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 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).

Exactly.

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

When did you buy your house? My manager has a 6 bed worth 2m, bought for 60k mid 80s.

80k doesn’t go far and you cannot live off it here unless your partner also has a good salary. My rent is 2300, nursery 1600 x 2, council tax 250. Do the maths!! It is all relative. I can’t afford to buy on this salary.

ResIpsaLoquiturInterAlia

The people I know with those salaries & in finance, law & tech.

www.efinancialcareers.co.uk/news/evergreen/pwc-deloitte-kpmg-or-ey-which-big-four-firm-pays-the-most

** https://www.google.co.uk/amp/s/amp.ft.com/content/e6132db6-abb3-11e9-8030-530adfa879c22*

I'd also be interested to see those wage numbers for london adjusted for age. There are a huge number of low paid young people in london working in retail, restaurants, bars, theatre, and the lower rungs of corporate roles.

I'm willing to bet that if you adjust for only people over 30 living in London not only working there, the median for london will be considerably higher. People on lower incomes often leave London to start a family, so in higher age brackets you are left with a far greater % of the people earning more.

I think that's what people on here are getting at, of course it's a decent salary for someone with no dependents but it wont stretch far with family costs.

@rolliy we put in a 20% deposit on a 245k flat. Took us 6 years to save for the deposit as we did not want to have a big LTV. Put in new kitchen immediately after moving in and have been doing some other minor stuff around the place since then as well as buying furniture mostly from scratch.

We were on less than 40k combined until a little over a year ago. We are now on 50k combined.

We have been working hospitality and similar for the majority of this time. We actually both started out working in hotels getting paid £7.20 per hour. We do not live large but we are comfortable, by our definition.

There’s a lot of analysis out there looking at the top 1% the variation across regions by ages/sex etc explains why people feel like 80k isn’t a lot in london.

From This Is Money:

“ The hardest age bracket to make it into the 1 per cent for both sexes was between 45 and 54, where men needed just over £300,000 and women about £140,000.

The location where you can make the 1 per cent with the lowest income was Wales, at £100,000, while in the South East people needed £200,000 and in London just over £400,000.

Again this will explain the phenomenon of people in London and the South East, who are by national standards very high earners, on perhaps £90,000 a year, but don't feel like they are when they look at the lives of some of those around them.

The most extreme example of exclusivity is for men aged 45 to 54 in London, where £722,000 was needed to make the 1 per cent club.”

www.thisismoney.co.uk/money/comment/article-7357395/Who-1-Britain-one-them.html

@Ihatemyseleffordoingthis

Both of these things are true:

London housing costs are outlandish

80k is a materially very large salary

Also true: anyone who thinks "its all relative" is someone uncomfortable with acknowledging the reality of their privilege

This.

@icedgem85

80k doesn’t go far and you cannot live off it here unless your partner also has a good salary. My rent is 2300, nursery 1600 x 2, council tax 250. Do the maths!! It is all relative. I can’t afford to buy on this salary.

Do the government not assist you? With childcare costs and your rent?

@icedgem85 your total comes to around £5,750. Is it really worth the 2 sets of childcare care fees. This is what our food and other bills.

@Twobecomingthreeplusthedog

Like I said, people come across very jealous.

A salary calculator allows you to make deductions for student loans and pensions which you clearly assumed neither of us had.

Yeah, we do get by. But we also have luxuries because we work hard for them. I’m not sorry for that but people on 20k seem to have this warped sense that people on 80k must be rolling in it, when they aren’t.

You haven’t even considered that someone on that salary may have to commute to central London with railcards (at least 6k a year without station parking) plus wraparound care for kids. In your fantasy world we all must be flushing 50s down the toilet for fun.

I have student loans, a pension and the same commuting cost as you and am still comfortable on less than half your salary

@Chel098 "Do the government not assist you with childcare costs and rent?" What? Who on £80K salary is going to get benefits? Or are you being sarcastic and it doesn't cone across in print too well?

Also, "Is it really worth the childcare fees?" So what do you do if you have 2 kids, live in London and work? Sell one or both children on eBay because childcare fees "are not worth it"?

£80k in London in upper middle class circles is not a lot. Of course you can live very well for less than that in London and of course, MOST people in London don’t earn that much. But if you are in a particular social bubble then no, £80k is not a lot. In our cosy London suburb, most of the parents in my child’s class at their (state) school earn six figure salary. I base this on their jobs - partners in city firms, GP’s who are partners, big media jobs etc.

It’s all relative to who you know. There are some parents who definitely earn less, but they’re the minority.

@gwenneh

I'm not denying it's a good salary, or a high percentile income. It just doesn't go very far in London.

Our outgoings looked very similar to the breakdown another poster created -- childcare and rent ate such a large portion of it, it became impossible to save.

