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.

It's all relative isn't it? I remember feeling well-off as a single person with a total income of £1000/m, with rent of a room at £425. I'm now married with a household income in the top 2% for London and I don't feel well-off, even though objectively we are. And we don't live a lifestyle that reflects our income - average car, cheap childcare, flat instead of house etc. I suppose the obvious very mundane point is that London attracts the very very very rich, so when you start comparing yourself to others you can easily feel less well-off than you really are.

If you were earning "a really large salary", you could afford to comfortably buy somewhere central with at least one more room than you need. I mean, why not? People in other cities always aim to buy a house with spare rooms - they never aspire to buy a tiny studio flat. Let's apply those rules to London.

Well, you need at least £550k to buy a small 2-bed flat somewhere in zone 1 where you won't get stabbed. That's nearly 7 x salary, before taking into account Stamp Duty, legal fees and the extortionate service charges you would get on a property like that, because leasehold properties (which are normal here) have a huge ongoing cost if they are shiny looking. I wouldn't call 7 x salary a comfortable ratio.

I'm not denying £80k puts you in a position of privilege (of course it does) but the heart of London is insanely expensive.

@Juno231

The only thing I'd question about the stats is the City of London confuses me. Only 8k people live in the City of London - so are those salary stats based on where people live or where they work? Presumably the former so the City stat isn't particularly representative of anything.

City of London refers to the place of work.

I work in the city, I can walk to work in 30 minutes, most of my colleagues commute, some from areas of London, others from as far as Peterborough and Grantham.

It's alright, but not great. As a single salary also lose child benefit and the free nursery hours.

As a previous poster said, the cost of housing is critical. If you have cheap rent or mortgage then it's alright.

The word median doesn’t mean average.

Although with remote working now a days and most employers will likely have a hybrid working solution post covid living centrally and being able to walk to work isnt really going to be the USP it once was.

Plenty of safe areas a short tube or train journey away and you get more disposable income

I have a couple of friends earning about that. Two of them have bought flats on their own over the past 2ish years - £350-£400k for a one bed flat. They’re not impoverished by any means but they still had to take out huge mortgages with 35 year terms to get on the ladder which takes up a fair chunk of income and they don’t even have dependents to pay for. (I moved out of London and bought at a more sensible price, but my earnings are more like the median and my friends wanted to stay in London as it’s where they’re from)

@EssentialHummus

It's all relative isn't it? I remember feeling well-off as a single person with a total income of £1000/m, with rent of a room at £425. I'm now married with a household income in the top 2% for London and I don't feel well-off, even though objectively we are. And we don't live a lifestyle that reflects our income - average car, cheap childcare, flat instead of house etc. I suppose the obvious very mundane point is that London attracts the very very very rich, so when you start comparing yourself to others you can easily feel less well-off than you really are.

If you're earning well over £200k, have cheap childcare, cheap (comparatively) accomodation, average car and you're not putting tons into savings, where is it going?

@saraclara

It's a good salary, but it doesn't bring the lifestyle with it.

My friend is paying £1400pm for a tiny flat over a shop in London. His open plan living room and kitchen only have room for the smallest of sofas and a bookshelf, and one of those tiny tables that even two people would barely be able to eat at. The bedroom houses the bed and a wardrobe but there's no room for anything else.

I don't know how people live on salaries of £30,000 there. I can only assume that some housing benefit is involved if you're not single. And cramped house-sharing if you are.

But anyone who's worked hard to get a professional job that pays £80,000 is going to want to have somewhere big enough for a couple and maybe have kids. And that salary won't even get them what half the salary would elsewhere.

(I've never earned more than half that salary, so there's no defensiveness in my post - I just look at my friend who has this intensely high-pressure job and barely has any downtime, and I think his salary is not worth it when he can't have a decent home)

If your friend is single can they not house share?

@Littlewhitedove2

It’s not really that huge. DH earns this in the city.

And from the figures for those who work in the City I think that you are one of the very few on this thread who can legitimately say that.

£80k for a person who works in the City puts you on the 70th percentile - or on about the 65th percentile if he just comparing himself to other men.

So, as someone who works in the city, your DH is really just earning slightly more than average.

nicky, looking at your opening post, you had no need to start it with 'Sorry'. You don't have to apologise for your opinions, we all have different ones.

I live on the edge of London and occasionally look at Rightmove because I might move house. Even on the outskirts you have to pay £600k for a decent three bed and that's if you're lucky. A one bed flat can be £355k.

