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?

It's over 4k even if you pay student loan (bsc and masters). I think it's a lot of money. If two people make it, it's even better tax wise. If someone says it's not enough, it's probably due to high mortgage, expensive holidays, meals out, designer clothes, but it is enough for decent lifestyle. It's your choice if you decide to be ekhm... poor with this kind of money.

Of course it is, just not Central London or SW. or you might just end up with a smaller property (a large flat instead of a house) if you want a posh area.

Plenty of suburbs in London to choose from, you don't need £100k household to buy a house.

It depends on their lifestyle. If you want a lavish lifestyle (2022 plate, private schools, different outfit daily, holidays abroad 3x a year, no food budget, eating out 3/4 times a week,) then, no, it's not going to be enough.

It’s decent but tax takes a huge chunk. At £100k you probably have higher outgoings for your lifestyle. It cost me £800 a year 15yrs ago in London for a parking permit to park one car outside of my own door.
One child at private school will be fine, two is a real squeeze.

I could live what I would call a luxury lifestyle on that much!
I think the key is to keep living as if on a much lower salary and build up substantial investment and savings.
Don't let the life style creep up on crap.
Then gently upgrade where you want
Eg eating out once a month at a gourmets restaurant not the harvester

Then save your deposit and buy your house, then have kids. It’s not rocket science.

If I had to pay today's rent it would take me years to save & I likely would not have dc. which is one reason our birth rates are so low.

A combined gross income of £100k would let you live a comfortable life in most areas of the U.K. There will be exceptions to this due to house prices in certain areas. Not just London.

For us it would not stretch to things like private education - we would need to downsize our home, share our car, miss family holidays etc to afford private education for 2 x DC on £100k gross. So we couldn’t have the same lifestyle at the same time.

But £100k gross means we can be comfortable - we can shop without worrying too much about the total spend, eat out as a family (within reason!), book U.K. holidays and weekends away, maintain the family home etc without stressing too much. A big bill like a new washing machine, or a car repair wouldn’t cause too much stress either.

So, a very comfortable life imo. But not incredibly wealthy. But then it depends on what you view as wealthy - I was raised by a single parent who struggled financially. So I feel incredibly well off not having to worry about having enough money to feed my children.

Well it really depends. Let’s say both of you do jobs which require long hours - so need lots of out-of-hours childcare or overseas travel. And what if your commute costs are high? What if you need to study in addition to working in order to progress, do expensive courses…. It can add up.

BUT in the majority of cases - it would probably be fine to live but might be tough to save up a deposit.

I live in Scotland with a combined income of £93.5, don’t have a fancy house, no fancy cars, one dog, one baby, it’s tight!! Everything is so bloody expensive these days.

That's our household income. We are very privileged but even up north, with childcare costs and energy costs rising, our income doesn't go far. We drive a ten year old Skoda. Can't afford a second car. We don't go on fancy holidays. We have savings but not tens of thousands. So yes, it's a lot of money but no, it doesn't go far and we don't feel rich. Even though I know how lucky we are!

@spongbob where out of interest? The cheapest areas I know are still about 450k for a house.

If you put it like that anyone in Britain, even the disabled on benefits aree better than the global population.

Its the essential costs that are high. Housing, childcare (that you need so you can go and earn that money).

Yes, but you don't need >100k to buy one. I know that's the going price, unless you're paying cash, 100k or less is fine. Save up for a mortgage.

Exactly... If I had to wait to buy my own house, I would probably start trying to conceive near my 35-36 which is too late for me if I want to have 2 kids. Some people think life is so obvious and simple. Do this, this, that and then have children. Life isn't a manual to electric appliance.

You could probably benefit from some lessons in budgeting from someone on an income a fraction of yours. I bet they could find a myriad of ways to loosen things up.

Housing costs are disproportinately high in London.

An income of £100k might allow you to borrow £450k, to be paid back at £2k+ per month.

There aren't many family homes (3 beds) anywhere in London for that price! It would be cheap even for the zone 5/6 suburbs. You're looking at some combination of very small, very suburban (high commuting costs if you work in the city centre), run down and ex-council basically. Not the kind of house you would imagine a "high earner" to live in.

Privilege is a strange word to use.

