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.

@dchange

£80k is not a huge salary in London. Let's break this down Monthly Salary after tax =£4400(approx) Rent or mortgage= £2,000 (assuming 3 bedroom) Kids nursery =£1,500 ( under 3) After care wrap up = £200 (over 5) assuming the child is primary school age Bills and food = £600 (feeding a family of 4) include electricity, council, gas, food. Council tax on its own is £200!!!

You are left with £100 at the end of the month for emergency.

Now, if you have one parent working and the other staying home then it's a good salary as you easily write off kid nursery and after care Wrap up for the 2 kids. Also you can shave off some money from the rent but I don't know many places with rent for family of three under £1,500 a month.

So it's all relative!

That makes no sense.

You are assuming that both parents work and one earns 80k and the other nothing. If both work and both earn 40k it leaves them with just over 5k after tax a month. But that is not the point here. I'm pretty sure the OP meant that ONE person earns 80k, so the other parent in your equations also earns a salary and your whole calculation goes out the window.

also @Twatalert - if there is one parent not working, they can do the childcare for early years. I guess for a single person it wouldn't go as far but then you may not need as large a house as a 3 bedroom, depending on the kids.

@dchange

£80k is not a huge salary in London. Let's break this down Monthly Salary after tax =£4400(approx) Rent or mortgage= £2,000 (assuming 3 bedroom) Kids nursery =£1,500 ( under 3) After care wrap up = £200 (over 5) assuming the child is primary school age Bills and food = £600 (feeding a family of 4) include electricity, council, gas, food. Council tax on its own is £200!!!

You are left with £100 at the end of the month for emergency.

Now, if you have one parent working and the other staying home then it's a good salary as you easily write off kid nursery and after care Wrap up for the 2 kids. Also you can shave off some money from the rent but I don't know many places with rent for family of three under £1,500 a month.

So it's all relative!

Your figures are a bit all over the place. Are you specifically talking about a family of three? In which case you could (knowing you live in expensive London) rent a 2 bed flat over a 3 bed house. Nursery is expensive, though if 80k is a single salary then either there is the option of a stay at home parent, or there is another income and more monthly for the family pot for nursery. Wrap around care for a singlar child reduces nursery significantly, so even with your most expensive output, it's only a real issue for a couple of years.

Quite honestly, most other families are managing food and other bills for a larger family on about a 3rd of an 80k wage. Housing is definitely the biggest cost, but that's the price of wanting to live in the city/have a tiny commute. It's a choice as much as any other.

@dchange

£80k is not a huge salary in London. Let's break this down Monthly Salary after tax =£4400(approx) Rent or mortgage= £2,000 (assuming 3 bedroom) Kids nursery =£1,500 ( under 3) After care wrap up = £200 (over 5) assuming the child is primary school age Bills and food = £600 (feeding a family of 4) include electricity, council, gas, food. Council tax on its own is £200!!!

You are left with £100 at the end of the month for emergency.

Now, if you have one parent working and the other staying home then it's a good salary as you easily write off kid nursery and after care Wrap up for the 2 kids. Also you can shave off some money from the rent but I don't know many places with rent for family of three under £1,500 a month.

So it's all relative!

This is a good breakdown. It is the mortgage and childcare that are the killers. Although, if you are not a single parent and need that much childcare, you would, as you suggest, likely have a second salary to play with.

I think you need to factor in housing. My semi, probs worth about 175K would be stupid money in That London, or even commuter belt. When I see them on tv, you are looking at probs double that, so double the mortgage costs = less disposable income, and in reality less available salary.

@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.

This. Ultimately it's why we left.

@peachcherries

It's not a great salary in terms of London wages

I'm sorry, but did you not actually read what I wrote?

If you're on £80k in London that means that you earn more than 87% of all people who work in London.

If, you're a woman on £80k in London then you earn more than 95% of all women in London.

And you seriously think that this means that It's not a great salary in terms of London wages ?

@Brumboo it's easy to suggest people are being picky and they have a choice to live somewhere cheaper, but I moved to London because despite the astronomical price of the rent compared to where I was living previously, the season train ticket to commute would cost even more.

Despite the price of housing, it is often cheaper to rent in London and not commute rather than to live elsewhere and commute. Season train tickets are thousands of pounds.

For me the difference in rent and travel would have been about £200 a month, plus of course 3 hours a day (1.5 hours each way).

I save time and money by moving to London. It still doesn't mean that it's not expensive to live there.

