..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?

100k Salary is obscene

No, £8.91/hour, zero hours contracts, and non-payment of sick leave are obscene.

It’s not a race to the bottom.

@2bazookas It's not quite as clear cut as that; it's only in recent years that the percentages have shifted, meaning it will be a while before those changes feed through into the working world; and those percentages only apply to UK applicants, not to those from outside the UK. Cambridge also does slightly better than Oxford in terms of percentages, but if you look at many people in positions of power it tends to be Oxford they attended...interesting article on the percentages (among many others out there) at whichschooladvisor.com/uk/guides/which-state-schools-get-the-most-students-into-oxbridge

It'll be interesting to see what effects COVID-19 has on all this apparent social mobility; there is already evidence indicating just how devastating it has been for those from less well-off backgrounds, including children.

At the state school I attended, only one (male) pupil in our year (Maths whizzkid) was encouraged to even apply to Oxbridge, despite several other pupils getting grades good enough for the courses we would have liked to study; only we didn't know the grades at the time we were applying for university. Just one of many reasons why it would be great if the timing of university applications could be postponed until AFTER exam results are in...

Money buys choice. Choice buys privilege.

I am presently having hand therapy fortnightly with a lovely private physio. NHS option would be one or two sessions delivered too late with no continuity. Similarly for my back injury I am having physio weekly, another £55. PPP doesn't cover my chosen physio because they are too expensive. They are also the best in my town with a niche speciality. When I asked my GP about a physio referral for my back it was refused as I didn't meet NHS threshold despite being in agony. To remain fully functional I am therefore spending £80 per week to keep me working and paying tax to fund the NHS.

Nevertheless GP has no hesitation prescribing co-codamol, naproxen, omeprazole, amitryptillin for pain. And because I'm over 60 all my prescriptions are free despite the fact I earn more than 100,000. The system is an ass and surely that £40pcm would be better spent on those who live on the margins. However, computer says innit.

If you're on PAYE you'll pay 68% in tax and NI. Why do you think Adele left ?.

Whocanthatbeatthistime we went with state schools as wanted to have a lot of fun money to enjoy doing family things such as holidays etc. Plus we thought it would add stress worrying about losing jobs and finding school fees money.

@Pyewackect

If you're on PAYE you'll pay 68% in tax and NI. Why do you think Adele left ?.

@Pyewackect The top rate of tax in the UK is 45% which is the additional rate, the NI at that level is 2%, that means that the highest rate someone would pay would be 47%. Your 68% figure is entirely made up.

www.gov.uk/income-tax-rates
www.gov.uk/national-insurance-rates-letters

@EerieSilence

You pay the fax which is already something. You want to buy a house and pay the mortgage. You want to afford your child a great education.

Also, you bloody work hard for the nice money, at least many do. With this amount of money, you don't ask for ridiculous things such as paid overtime, not working during weekends or late in the evening should the need arise.
Essentially, you rarely stop working because you have responsibilities people on lower incomes wouldn't have.

I work bloody hard. I get bitten, kicked, head but as well as verbal abuse. I don't get overtime but I'm often making resources or waiting late for pickups. Just this morning I wrote a post that I can't afford to take time off sick as I don't get paid. I'm sure the people in charge where I am will tell you that they work hard to earn their crazy salaries but in reality they push some paper about and get to go home at 3 with no fear of injury.

@Cheerychirpy I think that you made the right decision. Top public schools are really only for the very rich in my opinion.There is so much more to being there than just paying the fees , which are real struggle for us. If either of us had a experienced a better childhood we would undoubtedly made a more sensible decision.

I just worked out that our household contribution last year to tax and NI was £50k. Am I not giving back enough?

@Shade17
100k Salary is obscene
That’s about the starting point for the top 1% of earners. The 1% who pay 28% of the total income tax revenue

I always find that argument a bit disingenuous though. Several thousand people pay billions in tax because several thousand people earn multibillions company profit/personal income. If the fruits of work were more equally shared (ie the majority earned say 40k with much smaller figures in the top 1% or 0.01%) then the tax burden would be too.

The important argument is about whether people are fairly compensated for the work they contribute, relative to others. The tax argument is a bit of a “look squirrel” IMO. And is say that as a high earner.

@Dollyparton3

I just worked out that our household contribution last year to tax and NI was £50k. Am I not giving back enough?

