a large salary?

It sounds like there are different conceptualisations of what criteria would mean that 80K is a large salary. It clearly is at the 87% percentile in London and even higher compared to UK salaries overall. But some people say it's still not a large salary as nurseries and housing is so expensive in London. I guess I see it a bit differently as I know lots of people who commute into London (1.5 hour plus journey either way) because they don't want to live in the small place their salary could buy nearer to work. They don't earn 80K so don't really have the same choices as the wealthier folk who do. I can see that it doesn't buy you a detached 4-bedder in a lovely area, or indeed a detached house anywhere in London but I personally don't think that makes it not a large salary when so many other people have to find ways to live off less.

OP, maybe that’s why they posted in the “unpopular” opinions!!
I think it’s a great salary unless you’ve already spent it. But if you really had to, you could pull your DC out of private school, move to a cheaper area, shop at Aldi etc and still be able to go on holiday.

Might be worth remembering the reason that this was originally debated. Labour party proposals to increase tax on the top 5% of earners, being people earning £80k p.a. It was clearly set out at the time in the manner of an "us and them" policy where anyone earning over £80k was set-up as "rich" and hence the "bad guy".

The £80k did statistically put you in the top 5% of earners and so a lot of people seem(ed) to think it buys a big house, Champagne for breakfast, chauffeur driven Bentleys and flitting between the ski slopes of Switzerland and the golf courses of the Algarve. This is simply not the lived experience of people with an £80k salary in London and the SE but they are still in the top 5%.

It’s a huge salary compared to most people you see doing their jobs in London. Come out of your house and walk down the street, pass a street sweeper, a bin collection, a bus, a mini cab rank, pop into a newsagents, go to pret, stop at a chemist, go to the station, walk past a college/school, make an appointment with the receptionist at the drs surgery, stop for a pint after work, go to a restaurant, have an electrician come to fix your light...I bet none of those normal people doing normal every day jobs earn £80k. Yet, they live in London. Like lots of Londoners are.

@Tier10 and @LilMidge01 points some up OPs point.

Surely this is not too hard to understand. And no not being a smart arse as trying offer an explanation.

So approximately

If you earn £80,000 gross a year, you'll pay £19,500 in tax, and you'll take home £4,587 every month. You will have to pay £19,500 in tax, and you'll also have to pay £5,460 national insurance.

£80k gross annual salary is rightly high as the comparable statistics indicate.

However as high as this salary is - it is still not unfortunately high enough to be able to be located in central London if you are to buy a property in a desirable location and quality to reflect your job status.

It is of course a high income with more relative spending power outside of central London etc where cost of home ownership and rental is very different. Housing being the main income expenditure deducted from your income unless you live with family etc. Naturally £2k per month private full time nursery fees or schooling fees per child is another major consideration to be accounted for in addition to other living costs.

Basically it’s great but not in a unusual rip off central London home ownership context! Hence so many need to make do with a lot less and far and wide commuting in on over priced poor quality public transportation. Pre Covid pandemic of course as now WFH supposedly.

I do agree with you op, but some people also seem a little unrealistic in how far money goes. I remember someone on here saying they thought a £70k salary meant a sahp, children in private school, 2 new cars every few years and a few luxury holidays, hair and nails done monthly too. Which as for someone from the SE sounded hilariously uninformed. That’s just over £4K per month without any pension contributions. A £1500 mortgage, £500 fares, £500 in bills and council tax, £500 would only leave you with £1k to cover the other things. The local private schools are £1k per month. Then you’d need extras etc. Car repayments are god knows how much. A mediocre all inclusive for a family of 4 for 2weeks in the holidays would be about £4K.

While I’m not saying any of these are human rights or necessary, you’d not be able to afford it with one person on £70k. All my friends with that set up drive 1 oldish car, send to the local school, rarely eat out and go on eurocamp style holidays. Which is perfectly fine and lovely. Just not the height of luxury some would perceive.

@tellytubby20

and that's the point. For 25-year-olds 80k is fine - particularly as they will expect to be on 200k by 45. However, if you are 45 and this is the most you will ever earn, have a family and you are the main breadwinner with two kids then it's not much, especially if your partner is working p/t as many people do once they have kids.

and to all those saying - yes, you can buy a house for less than 600k case - of course, you can but it's crazy to think that someone who earns 80k should be considering areas that have traditionally been considered stabby ones or out of school catchments.

What planet do you love one where 25yr old are earning £80k and then by 45 they are eon 200k. Thats either some very niche jobs but its not the norm!

I think this is showing that individual salaries are only part of the picture of houehold income and are only a small part of wealth. So it is clearly a large salary because most salaries are smaller so its silly to argue otherwise - but the other aspects are very variable and can have an impact on peoples experiences with their large salary.

but it's crazy to think that someone who earns 80k should be considering areas that have traditionally been considered stabby ones or out of school catchments.

That’s so funny. People consider areas they can afford regardless of what they earn or how much better they think they deserve. I grew up in Chiswick and Shepherds Bush and Acton were pretty rough (still are in parts) I doubt anyone on £80k could consider buying there.

Its a high salary, London or otherwise. But it's not a high enough salary to live a particularly lavish lifestyle if you have a family and it is your main household income. That doesn't mean its not a good salary. I think it is the kind of level that allows for privileges that probably don't seem special if you have them, but if you don't it seems amazing. E.g. the capacity to save a bit, to get takeaways or go out for dinner without having to save in advance. Not worry too much if your boiler breaks. Etc. When you are comfortable financially its really easy and understandable.to lose sight of the fact that many people don't have the same sense of ease. It doesn't mean that you are unfathomably rich, or that you can buy whatever you want. Its just a bit easier. My DH and I both have good salaries and we have a comfortable lifestyle - old car, 1 holiday a year (not in a hotel, rental or camping). We don't feel 'rich' at all, but we have the capacity to save for the things we want and it not to be unattainable. when I was a kid, things like a car, holidays, weekly takeaway etc - they were completely out of reach, saving or not. So to me back then, I would have said that future me is absolutely loaded.

There are few parts of London that aren't 'stabby' ones in reality. Or if they're less 'stabby' they experience more crime of other types.

@cyclingmad - honestly those 25-year-olds who earned 80k - are now on high 6 figure sums now....most 25-year-olds don't earn 80k. those jobs that pay 80k at 25 - pay a lot more by 40. is that not your experience?

now most 25 year olds dont earn 80k - but thats not the point