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?

Bought 2 years ago. Had a deposit from previous flat, but would have bought a cheaper property if hadn't been able to afford this one.

so when did you buy the flat?

@Topgub Read your last post again. It's a contradiction. The fact that London salaries are higher to reflect living costs, does not mean that those people are living in luxury! It means they are usually just breaking even, the same as people on lower incomes in cheaper areas.

The London-weighting or higher salaries rarely bridge the gap completely, for a start.

You also need to think about net pay not gross pay. In London it's normal to pay £2000 per month for a 2-bed flat as a rental. £100K net doesn't seem a lot then.

Have a mortgage, with deposit from previous flat. But would have bought 2 bedroom flat instead of 3 bedroom house if necessary for deposit.

Council tax and gas/electricity £190. Water would need to check. We use about half of the estimate for a 2 person household.

@SunniestSunshines

Luxury is subjective.

Its not a contradiction.

Its still a lot.

Being able to afford 2k a month is a lot!

Feel free to Google Council tax bans. I get 25% off as a single parent, despite being the only earner so those with 2 earners presumably pay 50% each instead of 75%

I do think people are being a bit disingenuous if they're telling us when they bought their most recent home rather than when they got on the ladder in the first place. Because clearly a person who first bought in 2020 was in a vastly different position to a person who bought on the same day but sold a property they'd purchased in eg 2010 to do so...

@Runnerbeansflower So...if you had equity from a previous property, how did you buy that? Did you walk away from a partner and come away with a big chunk of cash?

If your mortgage is £900 a month you must be earning a pretty good income. Certainly over £40K I'd guess.

@ApplesandBunions exactly, it's completely disingenuous! Accusing people of being entitled because they don't want to live in a flat without garden. It's like me saying I don't know why anyone on the same income can't afford a house ignoring the fact I had help to buy a flat & gained equity!

Just love a judgemental post 😂 tell me how would you go about re doing our budgets when you know SFA about our finances?

and as I've pointed out frequently you need to be earning close to 100k to get a 400k property & it will be a lot more than £900 a month repayment

Not sure I could manage school fees on my £90k salary. That's just enough for a modest home, running two cars, commuting, rising electricity bills, an annual holiday and an otherwise pretty mundane and ordinary weekly shop and other regular expenses like insurance, TV license etc!

The average cost of a private school is £15k a year. If I paid for all my children that would be about 75% of my net income! I don't think the extra £6k net would help much if I earned £100k either.

Wrong!

But my point is, I could have bought a 2 bedroom flat for a lot less. Lower mortgage, Council tax, utilities. Closer to the Tube. The equity allowed me to buy s house with a garden, further away from the Tube.

My point being you make choices with what you have.

Not that you can have whatever you want.

And £100,000pa gives you waaaay more choice than most

I'm not sure that point you're making now @Runnerbeansflower

You seemed to be arguing up thread about what is a necessity and how people can live frugally on very little.

But from what you have said, you aren't doing that.

You had equity to buy your home on your own, so you owned a home long before the huge increase in house prices, your mortgage is £900pm, and you are eligible for some reductions owing to being a sole occupier in your home.

You will also get child benefit and maybe tax credits or CM, which can add up to quite a lot.

IF ( and this is an assumption) your mortgage is 1/3rd of your total income, I'd hazard a guess your total net income per month is equivalent to £40K gross (which is what the OP's joint income is for 4 people in her family.)

It’s 4 times my salary, and 2/3 the value of my house, so yes, I would consider it a lot of money.
Even if it doesn’t cover all the luxuries people want, it does give you more freedom and choices than most people have.

You seemed to be arguing up thread about what is a necessity and how people can live frugally on very little.

But from what you have said, you aren't doing that.

It's what others should do but not me! 😆😆

I'm sure your salary would be considered 'luxury' on an international scale @TopGub. Doesn't mean it buys you any such lifestyle where you actually live. It's the same for someone on £100k in London. I don't see the point of this thread as it's all relative.