Like everyone else has said it's all about outgoings. Take these 2 people I happen to know quite well:

Friend 1 - lives in London, household income well over £100k. Take home pay per month £6000.
Monthy costs: mortgage & remortgage= £1800, school fees= £2400, food = £700, bills, cars etc.= £1000.
Disposable income = £100

Friend 2 - lives in a northern city
Earns £70k joint income, Take home £4k (lose less in tax as split between 2 earners rather than 1)
Mortgage = £700 (includes significant overpayment), childcare = £200, food= £400, bills (cars owned outright) = £600
Disposable income= £2100

Both have pensions etc.

Depends on your situation. I'm on 102k, husband on £70k. We are lucky enough to have no mortgage, own cars outright (no interest in upgrading them 2 yearly like some do), kids in state education, no expensive interests/hobbies. It feels very comfortable and I'm prioritising getting as much in my pension as possible so I can retire at 60.

Some of the equity partners at work earn 3 x what I do and moan it's not enough (yes really) because they have a huge mortgage, new car every 2 years, 3 kids in private school, hobby is sailing/yachting, wives don't work and have expensive taste etc...

@BarbaraofSeville what if your ‘expensive choice’ is to live in London, where you’ve grown up, all your family and friends live, your job is etc.

So many younger people are being priced out of London. I don’t feel like living in your home city should be seen as a luxurious discretionary choice.

I’m in my 30s, from London and most of my friends are worse off than their parents - we can’t afford to live in the houses our parents bought in the 80s. My mum stayed at home when we were young and my dad was a teacher. Their house is worth around 600k now and it’s a modest 3 bed in Zone 5.

Lots of people are moving out because London is unaffordable. I know it’s still a privilege to be in the position of moving out to buy somewhere - being able to buy somewhere at all, even if you’re not in the area you want to be, is very fortunate. But please don’t present it as people making poor choices/wanting to live a luxurious lifestyle.

@spongbob I'm confused you said you don't need £100k household to buy a house but you do for a 450k house.

Save up for a mortgage.

what does that even mean?

It’s all relative. We have a household income of £130k, but it’s not exactly high rolling. About £1.5k a month mortgage, loads of bills and insurance, £450 on commuting and parking, £300 car, £2k childcare all adds up.

We have a couple of holidays and lots of coffees out, but we still buy clothes at Asda, look for deals etc. We don’t do expensive days out very often either.

It helps that some of that income is in a bonus lump sum once a year, so that isn’t included in monthly expenditure and forces us to live within our means month to month and then we have savings for home improvements and holidays.

I appreciate it sounds like loads of money to some people and that we are very fortunate to not worry about bills. The more you earn the more you spend IMO.

We have a combined income of almost exactly 100,000£. We absolutely do not lead a lavish or luxury lifestyle. We have two children and high mortgage payments, childcare costs, car payment (not a brand new car either, but a nice car), and fuel bills through the roof. On maternity leave at the moment so money is particularly tight but even when I’m working we don’t go abroad much and even holidays in the UK are expensive to us. We don’t buy lots of new clothes or things like that, I (happily) wear clothes I’ve had for years. We can always pay our bills and we are comfortable, for which I am grateful, but there isn’t a lot left over at the end of the month. We are eating into savings during my maternity leave.

To me, the income we have sounds like so much money but it just doesn’t seem to go that far.

Of the people I know the truly privileged aren't those who earn well, they are the ones who have family money - the ones that got given £100k 15 years ago to get on the housing ladder and now have granny and grandad paying the school fees. Earning an extra 2k a month is lovely, but the big purchases like houses, are hundreds of thousands of pounds.

We're on a household income of around 90k in SE London, two children, one in school, one in nursery. Childcare takes about 12k of that, and housing takes a big chunk too. A 3-bedroom home is completely out of our budget, so we're renting a 2-bed, and considering moving out of London. Our fixed expenses are reasonably low, so we're able to save a decent amount every month, and I feel fairly financially stable, but it doesn't feel like a sustainable long-term arrangement.

In the meantime I'm very aware that we're better off than a lot of people, but London's housing situation means in many ways you're better off on a lower salary in a city with lower housing costs than a London salary and high housing costs, both renting or buying. There are families with a lot less than us, and I'm aware how privileged we are and we've upped the amount we donate each month, but it still doesn't feel like enough.