..to struggle to comprehend huge salaries?

[missbunnyrabbit]

I was reading the thread about how much people earn having been to grammar/private schools and I just cannot get my head around how much lots of people earn. My head just cannot imagine such huge salaries. People earning over 100k, what on earth do they even do with that money? Do they buy everything gold-plated? That's a joke BUT I have no idea what anyone does with that sort of money or what it could be needed for. This isn't a bashing thread or anything like that. I'm just a bit stunned.

Does anyone else's brain struggle to imagine such huge amounts of money?

@C8H10N4O2

Also as you earn more tax gets much higher eg I bet some people on here don't even know you get no single person tax allowance at all over a certain level. You also don't get child benefit. No one is going to cry for higher earners but it does have an impact on the salary

We also get substantially better pension benefits in line with tax rate which (for me at least) was worth more, especially as you could offset it largely with extra pension contributions. I suspect most people don't realise that high earners get bigger subsidies on their pensions.

High earners don't. The £1mill lifetime cap and the £40,000 cap on contributions had a massive impact on higher earners (this is the kind of statement which makes me realise that many people posting are not the higher earners that they claim to be!)

Above average earner do.

I earn over £100k and my partner earns close to that. I'm very grateful and realise how lucky we are. I didn't go to private school or come from a privileged background.

We probably don't live what you would think is at all a lavish lifestyle. We live in a one bad flat with a nook that's our nursery in London. We choose to live close to work as we can both work long hours and have travel, and being close to nursery for pickups and drop offs is necessary. We're saving for a bigger deposit so we can afford something bigger with more space - this is taking time but we hope to get there in a year or two. Daycare here is £20k a year per child.

We have a 12 year old pretty battered car, and don't dress in expensive clothes or buy too much new. Like a PP one of us has family on a long haul flight abroad, and so we spend visiting them annually, and also I really like to treat my family to nice trips or gifts. Otherwise, at the moment, savings and pension. And we don't scrimp on food. We don't buy takeaways or expensive meals very much, but do buy all high quality ethically produced food.

@Libertaire

You do realise that the government takes 40% of everything you earn over £50k in income tax, and that a gross salary of £100k equates to take-home pay of around £5500 per month, don’t you?

That’s a decent salary, particularly if your other half also works and you don’t live in London, but it’s by no means rich.

🤣

Classic MN

And that's the difference - CHOICE - that's what a big salary gives you and what someone on NMW doesn't have

Absolutely spot on

@Changechangychange

School fees are £20k per child per year around here (not boarding, just normal independent day school). Full time nursery fees are £1500-2000 per month. That plus a big mortgage (I’m in south London, a three bed terrace is easily £1m here). Job done.

If you earn that salary but live in Barnsley and send your kids to state school, I agree you probably have a lot of spare money. But most people on those incomes will be in the SE.

They don't need to send their kids to independent day schools, though, do they? That's a choice, not a requirement. This is what I mean - yes, of course private schools are expensive, as are mortgages on 3 bed houses in South London. But that doesn't mean an £100k salary isn't a lot of money! It means that they've chosen to spend that big lot of money on a luxury like private school, or like having a 3-bed terrace instead of a 2-bed house, or a flat, and making the kids share a bedroom or not having a garden. Those things are luxuries that are paid for with those high salaries. You're still rich, even if you choose to use that money on things that aren't gold-leaf crumpets for breakfast.

Don't struggle to comprehend huge salaries nor what it goes on...do struggle with posters on MN who earnestly explain that 100k is really not that much and is actually a struggle, and 5500 per month after tax is barely sufficient to make ends meet etc....and seemingly don't seem to understand the concept of discretionary or optional spending....so you don't have much left over AFTER paying for school fees, new car, mortgage on big house and your skiing holiday....my heart bleeds!

@Tipsylizard

Both myself and my husband earn over 100k and I am.always marvelling at why I don't feel rich? Taxman takes 40%, we have a mortgage of £3.5k each month, both have cars to get to work, 4 kids, a nanny for the younger ones to help out with school.drop.offs and pick up after school clubs,a cleaner to help keep the house in some semblance of order. We both have good pensions though and some savings (off set against the mortgage) so although we don't have much left at the end of the month we are planning to retire at 60 with no mortgage and a good pension. Its hard work at the moment - hopefully will be worth it!!

