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.

Also, LONDON is a very vague place!

London can include places as far south as Croydon these days.

Central London is out of reach for everyone other than the 6-figure earners and you need 2 of them.

I know a couple in their 30s who bought for £600K- a 2-bed flat Zone 1- and both earned over £200K.

I agree OP. However if you choose private schools as well of having the commitment of having an expensive mortgage then this is maybe how some people feel it’s not a lot of money.

Depends what you do too... you're right OP in that if you work in the city it would be considered to be quite a basic salary you may expect to earn as a grad, junior sales or in back office/support functions. Other sectors this would be senior management level pay for those at the top of their game. 80k will seem like a lot to some, but those at the bottom of the ladder in the city (I was one of them once) will be looking at their colleagues on 250k plus and having that as their goal. So it depends what your reference point is.

@Twatalert I agree. The house and the location looks quite nice!

Double the average salary yes, but essential costs are double too - at least. London's the most expensive place to live on the planet.

@GreenestValley

The issue is that in London salary is not a predictor of wealth in the same way it is elsewhere because of the insane ratio of house price: income.

The most privileged people in London are the ones who own their own homes - usually those in their 40s and older who bought when it was more reasonable.

The relevant point is that you have to be an incredibly high earner today to match the lifestyle of the average earner of yesterday.

I agree with this. Also people living in London are perhaps less likely to have family nearby to help with childcare, and that is a massive cost.

Nurseries don’t work for us due to our working hours so we have to have a nanny. That costs £2,500 a month. Our mortgage on a 3 bed in an area described as “up and coming” or “dodgy” is also £2,500. You’d need a combined income of £100k+ just to cover mortgage and childcare, never mind other bills, food, leisure etc etc. I am a high earner but I feel poor. It does make you question whether it’s worth it!

A few years ago I earned £80k in London and my then partner earned £25k. We had a very young child at nursery. We rented a small house in Zone 3 with a spare room for £1800 a month, had childcare costs of almost £2000 a month (nursery and wrap-around). We spent about £400 on TFL. Had bills for the house of about £350 a month. Food bills, including nappies and milk were about £500. We spent about £150 to £175 a month on lunch at work. I remember our monthly committed expenditure just to live and go to work was about £5000. We ended up moving out of London because we couldn't afford it - we swapped expensive nursery cost for train fares instead and managed to save enough to buy a house. So okay yes, it's a good sum of money but it doesn't go as far as you think it should. I remember thinking on £80k I should live like a king, but the reality is quite different.

@itssquidstella

If you compare the lifestyle a middle class professional family could have on 80k in Leeds, say, with the lifestyle the same family could have in London then you see that 80k doesn't go far here.

I totally take your point that London is an incredibly expensive place to live and it costs a lot more to maintain the same standard of life. But that isn't actually the point I was trying to make.

Regardless of how little you get for your money in London, a person on a salary of £80k working in London is one of the very highest paid full-time people (top 13%) working in London - and actually one of the top 5% of women working full-time in London.

There are a LOT of people in London working in the fig economy or on zero hours contracts, especially as there are such high numbers of foreign workers here who are easy to exploit. Those people bring the average salary down significantly.

And you think that doesn't apply to the rest of the country as well? There are just the same numbers of people working minimum wage jobs elsewhere as well.

By the way, these are figures for full-time employees only and part-time employees are excluded. If you were to include part-time employees then the median would fall from £39,500 per year to £33,200 and someone earning £80k would be in the top 5% and a woman would be in the top 1% of earners in London.

...the lifestyle a middle class professional family could have on 80k in Leeds

To take Leeds specifically. The median full time salary in Leeds is £29,800 (men £31,100, women £27,400).

75th percentile (ie top 25%) is £40,900 (men £42,600, women £36,900)

90th percentile (ie top 10%) is £56,000 (men £59,900, women £47,500)

So £80k puts you much higher up the scale in terms of salaries for those working in Leeds than it does for those working in London.

In Leeds you need to earn £56,000 to be in the top 10% of earners - in London you need to earn £87,200 to be in the top 10%

@SoupDragon

Excellent! More bitching about London. Just what we need 👍🏻

I dont see anyone 'bitching' about London. More a disbelief that people are really trying to argue their privilege and wealth by using London as an excuse. Money may not go as far, that's absolutely true, but trying to argue the point that it makes private education or buying in Zone 1 difficult is really the epitome of 'privileged mentality'. Are you really surprised the response is what it is? Especially when many people reading this are worried about making rent in the next few weeks, whilst their children go to a state school, sometimes getting the bus is too expensive, and the idea of buying a cheap 2 up 2 down in the most run down part of town would be laughable. To then read 'but we simply stretch ourselves to the limit on 80k' is quite offensive in that context.

Private School is not the norm for most London children. You only need to look at the uptake on school places to see this. There are higher rates of independent school attendance in some of the wealthiest boroughs, but across the many other boroughs there is often lower than average rates.

Anecdotally, I know many people on higher salaries in London, and only one of them uses a fee paying school, which I'm given to understand is cost paid by grandparents. Otherwise all the families I know that use private schools are based outside of London, but do work here.

This is why it would be useful to have a link to these figures, I would like to see more of the data about where it is calculated too.