It's equivalent to around 55k in cheaper parts of the country so it is clearly good money

It's more than most people in London live on so it's clearly good money

Well it's more than 4x our household income, even though we are NW there isn't that much difference to warrant 4x the income.

[quote Lockheart]@Brumboo it's easy to suggest people are being picky and they have a choice to live somewhere cheaper, but I moved to London because despite the astronomical price of the rent compared to where I was living previously, the season train ticket to commute would cost even more.

Despite the price of housing, it is often cheaper to rent in London and not commute rather than to live elsewhere and commute. Season train tickets are thousands of pounds.

For me the difference in rent and travel would have been about £200 a month, plus of course 3 hours a day (1.5 hours each way).

I save time and money by moving to London. It still doesn't mean that it's not expensive to live there.[/quote]
I haven't denied the housing aspect is the most expensive or it's not more expensive to live in London. What I am arguing is that earning 80k shouldn't leave anyone near poverty, even adding children into the mix. Everything beyond having to pay for basics is a choice, and if you're struggling on 80k with just the basics of living, people will question how that's possible.

It’s a lot of money but £80k in London is not enough for private schooling!

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.

When people are talking about high or great salaries, they mostly mean that this will allow you to have a comfortable, maybe even slightly luxurious lifestyle. If you need to budget in supermarket, can't afford a house with enough rooms for everybody and can only afford weeks camping as your main holiday then that's of course normal and not poverty, but not exactly living like a queen either.

@peachcherries

It's not a great salary in terms of London wages. 40% tax rate plus expensive housing doesn't leave you with much. I would say it is comparable to earning £40k in the Midlands.

£40k in the Midlands is also a great salary.

2k rent for a 3bed is quite a nice area

Private schools are def for the well to do

So much is down to expectations

Enough rooms for everybody is vague for example

Do very young children need their own room? Do you need a guest room ? Rooms for the children you might have? some say absolutely, others know that's not true

If you think 80k is not a lot in London, what are you doing to help those surviving on half that? Has this affected your voting for example? Your charity giving?

Bills and food £600 a month. Surely it would be a lot more than that. What about transport, phone costs etc. You'd be really poor in London on 80k with the childcare and mortgage.,

Council tax on its own is £200!!!

I'm interested to know why you've put so many exclamation marks after the £200, do you think this is more expensive than elsewhere? Nine out of ten of the cheapest places for council tax are in London. It's one of the few housing costs that is usually more expensive outside of London.

Of course it's above average, but the problem is that above average doesn't get you very far.

My DP and I earn 100k between us. We are looking to move and can't afford more than a 2 bed flat with no garden. Our local nursery costs 15k a year. We can't justify running a car. I think we have an above average lifestyle in that we can afford holidays and to socialise, but I have a worse quality of life than my parents who live up north and retired at 50 from jobs earning 30-35k.

£40k in the Midlands is also a great salary.

Where I live, most people would consider 40k to be the height of living. Many I know don't get beyond much more than of half that. It's all relative, but there is a reason many people think anyone anywhere suggesting 80k 'is difficult to live on' is over-privilaged and quite ignorant of the realities of others (especially outside of the SE).

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

I totally agree that, compared to the rest of the country, London is a horrendously expensive place to live.

What annoys me are the people saying that it isn't a really large salary.

I’m a northerner and went to uni in London. I couldn’t wait to return to the north (no offence) I did really like London but it is a tough place to live, especially if you’re under 30. You will not get a good job or house unless you have rich parents and that is that. My family have some money and live in Richmond, therefore their kids were able to go to private schools and they could afford to do internships. If you aren’t that kind of person you will struggle in London and have to live in some questionable places. It’s sad coz the different cultures and experiences are amazing and what makes the place interesting. But then the prices get driven up and all the interesting-ness goes. (Obvs you can become successful without the rich parents but it’s fucking hard work and nothing like it was pre 2000’s).

You need to be on over six figures in London to contemplate sending a child to private school. Infact I will say above £200k annually if you are paying a mortgage. Now, if mortgage or rent free then anything is possible.

Again it's all relative. But the average family of 4 with one kid at nursery full time and another at primary school; with two working parents (full time) will simply be living month by month.

4 bed terrace, very nicely done up but in a not-posh area, not on the tube. No off street parking, let alone a drive, small garden.
www.zoopla.co.uk/for-sale/details/56238028?search_identifier=6dd435de081bfea5e30410ec03a3d634

No way we could ever have afforded that on our about-£80k Gross - combined salaries (i.e about £40k each).

And we certainly couldn't have afforded private schooling as well as a mortgage for our very ordinary scruffy house.