I don't live in London but how can this be true if in 1 minute I can find this place?

www.rightmove.co.uk/properties/76537818#/

That house someone posted up thread - go back to the search and filter low to high and you get a 3 bed flat for £260k

Yes it might not be in the nicest area. It might still cost a fortune to get to your job. But the privilege of choosing a 4 bed house and pointing out it’s not affordable beggars belief. How much do you think the hospital porters and shop assistants get paid? Are they ever going to be able to afford to buy a home?

I love London and would love to move back there - my family are from there. But it’s unreal how it seems like people on a ‘not high’ salary of £80k feel entitled to be living in a really nice area and putting their kids through private school when the reality is that they could compromise and save somewhere, but won’t. It’s alright for the povvos to live ‘somewhere they might get stabbed’ I spose

well it's zone 4 for a start which will always push the prices down

As someone has already mentioned, people are confusing income and wealth.

You can be in the top 1% of earners, but still very low down the wealth brackets. The proper rich people in London don’t have salaried jobs and so don’t appear on those salary data sets. They have wealth (through various means, rarely independently earned) that eclipses anything that someone earning £80k pa could ever get close to. Hence a lot of high earners feel relatively poor compared to some of their neighbours.

[quote Lightsontbut]I live on the edge of London and occasionally look at Rightmove because I might move house. Even on the outskirts you have to pay £600k for a decent three bed and that's if you're lucky. A one bed flat can be £355k.

I don't live in London but how can this be true if in 1 minute I can find this place?

www.rightmove.co.uk/properties/76537818#/[/quote]
It’s Selhurst.

If you're earning well over £200k, have cheap childcare, cheap (comparatively) accomodation, average car and you're not putting tons into savings, where is it going?

Our accommodation (mortgage) is fairly average. Most of our income is going to savings, in practice because if we want to continue living here with more children we'll need a house and the price is eye-watering. I suppose when I say we don't feel well-off the point that I'm making is that it's very easy to (wrongly) look at friends earning £3-400k/y who have, say, full time nannies on £50k and second homes and exotic holidays and say, oh, we're average, even though objectively we're really not.

There's also the housing point, as PP have mentioned - we have higher income than older friends who bought earlier, but they bought their houses for, say £7-800k and we'd be looking at £1.5m for the same. In Lewisham. Over a difference of 10 years or less.

@SchadenfreudePersonified

I agree with you - but please - "median" isn't "average".

It's the middle of the pay range.

"Mean" is "average".

You may not be aware but salaries have a very odd distribution with a big peak at the lower end and a very long tail at the higher end.

What this means is that the mean will overstate any meaningful average.

Let's say that there are five people, four of whom are earning £10 an hour and one person is earning £100 an hour.

The mean is £28 an hour. Do you think that £28 is representative of the real situation?

All statistics that you read from government agencies concerning wages use the median when talking about averages for this reason. So, for example, when you read that "average wages have increased" they are always talking about the median.

It's about debt. And entitlement.

...and private schools are a biggie, for obvious reasons.

It’s Selhurst.

Is that not London? This website says that it is: selhurst.localstats.co.uk/census-demographics/england/london/croydon/selhurst

It may not be very central but high income enables you to make choices to live more centrally albeit in a smaller place if that's the compromise you're happy with. That doesn't mean the income is not high.

it's very easy to (wrongly) look at friends earning £3-400k/y who have, say, full time nannies on £50k and second homes and exotic holidays and say, oh, we're average, even though objectively we're really not. You need to look the other way too. Decent home, decent quality of life and your putting significant amounts into savings to buy a multi million pound house

[quote Lightsontbut]I live on the edge of London and occasionally look at Rightmove because I might move house. Even on the outskirts you have to pay £600k for a decent three bed and that's if you're lucky. A one bed flat can be £355k.

I don't live in London but how can this be true if in 1 minute I can find this place?

www.rightmove.co.uk/properties/76537818#/[/quote]
It's in the dead zone.

Part of South South London is cheaper than the rest of London because it's got surprisingly poor transport connections. If you have to rely on National Rail and the bus, it doesn't feel like London.

I wouldn't consider living somewhere that wasn't within walking distance of a tube station, let alone buying somewhere.

There's a reason it's so cheap. Many Londoners don't see it as London.

@Lightsontbut

It’s Selhurst.

Is that not London? This website says that it is: selhurst.localstats.co.uk/census-demographics/england/london/croydon/selhurst

It may not be very central but high income enables you to make choices to live more centrally albeit in a smaller place if that's the compromise you're happy with. That doesn't mean the income is not high.

If you can't afford to live within walking distance of at least one tube station, you're not on a high salary for London.

There's nothing wrong with making compromises, it's just you don't make compromises on a high income.