We both went to inner city comprehensive in the North of England.

Some perspective maybe, we earn 55k joint income.
Have a mortgage of £1k a month
run 1 10 year old car to get to work - if it dies we are fucked atm.
2 Kids, would love a 3rd but can't justify it.
No nanny - but full time nursery fees for baby and wrap around for 5 year old (also a 4 year gap because of said nursery fees) (comes in around £1000 a month)
No cleaner.
DH has a Local government pension, mine is basic autoenrollment.
No savings (well, £500 in the kids accounts )

So you may not be cash rich, but definitely are in other ways.

Someone asked earlier about careers advice in school - hah! we had none, quite literally 0 careers advice in school and nothing at home either. This was a great school with top results, but there was no provision for careers advice, at all. My parents didn't work and didn't have any push to get us to do anything, we had no idea, honestly, of what jobs earned what money. I didn't even know engineering or accountancy were things until I left college and saw others doing them.

I'm 35 now and when I went on my first maternity leave 5.5 years ago I earned £15k/year. Today my salary is £26,500 - I've done bloody well and worked hard - but salaries like those listed, especially in my North Eastern deprived small town, are just non existent with what we have.

Some of the comments on here are embarrassingly tone-deaf. No one in the UK is paying astronomical tax or has an overall tax rate of +50%. Here are the 2021 take home salaries for someone on:

£50k = £37,662 (25% tax, NI etc.)
£100k = £66,689 (33% tax, NI etc.)
£200k = £117,161 (41% tax, NI etc.)
£300k = £170,161 (43% tax, NI etc.)

If you make huge pension payments that reduce your take-home pay, that is a choice that you are very lucky to have.

If you are paying a huge mortgage on a big house, or are paying school fees, those are choices that you are very lucky to have.

EVERYONE has to pay council tax, utilities, food, fuel etc. - these things aren't special costs that only apply when you earn a high salary. Bills will be higher on a large property, but again - that is a choice that you are very lucky to have.

We don't earn that but looking around us in London - it's pretty easy to spend that much. 3k mortgage for a very average 3-bed semi in a half-decent area in London and two school fees approx 2k each - so 4k together. That's 7k per month that you dont even see. In practice, that means that with a family income of 200k - you could easily end up shopping in Aldi for your groceries.

Currently surviving on around £2,500 a month and if I leave my relationship benefits would entitle me to less than £2,000. Our rent alone is £850, then there is gas, electric, food, travel costs, car insurance etc...£5,500 would be a dream come true. That being said it would be nice to be able to have a mortgage and a house with enough bedrooms and a garden....and even we'd still have a huge amount of disposable income. I just think its different worlds.

I think you sound a bit naive, OP. And a bit judgemental.
My DP was for a while earning over 100K (and paying the tax and NI to show it). He enjoyed his work for a bit but then it got so stressful that he got ill and his GP said he basically had to leave his job/industry or he'd end up with at best a stomach ulcer.
His health is more important than any salary, so he did.
He now earns about minimum wage and I earn about 40K (in London, so that's not that much, no matter how much eye-rolling people on here want to do). We do OK, but only largely because we bought our house when he was a bigger earner. No way would we be able to do that now.

When we had a high income we gave a lot of money to charity. We have also both helped out our families.

I've a friend who earns very well and is able to go on a luxury holiday somewhere hot every Christmas. It looks enviable on social media etc. But he chooses to go away every Christmas because his parents, grandparents (who brought him up) and brother are all dead and he has had bad luck with relationships.

I could tell you several more stories like that.

You've no idea what people's circumstances are or how their lives may have changed.

@NothingSafe oh of course it’s a choice (and one which is completely out of my budget). The OP said she couldn’t imagine how anyone could spend £5500 per month, I am explaining that it is pretty easy to get through that amount without bathing in champagne or buying a yacht.

We earn about £120,000 pa and pay £43,000 pa for our DS to attend what is considered to be one of the best schools in the country ( boarding).
It's been a real struggle for us and I would never recommend it to any sane person.

This will annoy people, but I’m a high earner and love it and appreciate it every single day. There are no “yeah, buts…” from me, I’m so happy that I’m paid a lot. It makes my life much easier.

Both my husband and I earn over £100k for a combined income of just under £240k. We don’t have any children (by choice) and have a really fantastic quality of life

I actually don’t mind paying high levels of tax. I think it’s fair. I also think very high earners should pay higher taxes.

