To think if you are a family of 4 and struggling on £100k…

[LetMeSpeak]

That it is purely down to mismanagement.

I saw a debate on social media and I also know a few people on 6 figure salaries, have extremely nice houses and cars. Yet complain that they are stuggling the same way others with less money. Aibu to think if you are really struggling even in this economy, a lot of it is due to mismanagement with your money?

YABU, people live to their means. If everyone only spent what they strictly needed then there would be no luxuries whether it be houses, cars, private education etc.

We have a household income significantly over 100k, we do have a very nice house that is much larger than we technically "need" but do not have a large mortgage and are not living an excessive lifestyle. A larger house does have a higher cost associated with upkeep granted but £500 pm for electric (which doesn't even heat the house) was never anticipated until now - and that's what we are spending. Oil to heat the house is currently @ £1000 every 6 weeks.

We also have made certain decisions we wouldn't have made had the choice not been there - we always intended to educate our children in a state school however ended up moving them to an independent school having realised how the local "good" (according to Ofsted) school was failing each of them for different reasons.

If push came to shove we could cut our spending significantly however having a large income really doesn't mean you have loads of spare money.

It probably comes down to mortgage payments, childcare/school fees and level of personal debt.

So yes I would say it's possible to struggle.

@Diamondsareforever123 - haven’t read the thread at all have you. And I vote Labour, always have, probably always will. I actually don’t know anyone under 35 who votes Tory. There must be some but not in my circle. The country is fucked for my generation and below as well. If you RTFT you’d realise larger salaries just go on inflated house prices and childcare costs for the vast majority. The Caribbean is a pipe dream.

Yes but you can't compare a family on an income of 100k to a family on 50k. Although gross it may be double, it's not after tax etc and the fact that the family on that income won't have any child benefit or other state support. I think if you conpared a family with one income of 100k to a family with two incomes of 25k then the different would be quite surprising. I considered going for a job gross pay 19k vs my current 38k and was shocked to find that actually my take home wasn't that much less. Didn't go for it as no pension included, but not regretting it

I think the point is, even if they are 'struggling' due to whatever, they are in the very fortunate position to cut their costs, including selling their house and downsizing to a cheaper one, to be able to afford to live comfortably again. 100k is a massive amount of money to the majority of families in the U.K.

We had a mortgage when it went up to 16% - and 2 kids, luckily I had a man who worked like a dog 7 days a week whilst I brought up the kids. So so different now!

Took the words out of my mouth…

@cookie4640 see that size or mortgage AND other loans on top seems bananas to me on that income. We earn 3x your household income and our mortgage is £2k. We live in a very expensive city (not UK) and compromised hugely on house size/yard etc to make sure we had wiggle room.

I think people daren't say that they are doing ok anymore because they immediately get chastised- it's boastful/ read the room etc.
So they claim they are struggling a bit too, with their bigger expenses- larger home/mortgage with corresponding bills, school fees etc .
Then they get told off for not being able to manage on a really good household income.
They can't win.

It's only those on over £150 k that will substantially benefit.

There is the basic rate of tax at 20p in the pound for those earning between £12 k - £50 k , due to drop by 1p.

Those between £50 k to £149 k are charged 40% on what is above the £50 k - £149 k. They pay 2 tiered tax over £12 k.

Those on £150 k plus are the ones winning. They pay 3 tiered tax now. £150 k plus they pay 45% tax on income above that. Income between £50 k - £149 k they pay 40%. The income beyween £12 k- £50 k is taxed at 20p.

Now that above £150 k will also be taxed at 40% instead of 45% so they are dropping into 2 tier instead of 3

That depends. IF you have a combined salary of $300,000 a year, and a DP making $200,000 a year suddenly is not working for whatever reason, the sudden change, when you've budgeted for $300,000 is certainly going to cause a lot of problems.

It's not mismanagement.

These are people who lived within their means and managed money well. They budgeted accordingly.

Then there has been a massive unexpected surge in prices.

Take for example, my friend who has been quoted £1000 a month for energy, now reduced to £800. She lives in an old Victorian property and has an aga. Nice, but not terribly easy to suddenly unpick and save money on.

Then there's people who are coming off ultra low fixed rate mortgage deals - effectively doubling payments in some cases. So very possible to go from say £1800 to £3000 plus.

Then throw in rising costs of child care that they cant avoid.

It would be fairly easy to suddenly be racking up additional outgoings of over £2k a month if you were particularly unlucky on timings and you had invested in the wrong energy/cooking devices.

