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.

£80K is a lot of money anywhere but it doesn't buy you a well-off lifestyle in London, at least compared with the rest of the country. I moved to London from the North East 30 years ago. I was lucky enough to get a high paid job and to be able to get on the property ladder in a central-ish part of the capital on my own as a young single woman. without parental help, in my late 20s. A young person from a poor background could never do the same thing now - in fact, I don't think I would bother trying to establish myself in London if I were a twenty something now, I would stay up North instead. Despite earning a high salary for all those three decades I do not live a lavish lifestyle (I don't have kids so have not paid school fees). I consider myself well off, but literally all my colleagues and friends are much richer, not because they earn more but because they come from well-off families. I am the only person I know without a huge invisible cushion of cash in the background. Back in the North East I suspect they think we are paupers because my DH and I live in a small house! I can only do my job, which I love, in London so there is no question of moving out and the place itself is so vibrant and interesting which compensates for the lifestyle hit. There is no doubt if I earned my salary and was in the North East I would be able to live like a queen - though I think it would be very rare to earn that much there. At some point when we retire we might move out and reap the benefit - at least there is that option. You can always move out of London at 40, 50, 60 whatever, but it's much harder if not impossible to move to the capital once you get a bit older.

Well my oh and I only have about 60 between us (before tax) and we have a 5 bed detached in a London borough... so 80 for one salary would be us living it up

@munchkinman

BF works in Central London as a carpenter and earns about 80k admittedly 10 hours a day. 40 per cent tax though and no child benefits for that. Has a small 3 bed house which wouldn’t be big enough for more than a small family. Only him and his son.

It’s only 40% tax over £50k isn’t it?

@bob1234bob

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%.

I think the reason that this is distorted is because the figure of the top 5% that Labour used was based on PAYE (happy to be corrected on that). It did not take account of those that are wealthy and not on PAYE (landlords, company owners, independent wealth, offshorers etc). so it has pitted people against each other. FWIW, I live in london on just over half of that and I feel relatively ok - but I don't have a mortgage or rent to pay.

I hate to say this but inevitably most of these disagreements come down to what you mean by good.

I agree you have demonstrated that £80k is a comparatively high salary compared to the average in London and elsewhere.

However, most people's definition of good includes what you can buy with it, which also heavily depends on the cost of living.

It also depends on your starting point in terms of student debt, family wealth and crucially when you bought your house.

All of these massively affect your outgoings and therefore how you experience that salary.

£80k could easily not go very far if you are spending a fortune on commuting and childcare, trying to meet the cost of housing, plus all the other bills besides. Before you get close to private school fees, which I would think unaffordable for anyone whose family joint income is less than about £200k.

That may be different elsewhere, I don't have the experience of that to know.

I am sure lots of people, particularly outside London will find that perverse.

Well it is a very good salary.
But the opinion was posted on the ‘unpopular opinions’ thread, so yabu to be outraged about it.

@PinkPandaBear why give up work? Countless threads show the drawbacks of getting back into a career after a break away.

"So my partner and I earn over 100k combined and we were unable to buy a house in London in an area where we would be happy to bring up our children, the house prices are just too expensive"

That is a very subjective measure though.

I know many professional couples similar to your mix of jobs who afford houses in Zone 3, for example, with good state schools, but that you would probably consider not suitable.

But then I would much rather live in my fairly edgy area of S London than Maidstone.

Unpopular opinion, I live in Reading and earn just over £80k and even with a partner on £60k it doesn’t go as far as you might think.

Yes we will be paying for a private school (cheapest is £11k a year from 3 years old..).

I think people forget how much you lose in tax every month so what you take home isn’t actually all that much.

Depends on circumstances, surely?
I earn £60k in London but I live alone, with no kids in one the lowest earning areas on that list. I feel quite fortunate, financially.
If I had two kids and a SAHP to support, even an extra 20k minus tax would still have me feeling pretty precarious.

Reckon on £25/30k per child per year for private school after tax in London.

"Unpopular opinion, I live in Reading and earn just over £80k and even with a partner on £60k it doesn’t go as far as you might think.

Yes we will be paying for a private school (cheapest is £11k a year from 3 years old..).

I think people forget how much you lose in tax every month so what you take home isn’t actually all that much."

LOL is this a parody account
You must just be scraping by on £140k pa

there are 2 statements in OP. First it starts arguing with the statement that 80K isn't a lot of money in London or the SE. And then states that 80K is above average salary.

