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.

DH has nearly always earned a big salary (he was on 80k about 18 years ago) in London and we’ve chose to live outside of London in the South East. That works out well because although housing costs are high they were no where near London prices. We moved near good schools so didn’t ever consider private schools.
He’s one to compare himself to his colleagues on 500k a year and have a few houses etc. Whereas I can’t believe we have such a high household salary and am thankful for it. I do think a lot of this thread is about attitude rather than actual figures.
Having said that the more you earn , the more you spend and things become ‘essentials’ and you don’t even think there’s the option to cut back on them.

@Oly4

Agree with dchange Our family mortgage is 2K a month then we have childcare. We are certainly not paying for private schools on that salary

Same here

It all depends on personal circumstances.
A semi-retired person with a fully paid house - yes, it's a lot.
A single parent with two preschoolers - this will not cover cheapest childcare and 2 bed rent in a really bad area.
It is definitely not private school territory, as so many people seem to assume.

I'm from London and have been looking with my mum recently as she's moving, and she was looking for a 3 bed house in the Forest Hill/Sydenham area (SE London). This is one of the ones that she was looking at: www.rightmove.co.uk/properties/99723275#/ it's £475k and it's in Forest Hill which isn't a 'transport dead zone' at all - it's on the Overground line and there are trains every couple of minutes into London Bridge or Canada Water. She liked this place as well: www.rightmove.co.uk/properties/75607296#/. There are options cheaper than that as well if you follow the Overground line further out - www.rightmove.co.uk/properties/86730022#/ this is in Penge and is £390k.

Salaries and house prices are different in London and I'm not denying that, and it's why I won't live there as an adult despite growing up there. But it's not true that it's impossible to find a 3 bed house in London that isn't 600k or so.

I live in London, holding down my mortgage on my ex-Council flat on a salary of £30k...and if I'm very careful with my money still can treat myself to the odd meal out (prior to Covid), holidays and online clothes purchases every now and then. I don't think I'm poor. Not rich, but I consider myself pretty middle class (from working class origins)

It's not a great salary unless you choose to commute into London. That is not fun although right now most people aren't having to do it doe office jobs anyway.
There are higher costs such as dressing well etc in a lot of offices and if you're client facing it's a lot nicer clothes than a local firm (worked in both and was pulled up if looking a bit shabby on any given day!)
Train fares if you have to commute are generally extortionate and if you want to raise a family you'll be lucky to own more than a tiny flat.
A lot of schools are horrendous depending on which part of London you're in and on that salary it's probably not going to be the best. No chance of private school fees if you're living in London on that salary, possibility if you commute.
So I think that's what's some people mean. It's not so much it's not a great salary rather it doesn't go very far if your life revolves around where you work.

Private schools often come up because they are an aspiration of the SE middle classes: those who are conscious of the fact that they may earn 'large salaries' but not the 'extremely large salaries' that are actually needed to genuinely afford private schools.

Those salaries must be across all age groups so it’s different to have bought in the 80s and be on £25k with no mortgage and no commuting costs (what my parents were till they moved out 5 years ago) and those people in their early 20s on £25k renting at £1k per month on outskirts of London paying a couple of hundred a month fares too, with no hope of saving enough for a mortgage.

But I agree with you generally OP. I grew up in London (even a nice part of west London) and no one I know who still lives there earns more than £60k - and that’s just one person. Everyone else I know earns under £40k. But of those the only people who own a house bought pre 2000. The ones who bought 90-00 have 100% mortgages. The rest bought in the 80s or had a lot of help. The others either private rent or have council or HA type homes.

No one I know sends kids to private schools. The majority of my friends are teachers or work in social care, hospitals, for the council or university administration. None of those are particularly well paid jobs.

When I last lived in London in 2011 I earned £38k and H earned £45k and we were easily the highest earners in our group. Even with rent of £1500 per month and high council tax etc we felt loaded and ate out lots and had good holidays. But we had no kids.

[quote nickymanchester]@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.[/quote]
I doubt anyone uses the word average when they mean median. It would be incorrect even if the data is skewed. They may say wages have increased to decreased. By average/mean have a specific meaning and it’s not the same as median.

But median may be more relevant. And negates many of the comments about London having high earners as that isn’t impacting the median at all. But by saying average many aren’t understanding what the figures actually represent.

Totally depends on what stage of life you are at / how big your mortgage is.

Late 20s/early 30s, 2 kids, saving to buy a house in catchment of a good state school - I don’t believe an 80k salary would go far.
Used to live up north on more than this and there is a HUGE difference.

