Do you think £100,000 a year household income is a lot of money?

[SleepDreamThinkHuge]

I think it is a lot of money even in London where I live. When I hear people say things like "£100,000 is not enough to live on even in London" I think to myself what are they talking about. I have a family of four and we can only dream of earning that amount. The maximum I can see us earning is about £60k if we are lucky. Currently on over £40k combined income with still a relatively high rent and everything does go on bills and other necessities. But sometimes we are lucky and manage to save some money a year. Luckily no debt. I just think to myself £100,000 would be life changing even in London.

What are your thoughts? What do you consider to be average and above average in London and the city you are from?

But a 30 YO with a household income of £30k will look at a 30 YO with a household income of £100k and all other factors being equal think 'they have such a lot of money compared to me'.

That's the point of the thread, not comparing 30 YOs today with 30 YOs in 1980.

There are a lot of formerly well paid professions like this including teachers, nurses and even junior doctors, clerical staff in corporate environments, accountants outside of the FTSE 350 or equivalent large firms, middle ranking civil servants, lawyers who specialise in criminal or family law who just don't earn the same in real terms as they once would have. No one can say they didn't or don't work hard, all you can really accuse them of is choosing the wrong essential occupation.

yep

Single or dual income? If we had been on a dual income before divorce I would agree £100k would be plenty for an okay, comfortable middle class life in Surrey (provided you bought your first home before 2010). However, on a single income we were about £12k shy of a dual income household. We basically subsidised people who got discounted childcare through our taxes.

But a 30 YO with a household income of £30k will look at a 30 YO with a household income of £100k and all other factors being equal think 'they have such a lot of money compared to me'.

but the point is all other factors are not equal.... lots of young people do get help today. 😆

But if the 30yo on £30k today was gifted a 40% deposit on their home then they'd have more disposable income than the 30yo on £100k with a 5% deposit and a HTB loan. That's the point about generational wealth and inequality, you can't just compare income you have to look at wealth too.

We earn just under 90k and tbh it doesn't go that far! After deductions (nothing fancy, just the usual plus pensions and a £50 AVC salary deduction) our income is £4900. Childcare costs just a little less than the mortgage, we own our cars and otherwise have no debt. We're not out all the time and we don't have loads of activities etc, no foreign holidays, no expensive habits. We're not poor, but definitely not well off. If we were in London it definitely wouldn't be enough to live on.

What I think you intended to say is that the arithmetic mean house price is larger than the price paid for most houses because it's distorted by a few houses at the top end.

Which is true, but the "average" figures that are being used on this thread mostly come from government data which sensibly use geometric mean instead for that very reason. The geometric mean is pretty close to the median in this case.

It's plenty of money to live a comfortable life. You can't just spend what you like and if you have high mortgage, school fees, etc then of course you can get through it quickly, but it's enough to not have to worry about paying bills or little treats. People saying it's not enough just want to live a different life.

Using government or industry averages (which I find on the low side, but using them).
£100,000 and so take home pay is just over £65k.
Where I live in SW London, renting a two bed house is £2,500/month, a 3 bed up to £3,500 (terrace house with small garden). So that's £30-42,000/year. So say it's on the £30k end. If they own take that as mortgage. Council tax: £2k plus, utilities (using government figures for an average two bed house, which of course is increasing) £1500. House maintenance and insurance? At least £2000, and could be a lot more (not if renting, though there are still expenses). Annual travel card to Zone 1-3 £1880/year per person. Average grocery shop £4000/year. So where are we so far?
30,000
2,000
1500
1880
2000
4000

That's just under £51k. That leaves £14k.
Average cost of running a car (that is owned outright) £3000 ( includes petrol, repairs, insurance and servicing).
Now are these people going on holiday? Let's give the one holiday a year. £3-4000k.
That's now down to £7-8k
Eating out? Birthdays? The odd takeaway or Costa coffee? Not to mention phone and internet (£480), mobile (£600), cable TV subscription, TV licence. That's another £13-1500/ year.
Clothes? If you've got kids that's an unavoidable expense. And childcare?
So people may say some of the above is optional. But I've only included one travel card. One mobile phone. Not included childcare or clothing.
So yea, live here in SW London and £100k doesn't go far.

re. House London price.
thing is you might have bought your London property for 100k in the 1990s and now it’s worth 700k. Great, that’s a nice 30 year pay out (though not even half what a 100k investment in the basic stock market would have got you over the same period). But you only see that even 1pence of 600k “profit” if you sell up. And the vast majority are very settled where they are.

but your repayments are far lower

Once upon a time, many millennia ago, I was a professional fundraiser, focusing on charitable trusts and major donors.