Latter is clearly true. If this also means that this salary is 'a lot' is more subjective. So what are we arguing? Is it above average? Or will this amount mean you can afford a lifestyle people expect from someone earning 'a lot'?

@Twobecomingthreeplusthedog

Unpopular opinion, I live in Reading and earn just over £80k and even with a partner on £60k it doesn’t go as far as you might think.

Yes we will be paying for a private school (cheapest is £11k a year from 3 years old..).

I think people forget how much you lose in tax every month so what you take home isn’t actually all that much.

I live in Reading and my entire income is 20k. I'd be fucking rolling in it with that income!!!

80k is an excellent salary but even for London it does not go very far. The people who earn a lot less are well established as the biggest cost is housing.

Does it matter? once you are above the basic rate,you really are being bled try for tax.

That’s just how people on 80K justify voting Tory

I know of people who are on more than £80k but spend according to what they earn...which l think is fair enough..its entirely up to people how they spend their money..if they want to pay private school fees as opposed to buying a flash car then good for them! Outgoings are relative to earnings..by the way this family also shop in primark, poundland and eBay.

The thing is, many many people are insulated from the true cost of housing in london, the south east (and the whole UK really) relative to wages, due to housing benefit or the UC equivalent. 1 in 4 households in London receive it.

If you earn £80k in London, it could easily go like this:
£24.3k - tax and NI
£4k - pension
£12k - childcare for one child

So that's over half gone.

Rent (2 bed flat, modest area): £18k
Council tax £2k
Utilities: £3k
Transport (eg a travel card for zones 1-4) £2k
Food: £6k

That's another £31k gone just on your basic minimum expenditure - no clothes, no socialising etc, no gym membership, no mobile phone bill, no internet.

So you have £9k left, which is £750 a month. If you limit yourself to £500 a month for phone, internet, clothes, shoes, an odd night out, gifts, christmas etc, maybe you can save £250 a month for say, a flat deposit.

You would probably need around £50,000 deposit for a small flat in outer zones in london..... so on £80k on the budget above you would be saving for 16 years and 8 months just for the deposit on a small flat.

That's why people don't feel like it's a huge salary in London.

But if you have a child in FT childcare and still have as much as £500 a month for phone, internet, clothes, shoes, an odd night out, gifts, christmas etc. then you are waaaaaaay wealthier than most people. That's a huge amount!!

As the kids get older you will pay less in childcare so you can save much, much quicker than 16.5 years.

Honestly this just looks ridiculously out of touch.

"The thing is, many many people are insulated from the true cost of housing in london, the south east (and the whole UK really) relative to wages, due to housing benefit or the UC equivalent."

Yes, they must be all living the life of luxury on UC compared to people on 80k salaries.

Are you completely oblivious?

Yesterday 12:33 BrumBoo

Shoxfordian
I think people mean that 80k a year doesn’t necessarily go very far in London once they’ve paid their mortgage, paid for the bills and possibly private schools, etc.
Private school isn't a necessity, its a luxury. Saying 'my pay doesn't go far/cover the bills' means after paying for bills, housing (which even in London shouldn't swallow up 4.5k a month), essentials. I also find it a bit hmm when people say it doesn't go far in London - no wage will go far if you factor in expensive extras you want but don't explicitly need.

The idea that £80k would allow you to cover a mortgage plus even one set of school fees in London is ludicrous!

A very average small one bed flat is 4 times that.

Of course it’s a good salary, but you would have real problems getting on the family housing ladder from scratch. You might get shared ownership, but then you are wasting large amounts of money on the overblown rent and service you pay on top.

The housing situation in London is, truly, shite.

NoIDontWatchLoveIsland

The thing is, many many people are insulated from the true cost of housing in london, the south east (and the whole UK really) relative to wages, due to housing benefit or the UC equivalent. 1 in 4 households in London receive it.

Huh? How does receiving the housing element of UC mean I'm insulated from the true cost of housing? I still spend just under 50% of my income on rent regardless of where it comes from

What they mean is it doesn’t go as far as you think. I appreciate that on a scale it seems a lot, but the deprived areas of London and the increasing poverty for working families only go to confirm that 80 grand doesn’t go as far as you think.

@partyatthepalace bah ha hah you won’t eat your kids to private school on 80 grand a year 😂