This.

Pointless question (and answers) without specifying whether the £80k earner lives in London or just earns there, and whether the earner already owns their own home.

The i newspaper had a real life case study the other day - a single parent voluntary sector worker on less than 30k a year. No credit cards, no debt, even manages to save a bit every month. How does she manage? Turns out she lives in a virtually mortgage free £900,000 four bedroom house on Tooting that she and her husband bought years ago. First got on the housing ladder in the 1980s.

Owning (or having council tenure) in London is a game changer - it’s the difference between 80k being a struggle and 30k being comfortable.

@Autumnterm 🤣🤣 those details often get left out & you get the "well I manage" 🤦🏼‍♀️

Council tax on its own is £200!!!

Mine is £315 per month and I’m in Kent. Everyone pays council tax.

council tax is pretty reasonable in London

And you get way more for it. When I moved out I realised how shit it was everywhere else for more money. Fortnightly bin collection, pay extra for garden waste, we’ve only just got glass recycling...

I have to pay for garden waste now & bin collection has reduced but I think it's still weekly.

Even though I’m an old dog I’m willing to learn from all of you on this thread. Firstly full transparency I am an ethnically mixed, non Christian Female aged 50++ and I am in the top 3% of female earners in London.

When I see or hear the term “privilege” for someone of my age (and this may be where I am making a mistake) it brings to mind a person who is usually White, had significant financial resources from family or others to go to the best fee paying schools with no debt, lots of opportunities and perhaps even family “connections” as well as perhaps help funding a residence in London or anywhere or maybe even being given a residence. Maybe even a business etc.

This was not the case for me. My father died when I was 13 and my brother 11. My mum worked a weekday job and took in ironing (it was a different time then). We went to state school and came home to an empty home using the key we wore around our neck under our clothes.

The best gift my mum gave us was an insistence on academic excellence, hard work always and that to succeed you must persevere.

I spent 14 years at university paid for by
Academic Scholarship
Loans
Financial Aid
Working part time throughout the year
And a small scholarship based on my heritage

I was able to achieve the advanced degrees I pursued. With that came an astonishing amount of debt I finished paying off at 43.

There is no massive house or fancy car here.

I’m in a “profession” but a helping one and over the years I have often wondered if I have secured professional roles due to my achievements or because I am a “diversity” candidate. At this point it doesn’t matter.

As I was reading all the posts late last night I had to confront myself in my stage of Jungian Metanoia and unpack if it was all worth it.

In my empty bed, with no children or grandchildren I would say no. I’m not rich, and even if I was I have no one but my charities of choice to share it with. If I had a time machine to do it all again I would do university yes, but not to the level I did. I’d hope to get married and have children and a family to love and be loved by.

I'd get in a time machine & get out older so I could have got on the ladder in the 90s but hey ho.

Agree with @Autumnterm that Owning (or having council tenure) in London is a game changer.

Our house (small centre terrace) was bought in early 2000s in Zone 1. Since then it has increased In value astronomically (value circa £1.5m). Despite us both working in the city with good salaries if we were starting out now there is no way we would be able to buy it.

Yes people can buy in cheaper areas but the additional cost and time(!) spent travelling is a factor to consider. I grew up in Zone 4 (modest 3 bed semi now valued at circa £700k or £2,600pm to rent - recent valuations - that my parents bought in 1980 for £28k) a 20-30 min bus ride to a tube station which made travelling into Bank a minimum 1 hour 40 minute commute each way the norm. Most of my friends and family outside of London have always been shocked by how much time I lost commuting.

Mortgages on the whole are cheaper than renting. However, the issue is people cannot afford to buy and are then forced to rent.

By comparison my husband grew up in a similar house to me, but in Hampshire. That house is worth circa £320k. If we lived in that area, even on salaries of £40k each we'd be able to buy there so it is all relative.

Note:

1. am NOT saying £80k isn't a large salary. Just highlighting basic living costs are typically higher than outside London.

1. I am fully aware of how fortunate I am having come from a modest working class background.

It's a bloody good salary - I live in SE and worked in London on £28k, wasn't minted but happy I could get what I needed and wanted without worry.

If you arent comfortable on 80k you have serious spending issues! Probably Probably latest everything needs updating, private schools, labelled clothes, big house and posh car. Which if that's what you want to do, fine - but don't for one second cry about it being nothing when there are kids in London going hungry, living in bedsits with no electricity. 80k is well off and no chance of you going hungry so shhh.

Not sure if that is directed at me...if it is, my post agrees that it is a good salary.

@bemusedmoose

Tosh. You can’t live in a big house in London on 80k unless you inherited it, or you bought it 30 years ago.

And with private school fees at about 20k a year per child from taxed income, you won’t be sending your kids to private schools either.