I noticed that EVERY major donor (I.e. someone who could give £10,000 or more without blinking) was convinced that they were not rich. They all pointed to someone else (often Richard Branson 😆) who was 'really ' rich.

This included people who had 4 children at Eton or the female equivalent. But of course, the school costs were necessary, it isn't a race to the bottle 🤣🤣

my parents house was 50k in the 80s, "worth" close to 2m now

Who's wealth? Who's been given £40k? I know people say MN is a different world but it bloody is when people think being given £40k is a normal expectation.

I said 'all other factors being equal' so obviously if someone has been given £40k then that's not an equal factor or probably a normal expectation for the average low paid worker and this mythical £40k that in reality they're never going to be given is not going to stop them thinking that someone with two or three times more income than them has 'a lot of money'.

It's absolutely a decent salary, although someone earning £100k a year paying a mortgage on a house they bought 10 years ago will be vastly better off than someone paying a mortgage on the house next door at current prices.

A household income of £100k is also better than an individual income of £100k due to lower taxes on 2 smaller incomes.

People commenting here saying they earn that or more as a household but don't have high mortgage or school or nursery fees but still don't feel wealthy I don't understand where your money is going?

We earn only slightly more than that as a household, have a big mortgage on a tiny house and I have the freedom that money provides. If I miss the train back from the airport I can pay for a taxi without thinking, I can afford nice trips abroad, I save a third of my salary without trying, I can buy clothes without checking my account. That's hugely privileged!

Who's wealth? Who's been given £40k? I know people say MN is a different world but it bloody is when people think being given £40k is a normal expectation.

"Among those who purchased their first home between 2015 and 2019, half (54%) say they had some form of financial help from their parents."

Who do you think all the family booster mortgages are aimed out?

@GCHeretic

Oh the irony.

Do you always resort to insults/goading when you can't argue a point.

Maybe its your reading comprehension that's the problem given you dont appear to able to understand what I'm saying and are arguing and taking huge offence at a point I havent made.

Touchy much? Why so insecure?

There are many factors that go into your monthly income and how rich you feel.

It isn’t just what you earn or get in benefits though. It is what you spend that money on.

£3000 per month and I sent 2 children to private school, we had a holiday abroad each year (couldn’t afford to stay in this country) and I ran around in cars that cost less than someone’s monthly HP payment.
I used vouchers and shopped around and gained points and cashbacks from everything. Only help I got was from the person who stole my handbag. They used my Tesco club card for 3 years before they noticed they weren’t getting any points as the card was registered to me.

They spent much more than I ever did at Tesco

My children used to think we were millionaires even though we had less income than anyone we knew.

Some form of financial help is very different to a lump sum of 40k

I had help to buy, I don't know anyone who hasn't

I live in SW London.

3 bed house. Utilities (council tax and gas, electricity) £190

No car because good public transport. Maybe £20 per month? DD gets free bus travel to/from school and extra curricula.

Several holidays per year camping in the UK, plus DD's 2 weeks residential in the summer holidays through Church - £1,000-1,500 depending how much I can afford.

Dance classes are the worst - £250ish per month and DD would love to do more. We are lucky that DM pays a lot of that. If she couldn't/wouldn't then DD couldn't do as many classes. She is talented (according to her teachers) but I can't afford more so she has no chance of a professional career.

Phone and internet £65 per month. TV licence £13.25 per month.

@frazzledmess If the OP and her partner worked in any of the professions you quoted, I am pretty confident they would hit the joint £100Kpa target she wants.

A teacher in London at the top of the basic scale (after 6 years in the profession) would earn around £40K (I'd need to check that for recent figures) and Jnr Drs earn over £50K.

Unfortunately the OP has never come back after her first post. It means we can't really engage in a proper discussion as we don't know what she and her partner do.

The median salary in the UK for 2022 from the ONS is £31K

So the OP and her partner are well below that unless one earns £31K and the other is p/t earning much less.

I am not sure at all why she started her thread. It's as if she plucked a figure out of thin air and asked for views on it.

I'm sure if @SleepDreamThinkHuge came back and asked for advice on how to increase their income it would be more helpful to her.

Unfortunately, I've seen so many threads like this on MN and it turns out that the posters are in low paid work, and don't appreciate that to earn more you usually need higher qualifications.

@alphapie according to this link

"And among the 64 per cent of parents who said they had offered financial assistance with the deposit, the average contribution amounted to £32,440."

I don't think it's about 1980, it's about income today and the way in which people's age has a massive impact on how far their money is likely to go. If a person is of an age to have bought a home cheaply, that's at least as relevant as the income they have now. People cite median income, but leave out that there are millions of people in the UK who have been insulated from current housing costs. That's part of the picture, it has to be.