My single friends on 80k+ are saving everything they have just to get on the property ladder in London.

We live in London, own our own place and our combined household income has never been 80k

@emptydreamer

It all depends on personal circumstances. A semi-retired person with a fully paid house - yes, it's a lot. A single parent with two preschoolers - this will not cover cheapest childcare and 2 bed rent in a really bad area. It is definitely not private school territory, as so many people seem to assume.

I was a lone parent of one child, I was paying rent in N1, saving a deposit, paying for childcare and a yearly holiday.

I agree OP and had this conversation with a colleague recently. He was arguing that he and his partner weren't well off even though partner earns £80k and he earns £40. No kids. DP and I have never earned £80k between us but feel relatively well off compared to people we know on much lower salaries. It all depends on who you mix with as to whether you're realistic about how wealthy you are.

@awwkkwwaard

The South West covers a large area from Swindon to Cornwall.

The highest median wages are in areas like Swindon, Bristol and South Glos. (around £34k)

The lowest median wages are in Cornwall (£25k) and Torbay (£23k).

The overall SW figures are broken by down by percentiles. So the 10th percentile is what the person who is at the bottom 10% earns and the 90th percentile is what the person at the the top earns (the top 10%)

10th percentile - Men £18,200 Women £16,300
20th percentile - M £20,900 W £18,900
25th percentile - M £22,400 W £19,900
30th percentile - M £23,900 W £21,000
40th percentile - M £26,900 W £23,600
50th percentile - M £29,900 W £26,200
60th percentile - M £33,700 W £29,700
70th percentile - M £38,800 W £33,700
75th percentile - M £41,500 W £35,800
80th percentile - M £44,900 W £38,900
90th percentile - M £56,900 W £47,400

I agree on paper it seems like a lot of money.
However we moved out of London as we couldn’t afford to maintain our lifestyle in London and buy a house and have kids there (and we were earning well over 80k combined). I think anyone saying it’s not much in London isn’t wrong however they obviously have a certain standard of living.

@SimonJT
Add another child into the mix with the nursery cost of £1500+ and boom, you're on the breadline.

@waydownwego what utter nonsense. I live less than 3 miles from London Bridge but there's no tube station close by. The train takes 6 minutes to get to London Bridge but because they haven't extended a tube line here, it means everyone who lives here is poorly paid?

I lived on £70k salary in London on my own, in a really nice area (Chiswick), in a spacious, modern 1 bed flat. I loved my lifestyle, dinners, drinks & coffees with friends, gym, classes, holidays, cooking healthy food at home, splurging from time to time on designer shit and I had a small car. I wouldn’t say I had the ultimate luxury life, but it was absolutely comfortable and I certainly never felt poor. But then, I had no kids, no responsibilities other than myself. And I would say I am sensible with money.

[quote emptydreamer]@SimonJT
Add another child into the mix with the nursery cost of £1500+ and boom, you're on the breadline.[/quote]
I wouldn’t have been, it would have taken longer to save a deposit, but there is absolutely no way I would have been on the breadline.

@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.

Er - tax rates are the same in the Midlands. You can't just give the local sheriff a sack of turnips.

Ok I think I get what people are saying about Selhurst. But then it's not 'you can't buy a 3-bed house in London for less than 600k' but instead it's 'you can't buy a 3-bed house in London, in an area I like, for less then 600k' which is quite different. And if you have a salary of 80k you are much more able to be 'fussy' in that regard than the average person. Of course it' doesn't stretch as far as 80K in wales but it still buys choices that other people don't have.

It’s not really a lot of money tbh - we earn 90k between us in London

Our mortgage repayments are 1500 a month

Nursery is 2000 a month

We aren’t poor - but we certainly aren’t rolling in it! We do have to live within a very strict budget

If we didn’t have the nursery fee then we’d obviously be way more comfortable 😂

Depends if you own your own home. If you are renting and you have kids in london then that’s not really a large salary. If you have a relatively small mortgage because you bought your house 10+ years ago then yes it would be fine.

[quote kirinm]@waydownwego what utter nonsense. I live less than 3 miles from London Bridge but there's no tube station close by. The train takes 6 minutes to get to London Bridge but because they haven't extended a tube line here, it means everyone who lives here is poorly paid?[/quote]
Compared to those living an equal distance from a mainline station in a direction that means they can walk to a tube, yes. Brockley or Deptford aren’t the same prices as Camden or Archway.