With our money we-

• Have two properties (one large and rural, the other small but in the City so saves on hours of commuting when working from our offices).
• Have also purchased my parents’ home from them. They have a life interest. The had originally planned on leaving it to me as an inheritance but I was concerned about how they’d manage maintenance (it’s a big, old property) so instead bought it (at market value- middle of three independent valuations). The money they now have means they can pay for a gardener/maintenance person each week, plus don’t have to worry about money for care etc.
• Contribute a huge amount to our pensions- we’ll be able to retire early.
• Invest
• Support a family member who is unable to work due to lifelong disability.
• Continued in education. I’ve funded additional degrees and diplomas for myself which have then furthered my career and earning potential.
• Travel with the luxury of business class/first class flights, and great hotels.
• Lots of pets who bring us huge joy and we don’t have to worry about vet bills.
• Support causes we care about- in philanthropic ways (charity donations) and selfish ways (memberships of certain museums etc giving early access to events).
• Can spoil nieces and nephews.
• Don’t have to worry about bills.
• Have private healthcare. I’ve recently had a pretty upsetting diagnosis. Money won’t cure me, but the trappings of a high salary often brings things like income protection/death in service benefit which takes away a lot of worry, should things get very bad.
• Nice hotel breaks, meals out, great wine.
• Occasional designer bags. I’m not big into fashion etc but do like a decent leather bag from one of the more demure designers. Even on the non-designer side, having money to hand when I need a new winter coat is a privilege.

So that’s us. We’re not super wealthy. We’ll never go yacht-shopping or have staff but none of that interests me. I don’t want a lavish lifestyle, I just enjoy having more money than we need and the security that that brings. I’m conscious of how lucky we are so do try and help other people and causes where I can.

We have a high income. We are relatively unusual in that DH sustained it for 20 years then stepped sideways for less money and shorter hours- something he may do for another 10 years (he will not stop working). Unusually I went back to work when dd started school, starting over and at the bottom but now earn 6 figures.

Also unusually, we have stayed married having married at 30ish and only, not by choice (and there I question what is true wealth) had two children.

The school fees are paid, the university costs are paid, the mortgage was paid years ago - I brought capital to the marriage. We are pensioned to the max.

We have a very nice house (we moved out of London 7 years ago in fear of the mansion tax) and have had a 2nd home in France for nearly 20 years.

We have everything we want and want for nothing. Our extravagances are opera, good food (usually home cooked), DH's car although bought 2nd hand and kept for some years now - and prior to that very modest. However we are not big spenders relatively speaking and have chardonnay tastes. Our family cars have all been 2nd hand (3 over 30 years) and driven to the point where our mechanic has advised to "get rid".

We have also benefitted hugely from being tail end baby boomers. We had one window when there was almost as much going out as coming in when ds was a baby and was ill to begin with and I had given up work shortly after buying our family home and extending the mortgage when dh's fees weren't yet coming in with their later regularity. That Christmas DH bought me a bath bomb and I bought him a Mars bar (we still exchange those gifts) and the three weeks after were tight until some fees hit - I recall we had £67 for food for 3 weeks (not horrendous by the standards of many) and by the end of those three weeks we were sick of potato, onion, and cheese pie with a bit of ham hock thrown in. The same ham hock that did a braised roasty dish on Sunday, a pasta bake on Monday, and started a minestrone.

At our stage in life we have nothing to spend it on or buy. Neither of us are the last of the big spenders. But yes we have a cleaner, a gardener, a window cleaner, a car valeting service once a month.

What hit home for me was the aftermath of an accident in August. That scared me and brought me up short. Life went on; I had hardly any time off work but could take two/three users a day, have my hair washed and blow dried twice a week. Those expenses added up to about £600 over a month. If we had been on minimum wage, eligible only for SSP, possibly with infants, we'd have been completely fucked and that's where life and consequences get scary.

A lot of people really don't understand the calculations for PAYE and NICs.

I don't think £100k salary is in the realm of yachts and private jets. But if you earn that much and also spend it all, that's something you're doing by choice. You're free to do that obviously, but not having much disposable income after paying for all the things you have chosen to pay for is different to not having any disposable income after paying for food and utilities.