You’re forgetting all the billionaires from Russian and things that keep buying up property. Which drives up the price

You've forgotten about the cost of travel (commuting) which normally is around £2K per annum.

I think it depends. £80,000 per year is about £4500 per month

Usually when you get to that point there are other deductions like pensions etc and it starts to reduce.
I know someone who was on £100,000 per year and by the time all the deductions had been taken into account he ended up with £4300

Also it depends on your home circumstances. You are probably more likely to have children which means you will be spending more on housing, food etc.

£80,000 is the equivalent of 2 people earning £36000 per year

I love zone 4 London near train station amd only 25 mins to central. My mortgage is £800pcm for a 3 bed house with a garden and driveway and in total after all bills ots £1300pcm

On £80k which is £4400pcm id have £3.1k left over, thats alot of disposable income for one individual. But even on my salary of £50k I still have £1.3k spare a month.

A snr manager in my team is on 80k has an adult child and lives in zone 1 and always moaning they can't save for a deposit. Sorry but thats ridiculous, when we haven't been back to the office since March and won't be for another 6 months thr smart thing would be to rent a bit further out for cheaper.

@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.

True. Especially housing costs.

Interesting that the breakdown would include mortgage and childcare but not pension.

Someone on £80k is likely to pay over £500 + a month towards their pension.

So add this on, even if you take childcare out, add transport and indeed there is little left.

Make it two salaries of £40k, each paying £300 towards their pension, childcare for two kids and indeed, you are left with nothing.

I think housing costs appear to be the main issue. In the midlands I live in a rurally located large detached 4 bed house, 3 bathrooms, WC, 3 receptions, utility double garage, large garden, large driveway with off road parking for 6-8 cars. Approx £900/month mortgage. Completely comfortable on our £100k combined income (£80k & £20k), even with one higher rate tax payer and 2x nursery fees.

If our mortgage was £2-3k it would obviously be a very different story and despite being a 'good' salary I can see how it could feel that the standard of living isn't reflective of the salary. I really feel for people in LDN on low-average salaries who have poorer standards of living due to astronomical housing and travel costs.

I do always assume though that there is more opportunity for much higher salaries in LDN however (in professional roles anyway and not including pay scaled roles like teaching/NHS). Is this a fair assumption? You hear stories of Grads starting on £100k+ and it seems like a world away from the opportunities of the midlands!

Thank you original poster as your researched ONS statistics make interesting reading.

However despite statistics, this is all relative and dependent on what your base line historically has been.

In the senior professionals City circuit many are still even with the pandemic on higher numbers. However with the pandemic that is a very respectable expectation and will help to pay some high cost of living expenses. But not schooling fees etc. This would as you no doubt appreciate cause issues with first home ownership as real estate values in central London reflect international and not just local demand and investment.

I think earnings overall will fall dramatically as it's all obviously supply and demand and that is despite Brexit immigration conditions.

Incidentally most doctors would be on higher pay grades once they done their initial year’s training on the job etc.

£80k a year is not really a salary that can afford private schools in London so not sure this comes into the argument whether necessary or not.

The thing about money driven people is they never have enough. They always want more, and will cry that the 80k they’re on is pittance. They’re best ignored

I think it’s a high salary for a single person but not particularly high if it’s the sole income to support a family in London.

80K is huge!

t basically depends on whether it's 80k each or combined. Each is fine, especially if you are young, no kids and dont care much about your pension. But if thats your toal family income then no it's not that much. Many people pay 2k in mortgage on very small houses etc. - on 80k you will struggle to buy a place in London - which simply is not the case elsewhere

The other thing to consider is the funny demographic of London e.g. many on low income may not live in London or might be young for example. It's a cliche by now that once people hit their 30s plus kids they leave....most of my friends did. Many then commute in - so their salary will still be counted as in London but they will be coming from further away.

I'm sorry it is factually incorrect to say "it is all relative"
80k is 80k. It's not 40k.

People paying money into a pension - or a mortgage - are buying things for themselves. Things that others cannot afford and will never have the opportunity to do.

It may not "buy a life of luxury" but why should that be your expectation? If you are on 80k you have chosen the life you lead, largely.

This stuff pisses me off because of the utter obliviousness of saying it doesn't go far because I have to spend it on all of these nice things.

I do think the moment housing stopped being about homes and started being about "investment" the world shafted the young though.

These PAYE figures do not take into account lots of city or execs who receive share options, dividends, rental or interest income, offshore partnership drawings, capital gains, etc. There are more of these type of people in London and more international/semi-international families in London. Anecdotally, all the high earning city types are in 2 camps: they live in Hampstead, Kensington or they live well outside London (Godalming, Somerset, Scotland...my CEO owns an estate in Midlands).

People also forget that not everyone in London/SE lives in a £1-5m houses. There are also more roadsweepers, council workers, retail workers, chefs, nurses, care home workers, nursery workers, corporate support staff etc of every profession you can think of, in numbers, compared to anywhere else in UK, given London's population density.

What is the actual point of these threads? Rouse anti London sentiments? Accurately define a middle class household in London? Guess the London make up and corresponding income behind the 7% who attend private school in England?