Yes they absolutely can cut out more things from their lifestyles to survive but that's not due to mismanagement. That's down to a perfect storm of economic turmoil

I do think that even some of the most risk adverse and prudent are going to run into problems.

There is only one group responsible for mismanagement, and their head lives at No10.

Its scary precisely because its affecting people even high up the food chain, so to speak. It isn't just the poor finding themselves in situations where finances are causing problems.

You have to be kidding right?! You have a holiday abroad every year and you’re trying to tell me you had to watch what you spend????

I will. For as long as Labour are the only alternative, I see no choice.

we earn over £100k household income and do not feel ‘well off’. We live in the south, have two children in independent school (heavily subsidised by work), two old cars (7 & 14 yrs), no debt other than mortgage, yet we still have to be careful. We have an overseas holiday most years for one week only.

We could definitely cut back, and we do have luxuries, but not many. The main ones are sharing a decent bottle of wine most nights and being able to have a takeaway if we fancy it (usually once per week). We rarely eat out or go to pubs. Yet our friends up north & in Scotland, on much smaller incomes, seem to be out drinking and partying constantly and jetting off multiple times per year.

Someone earning £100k in the north has a very different lifestyle to those living in the south on the same wage.

Read it again. I said we used to have to when we had 2 in childcare. Like I said it's all about circumstances. We've since had payrises and don't pay childcare and can afford to go abroad

When the financial crisis hit in 2009, Oprah Winfrey did a special on her talk show - she interviewed people who had been significantly impacted.

I remember one couple who had been on a 6 figure salary and lived the luxury lifestyle to the max - the way they were impacted was that their hours were reduced, so they had to give up their 2nd (vacation) home!

I remember thinking ‘is that REALLY the best example of the impact on the average family?!

To some people, I suppose living the high life and then having to learn to budget a bit is a ‘crisis!’ 🤷‍♀️

DH earns almost 100k
Family of 5. No childcare costs as am SAHM
Its taken decades of very hard work to get to 100k and many years for me of being on my own all week with multiple small children / babies as DH works very long hours In a fairly stressful job.
We have had very skint times in the past but recently over the past few years have been much better off.
Now however, with everything rising we are really having to rein it in. We have quite a large mortgage but need enough space for the kids and to be in an area that’s a reasonable commute to London or else DH might just as well sleep at work.
No fancy cars- they are many years old and paid off ages ago.
Can hardly afford to redecorate even though some places desperately need it and now having to think about things far more carefully. But I do appreciate that I have more options that many. We are not struggling for food but we are worried about how much the heating costs and haven’t turned ours on yet despite being cold this week. I really don’t know where the money goes- we never seem to have much spare after all the bills, school trips, bus passes for kids, food bills and even cheap clothes for the kids builds up. Haven’t been abroad for years as too expensive.

OP. Life is complicated. Your are stereotyping, as a PP said: this is just like when awful people say that everyone on benefits are scroungers and lazy and wasting their money on booze/ fags. Simply not the case. Sure, there may be some but few and far between. I think your "£100k and should be rich but just mismanaging their money" people are equally rare, and just because you have met one family like that doesn't mean it's the norm of even common.

From the way you've described your views it seems you have little understanding of how the cost of living varies in different parts of the country. And for many earning those salaries, they have to be in those expensive areas to do so. Buying a cheaper house in the same area where they would be overcrowded would be expensive to do in itself. Moving away entirely means their job isn't doable anymore so they would earn less and negate the benefit of cheaper housing.

If you'd like to hear my own anecdata, here you go. Please do tell me at which point I was being reckless and mismanaging my money in an extravagant way:

I had been in a relationship for 10 years, living together for 5 of those. Then got married. Then three years after that we had a child and then another one less than two years later (as we had always planned: small age gap).

We owned a house together already at this point, bought just before we got married. Before the eldest turned two, he left us. He has no contact with the children. Unexpectedly, I found myself to be a lone parent.

After the second child was born I also became disabled. Despite this, I went back to work after a short maternity leave to provide for my children.

I earn the money you speak about in your post - over £100k. Mainly because I worked double the hours in my 20s that most other people did. But this income means I get no child benefit, no tax free childcare discount, no 30 hours funding etc. No help at all. Both of my children also have additional needs which means they cannot attend normal childcare settings for long hours so I have to hire private nannies even though one child is now at school. If I didn't do this, I would have to give up my job and be unable to house the children, the state would have to provide for us instead. Or, we continue as we are struggling to pay a large mortgage and huge childcare bills that eat 70% of my post-tax salary.