Also, of course "hard work" per se won't always equate to "high salary." When did it ever?

There are many forms of "hard work." Maybe the key is not to "work hard," but to "work smart."

The richest people in the U.K. are not salaried anyway. They are the ones who drive the economy and create salary opportunities for other people! But not everyone has the drive, imagination or enterprise to take the high levels of risk involved.

I think you are being disingenuous @Runnerbeansflower about your net income. You had a leg up with equity bought before house prices rose dramatically, you will get benefits of a kind for your child and you are not badly off.
I know Merton - lived and worked thereabouts years ago. It's not a cheap area.

Let's say £100k and only 5% pension contributions.

One person working (£100k): £5.2k take home

Two people working (£50k each): £2.9k take home each, i.e. £5.8k total take home

The couple who split the £100k between them is up £7.2k a year already.

£5.8k. Is that a massive amount of money? Well, let's say 2 parents and 2.4 children. Boy, child and a baby. You want a house with at least three bedrooms (baby can bunk in with the parents for now and the two kids should ideally not share as different genders).

Ignoring the auction, cash-only, sitting tenant and short lease listings, you're looking at a flat in zone 4 for £300k. 10% mortgage, standard 25 years, 4%.

Mortgage - £1,531
Travel x 2 - £414
Council tax - £129
Service charge/ground rent - £65

That's £2.1k down already, without anything to eat, no utilities, no general groceries, and without any childcare.

Let's look for a nursery place for the baby for 5 days a week. £1.2k.

Let's assume we can get breakfast club and afterschool club club. Say £13 a day per child, so c. £584 a month.

Right, so that's £3.9k down just on a roof over their heads, travel to/from work for the grown ups and essential childcare for the kids. That leaves £1.9k for food, groceries, bills (e.g. phone, internet, etc), medical stuff, dental stuff, clothes... for 4.4 people. And this is before even thinking about fun stuff like socialising and holidays. We're just talking the basics of life.

Of course households earning £100k are lucky. But when you start to crunch the numbers, you end up in a position where you have to start budgeting properly, rather than just buying whatever you feel like.

£100k makes you quite happy as a single person. Add in an average sized family and that's when it starts to disappear quickly in London.

Thank you! We are the same, three kids, at least two holidays a year one week skiing and another summer holiday abroad. We live on the edge of London. One kid in private school. I don't know how people don't realise that 100k is a lot of money wherever you are.

@aquatastics

I'm not sure of your point? I'm better off than half the uk too. I earn more than the national average.

The richest people in the UK are mostly there through exploitation.

I'm not sure we should be 'grateful' for their contributions to the economy

@3WildOnes I don't know how you make 100k stretch that far?

It's certainly enough, but it's all about what sort of lifestyle your friends have and expect you to be able to afford. I earn slightly more than that, and I'm viewed as poor amongst the Oxbridge set. I think mainly because I opted out of the London race and they all think I moved because I couldn't afford it.

My income is below £40,000.

I Iived for many years in a 2 bed flat with 2 DDs. No garden. Because that's what I could afford.

Then I sold and moved further out, once DD1 left home.

I get child benefits, but no other benefits except for the single earner Council Tax 25% off.

I bought a larger property than I needed because I could afford to. If I couldn't afford it I would have survived without the garden and spare bedroom (which is DD1's room when she visits. But is used to sharing with DD2 and mostly they share from choice and stay up chatting and giggling when she visits)

Why is that so threatening?

£900 at a typical interest rate of around 2.2% at the moment over a period of 25 years. Hang on, I'll check on my financial calculator....

I work out that it would be a mortgage of a little over £200k. You'd need a salary of about minimum £46k maybe to get that. However, that's assuming it's a 25 year mortgage of course and that a deal can be found on that income!

I can afford a mortgage in London on a low income having got on the ladder a long time ago is not really making the point that you think it is...