Sorry but and??

You are in a position to be able to pay that much money. That’s a privilege.
Would you prefer to not pay anything and see others struggling even more than they are now? I don’t.

@blessedbethechocolate sour grapes? If you're unhappy in your job and get treated like this - and it's clearly against the labour law, you need to complain or quit and find something new. Or not complain and just grin and bear it if you have no other choice.
People on salaries of over 100K certainly don't sit on their butts and push papers around and really really don't get home at 3.

Highest rate of income tax is 45%, then add 2% marginal NI on top and the new 1.25% in which is coming takes us to 48.5%. However it gets a bit more complicated when you lose the single person allowance entirely and secondly when you pay 9% student loan charge which might well take some people above 50% towards 62% income tax/NI.

I would prefer maximum 20% tax./NI flat tax and capped at say £100,000 a year tax and above that you keep the fruits of your labours but as the Tories are currently very very high spend and tax party there is no chance of that unless I were to move abroad when the children leave home.

@User13489089768

*I've read most of the thread, and the thing I'm most shocked by is that out of ALL the posters who admit to earning huge salaries, NOT ONE mentions using any of it to help those less fortunate than themselves. No wonder society is fucked and the rich just keep getting richer*

Another obvious point is that you are not rich in complete isolation. You still need friends, events, celebrations, play-dates etc. Purely hypothetically, imagine someone earning 200K but they opt to only use 30K of that which is what many posters in the thread are implying is reasonable. They will have a life identical to that of a median salary. How would such a life look like when you're essentially "pretending" to have the same problems that people who actually earn 30K do? The quote above reflects the attitude of many people who clearly despise high-earners and would obviously not want to be friends with them. So how should "fake frugal" rich people live if they know that their friends and family are secretly resenting them for pretending to be poor?

The slow increase of outgoings is almost inevitable as people make subtle adjustments to their life. It's safe to generalise that the majority of people you will spend the most time with will eventually be from a similar socio-economic background. This makes minor things like choosing locations for a drink or topics of everyday conversation quite a bit easier. There are so many small talk topics that are very closely tied to income such as properties, impact of covid, travel, food, schools etc.

On a purely everyday basis, it's human nature to find the group of people who are most similar to you so you can be accepted authentically. If someone you know earned 200K a year but they're at the pub moaning about petrol prices (because they only allow themselves a budget of 1K to live on like an average person) then it would be far more disingenuous than if that person just stayed in their country club talking about stocks with someone else who earned the same.

But it also depends on what you have in common with people. The people similar to me earn everything between 30K to 100K and are similar in terms of having enough for a nice meal out occasionally but that’s where it ends. We have plenty to talk about . If one person shares that they went abroad and someone else talks about their caravan holiday it’s all good. Still a holiday. Why would there be a gulf?

We are all however quite intellectual. DP’s family who want to talk about football and local /industry gossip all the time. They could not care less about the rest of the world and we have nothing in common eevn with the ones of a similar financial standing

However "comparison is the thief of joy". I rate the fact I have needed a doctor for 7 minutes in the last 15 years (my good physical and mental health in my 50s) above just about everything and certainly including money.

(Top public schools are not just for the very rich. My son's friend went to one on a full scholarship - from a fairly working class household but I agree that most people at fee paying schools pay the full fees. My sons had about £1000 off a year for having a music scholarship and my older son went to the fee paying day school where his father taught from age 5 to 12 with only paying 15% of the fees (perk for teachers at that school).

My DH earned spectacularly high sums through the last 10 years of his career because he developed something new & innovative which became a market leader and was much copied. This has left us in a very comfortable position regarding retirement and able to help our DC substantially with buying properties of their own.

Making a lot of money was never the aim - he just did what he was good at and protected his rights over his intellectual property.

Forgot to add, he did not go to public school - he grew up very poor in a SE Asian country

Xenia I remember when my DH earned between 100k and 115k the tax went a bit funny and he got raises at work but hardly any more money after tax.
I’m not sure if that’s still the case.

@Xenia

Highest rate of income tax is 45%, then add 2% marginal NI on top and the new 1.25% in which is coming takes us to 48.5%. However it gets a bit more complicated when you lose the single person allowance entirely and secondly when you pay 9% student loan charge which might well take some people above 50% towards 62% income tax/NI.