I don't begrudge high earners their money. Some of them work very hard for it and deserve every penny. Some of them are buffers who talk the talk. It's as naive to think that every high earner is a hard working high achiever as it is to think that every low earner is a workshy layabout.

Isn’t Boris on 100k PA?

I earn a salary of GBP195k, give or take (sales-related, so varies - comes in lumps depending on performance, can be a little more or a little less but generally that ballpark). Partner earns about GBP50k on top of that.

I also live in Canada. In my province, the marginal tax rate is 53.53%.
For example: next month I will receive a bonus of $36k pre-tax (it was a successful October). I will take home $17k of that.

Background: state school educated in the UK. Didn't grow up particularly poor, but certainly firmly in the working class. No family car, didn't get a house phone until the mid-90s (as examples). Always strived for better and privileged to have the drive and opportunities I've had.
Throughout my undergrad - like most students - was living at the bottom of my overdraft and I think that pushed me to be more comfortable moving forward.

Like many other high earners, I've worked hard and made sacrifices to get here. The stories of 60-70hr weeks resonate with me, and atop of that I overlaid a masters part time which helped my career. 90hr weeks were common then, only really spending Sundays at home.

Lifestyle? Relatively modest. I'm a saver, always have been - and despite my income will always second-guess the smallest of purchases, and shop at the lower-end supermarkets. I shop around and love a good sale.

Like others, for me the difference is being able to afford nice, quality things and not worry about it. When I talk with my partner, the biggest thing my income affords us is being able to go to the shops and pick items up off the shelf without needing to calculate the running total and worry about if we can afford it or not. That's what I'm grateful for. Also, I have the ability to absorb big bills and surprises as and when they come in. I remember growing up when the boiler would break down and my dad would stress over where the money will come from to repair it - and I'm fortunate to not be in that situation.

My home is also modest - the smallest on our street, in a nice neighbourhood. Small, but able to keep it in good shape. I don't believe in excessive living. Things like oversized living doesn't do much good for the climate (I also drive an electric car as my main vehicle).

My only splurge is my sportscar - which I baby and only comes out in the summer. That's my outlet and only real hobby. Was a big initial cost, but cheaper than a lot of hobbies over time.

Clothes - someone else mentioned quality but not designer - that's where I generally am. Again, wait for the sales.

Holidays - well, when they were a thing, we'll go either on a package to Mexico (remember it's close for me!) or back to the UK once a year. Nothing top-tier.

I max out my pension and ensure my son has his education savings account topped up. I also have some investments but they're likely to be taxed heavily in the future.

As for the tax issue - mixed thoughts. I don't mind paying tax for a better society. I don't go out of my way to avoid tax, other than the normal straightforward pension contributions to ensure I can support myself when I'm older and not claim means-tested benefits. A lot of earners at my level will try and move to the US to keep more of what they earn. I'm not that way inclined.
What does frustrate me is being constantly told by vote-buying, money-wasting, self-serving politicians (of all stripes, let's be clear) that I'm not paying my "fair share". As someone with the good fortune to be healthy and not a big taker from healthcare, I pay more in than I take out, which is fine and I'm happy to support those less fortunate.
Yet, as a 1% earner, I'm labelled greedy, rich and a target to take more from. "Fair share" of course can never be defined... (note I'm a high EARNER, but I don't have 1% wealth, as I started with nothing 15yrs ago, and haven't accumulated multiple properties, etc.). It's the same everywhere though, and as the gap between the haves and the have-nots widens, it won't change. That's the only annoyance, politics-wise.

Anyway, bit of a ramble and likely missed the point - but in summary, I get to save, have a few nice things, don't live beyond my means, but most importantly I'm comfortable and don't worry.

A lot of people on this thread are just answering the OP's question 'what on earth do they even do with that money?' For some, private school and ponies are the priority and they're willing to shop at ALDI to afford that. For others it's expensive holidays or providing experiences for their kids or having a mortgage on a big house. For us it's having savings to provide peace of mind for now and the future (Who cares where you shop, I use a mix of ALDI, LIDL, Waitrose and farmshop but A and L mostly because of the parking).

But it is very unlikely that you could afford all those things on £100 000 on top of accommodation and general living costs. People have different priorities, what a surprise.