My health continually deteriorates under the stress and physical demands of it all, but if we were to move away somewhere cheaper I could not earn the income I do now. Especially as most employers are just crying out to employ lone parents with disabilities who need flexible working.

Do not judge people whose lives you know nothing about.

Oh yes - no fancy car here either. Watching the food budget closely. Worrying about the heating. I think you really have no idea about the childcare or housing costs in many parts of the country OP.

And on top of that, I have to do all of the stuff SAHMs do, or working mums with a partner do, and manage a demanding job, and my own health issues, and my children's health issues. It's insulting to be told by you that because of some headline earnings figure we're living the life of riley. A sick joke really. Especially when as well as only having 24 hours per day to do all of this while a couple have 48, I'm also taxed more on the same household income than if a couple earned £50k each and shared the childcare/ household stuff.

It's not easy, there are no simple ways to make it easier. Short of what, you want me to uproot my kids and move them somewhere cheaper away from all of their friends and my support network of friends and quit my job?

A salary is meaningless if you don't consider the expenses that come with it. The mortgage, the childcare, the commute into London, etc. Comparing someone living in Bolton to someone living in the SE and commuting on any of these counts is as meaningful as comparing my living costs to someone in Panama or South Africa or Sri Lanka. Income is only relevant in proportion to costs. I also think people who write things like you have generally don't realise that takehome pay from £100k is around £60k. Hardly a fortunate if your mortgage is £1500 for a modest house and childcare is £2000 or £2500, is it?

I agree entirely with this.

This is also the plan: get low earners to turn on higher earners and ignore the fact that the ONLY people who benefit from these changes recently are extremely high earners.

It was known that doing this would cause interest rate hikes therefore more inflation therefore also interest rate hikes therefore make everyone poorer than they were previously. You get a 1% tax cut next year but GBP has plummeted so your fuel and energy and food will cost way more, your pension is worth less, your mortgage needs to be refinanced and it will be £££ more than you save. If you rent the landlord will pass that on!

Qui bono?

We know who.

It's not the families in more expensive areas of the country who earn higher headline salaries to compensate for the huge amounts of tax/ housing costs/ childcare costs/ commuting costs/ even higher food prices that they pay.

It's the super rich. The Times reported today how two FTSE 100 CEOs will save over £200k each per year from these tax cuts.

Everyone earning under £155k will be poorer, and that figure may well rise rapidly given what is happening to GBP - you may soon have to earn much more than that to be better off from tax cuts when interest rates rocket further. It won't offset, at all. As all economists are screaming.

Let's hope that the country that had "had enough of experts" finally wakes up and starts listening to them. Won't hold my breath.

Having a go at people on £100k is basically stirring infighting in the working class from a Tory perspective. Deflection. Squeeze the PAYE again, get the lower earning ones to blame the rest. All very "don't look up".

It's double our (2x adults working ft) salary so dh and I would consider ourselves rich. Our children would benefit too.

Not if you lived in an area where - to be able to do those jobs that earned you the double salary - your costs were doubled or more as well.

Why is it so hard for people to understand this?? You can't compare a London salary to how it would feel living on it in rural Northumberland. Look at what housing and childcare and commuting costs you'd have in London to maintain your current standard of living, and then calculate that against market rates for your current jobs in London, and then you'll get a clearer picture and probably discover that you'd have a worse standard of living than you do now.

We can't keep hammering people with hugely higher tax rates based on headline figures with no regard for the cost of living differences in different areas.

I'd love to have a Swiss or Monaco or Luxemburg salary but stay living where I am. This is fantasy. If I want that I need to go and live there and much of it will be swallowed up with higher living costs because guess what?! Shocking I know, but lots of other people want that too so ut costs more!!

Assuming living everywhere in the country cost the same in childcare, housing, commuting similar distances, food.

Newsflash: it doesn't.

Why don't you do an analysis if median earnings by region post tax and median costs including all of the above by region and then report back?

Otherwise, you are comparing an apple to a pear and have no point to make whatsoever.

Honestly. It's bonkers people don't get what these basic terms mean, isn't it?

We didn't struggle but we weren't flush. My partner earns 100k but has massive pension contributions (1k per month) and as she was the single earner paid more tax than if we were both earning 50k each.

As I was retraining (COVID killed my line of work), we paid for childcare for 2 children full time (£1600 per month - £17.5k per year) and as gov support for students is means tested we only received 15 hours per week per child. Our mortgage is £1300 per month.

This meant as a family after childcare and pension, mortgage, we had about £1.7k per month, which is not an amount to be sniffed at but is also not the colossal sum that some people might assume.

Definitely not struggling and feel very lucky, but at no point did we feel rich.