I would prefer maximum 20% tax./NI flat tax and capped at say £100,000 a year tax and above that you keep the fruits of your labours but as the Tories are currently very very high spend and tax party there is no chance of that unless I were to move abroad when the children leave home.

Tax doesn't work like this, you don't pay higher rate o everything. Correct % of tax and ni on £100,000 is 33%,

@TravelLost all the salaries high earners paying 100% of their income in tax wouldn’t make a difference.

Because the issue isn’t tax from people earning an income but corporate and capital gains tax. The majority of wealth by the very wealthy is paper money based on the value of assets. It’s not cash that comes into their bank accounts unlike income earners.

Furthermore what the money is spent on is another problem. You’re naively assuming that paying more tax means more money going to those who need it which is not the case. It’s more money to be wasted. Particularly in digital transformation and NHS costing for even stationery you’d be shocked at some of the things I’ve seen .

I used to be proud of being a British taxpayer until the reality hit. Now I would rather keep all of that money and give directly. In fact I do. To climate change, neurodiversity charities (DP and I both ND) and I have even paid the assessment costs directly for people’s children. I don’t think my tax would have shortened their waiting list would it.

We earn about 5500k a month between us. The kids are at private school but we pay very little in fees (for reasons I won't go into). If we were paying full fees, that would cost over 4k a month (so we wouldn't/ couldn't do it). We also live in a very expensive area - our house is perfectly nice but pretty modest. To buy a 4 bed detached around here would cost a million, more for something really nice - so again, we don't/can't do it. I'm not for a minute saying that we're anything other than incredibly lucky to earn as much as we do, and as others have said, it means that we can afford savings and days out and a new boiler and things like that. But the OP's question was about how people can possibly spend that kind of salary - and as others have said, it's not difficult. I know lots of people who earn considerably more than us, who have opted for either school fees or a lovely house, because they don't earn enough for both (in this area, anyway). Of course they're infinitely better off than the vast majority of people, and of course they have the luxury of choice, and they wouldn't dream of saying 'poor me' - but if the question is 'how on earth do you spend 100k a year', then as soon as you look at nice houses in expensive areas, or private schooling, then it's very easy to spend much more than that.

@Xenia

Highest rate of income tax is 45%, then add 2% marginal NI on top and the new 1.25% in which is coming takes us to 48.5%. However it gets a bit more complicated when you lose the single person allowance entirely and secondly when you pay 9% student loan charge which might well take some people above 50% towards 62% income tax/NI.

I would prefer maximum 20% tax./NI flat tax and capped at say £100,000 a year tax and above that you keep the fruits of your labours but as the Tories are currently very very high spend and tax party there is no chance of that unless I were to move abroad when the children leave home.

The additional has not been brought in yet though, and still has minimal impact. A student loan is not a tax and someone earning more than £150k and paying 9% would be paying it back pretty quickly, in all likelihood they would have paid their student loan back long before they reached an income of £150k pa or more.

Your income tax proposal would require us to make cuts equivalent to ending the NHS and free education or removing all pensions, benefits, abolishing the entire policing and judicial system and disbanding the entire military. Both my husband and I are additional rate taxpayers and I accept that we should pay taxes to help fund the country and that the levels of taxation in the UK are actually too low, with the bottom two thirds of earners already having the lowest effective rate of income taxation in the EU (the top third have the fifth highest). The current Conservatives are slightly higher tax and spend by historical UK standards, but by global standards they are still a low tax and low spending economy, apart from the USA and some tax havens there are not many places where you would pay significantly lower tax.

@MatildaIThink everyone wants ‘someone else’ to pay tax 🙃

DH was on about £130K, and a huge chunk of that was taken in tax. We certainly couldn’t afford for me not to work too (although I was on about £30k at the time) and we certainly couldn’t afford to pay private school fees. We have a nice 4 bed house, kids can do the extra curriculars they wants, but with £2k mortgage it all goes quickly!

@InSpaceNooneCanHearYouScream

I've read most of the thread, and the thing I'm most shocked by is that out of ALL the posters who admit to earning huge salaries, NOT ONE mentions using any of it to help those less fortunate than themselves. No wonder society is fucked and the rich just keep getting richer

That is simply untrue. Search the thread for the word 'charity/charities'.