Lol at people explaining tax to the paupers like it’s a completely unknown thing 🤣🤣

@LemonTT

IME this bracket of high earner, c100-150k per year, don’t live lavish lifestyles. They are just very comfortable and financially resilient. If they have children then they can spend a lot on childcare and thus sustain good careers. As they get older they are able to save for old age, university fees and fund the bank of Mum and Dad. In the meantime their purchases are less budget and more premium. A 50k new kitchen rather than a £5k one.

And at the end of the day people who ear a lot do so because they bring in a lot business / profit for their company or they have skills and abilities that are scarce. It’s not necessarily that they work “hard” or even long hours.

IME high earners deliberately decided to go into fields and careers with high financial rewards. They didn’t put a lot of emphasis on personal satisfaction or work life balance when they picked careers. That being said they have also succeeded in securing flexible arrangements to enable PT working and family life.

I think a lot of people can imagine how these people live. That’s what they aspire to and that’s why they keep voting for right wing policies.

A better question is whether these people can imagine what it like to live off average earnings.

It’s not hard to live off average earnings though is it? Since it’s 30K p.a. That plus a part-timer on 15K makes for a comfortable income of course location and family dependent. If you were on 100K and dropped to that yes you’d have to make adjustments but mortgage aside it’s buying the cheaper versions of things, not saving as much. You wouldn’t be on the breadline.

However as usual this thread has become a comparison of those earning 100K and those on the breadline which is a race to the bottom.

The thing I find about threads like this is people justify what they spend and term them as essential, when they're not really and truly essential because there's a proportion of people who live without them all their lives.
Things like £2k holidays, cleaners, nanny's or private education increase quality of life, they add to people's life in a positive way, but they're not essential in order to live. They may be very important, or they may facilitate the ability to work in a certain way or industry, but they're not essential. They're a choice to be had if you can afford it, and there's nothing wrong with making those choices, but they're not essential and I know that because I (and many others) live their lives without them. So I do find the notion that 'having' to pay for a cleaner or 'having' to pay for an expensive holiday or private school fees isn't a choice a bit baffling.
You can choose to live in the cheapest house, do your own cleaning, education at state school and only have one car - then you'll have more of the £100k you earn left, but if you choose those things because they're important to you or because you want and can afford them, you're still earning that £100k, it's not the income that may be causing the struggle, it's how it's spent, and that's a choice when you move above the actual essentials of what we need to live.

There's also this incessant need to bang on about hard work. Well I'd pretty much say that anyone who has a job works hard, but there's a need to justify a higher income by thinking you must have to work harder for it, and therefore a lower income means less hard work . Maybe some do, maybe some don't, but we're in a place where we judge people, a whole person, and their attributes by the contents of their salary. Not the actual job they do and what that contributes on any other level, only financially. That's wrong, because we're seeing the effects of low waged and regarded industries running out of staff with the shortage of health and social care providers, hgv drivers, hospitality workers - it's affecting everyone at some level and it's certainly affecting society.

Our household income is around £100K and we don't have a mortgage (house is a 3 bed detached, we never traded up when we could have theoretically afforded it so quite a small house but big enough for us).

Actually it doesn't feel like that much because we live in an affluent area and I've yet to meet anyone who's hard up here! Everyone seems to be loaded. However, there are good state schools and one of the reasons people are comfortable is because they don't "need" to pay private school fees.

Both DH and I have experienced redundancy and appreciate that jobs don't necessarily last forever, so we have always saved a lot (and that is also a reason for staying in our current house and prioritising paying off the mortgage). It mean we now have enough in the bank to pay for our ds' university accommodation costs and have the privilege of not having to worry if something breaks eg washing machine or gas boiler (other than the hassle of it). Or, in DH's case, he needs new glasses and was saying they'd be expensive - well yes - but he can afford it. I can also afford to help my mother out with the costs of a private eye operation so she doesn't have to wait months/years for the NHS. That's a good and privileged position to be in.

We have two cars but one is a 2014 reg and the other a 2017 reg - both bought outright.

I completely agree @Ledwood85. Whilst we don't begrudge our taxes we very much have paid our fair share without using very much the services they pay for: principally education and health.

A better question is whether these people can imagine what it like to live off average earnings

Yes I can, because I have done it. I was made redundant back in 2012 and worked part-time for a year, earning around £8K (although I was able to supplement with some freelance work). We had the mortgage then so used savings to pay it until I was back in a "proper" job.