Is £85k a good salary in London (family)?

[SleepDreamThinkHuge]

You may have been aware of a recent Twitter post where one guy was saying £85k a year in London for a family means you will still struggle. Other posters were saying it is not comfortable and definitely not rich. Others were also saying that £85k means your income is higher than 95 percent of the population in the UK. And some have mentioned just because you are £85k you do not need to send your child to private school it is a choice or buy a financed car.

Where do you stand? I can see both arguments but as someone who lives in London how I would love to earn £50k+ let alone £85k. Working in the public sector in a job I like means I earn just over £32k. In the near future, could earn closer to £50k in the next 5 years if I train, and take a more team leader/management responsibility. I think I am not the only one. A lot of people assume just because you live in London you are guaranteed to earn over £50k easily. Many professions are earning less than £50k in London (nurses, teachers, some doctors, police, public sector workers, banking staff in branches etc...

It doesn’t say that. It says the median salary, not the average.

Well presumable the poster was talking about the median salary of the uk which was 30k several year ago and is not low 30s. Still irrelevant comparing any type of average salary for the entire uk when discussing London.

I had more disposable income on 35k pre kids than I did on 85k post kids. Went from having a lodger in my spare room helping pay the mortgage to having to pay all my housing costs plus student loan of 600 a month plus childcare of over 2k a month just to be able to work. There's a nice explanation of the tax rates here that explains well: https://www.taxpolicy.org.uk/2022/10/04/marginal/

So for a couple in a shared house with no kids it's great! For a single person not so good as costs are fixed and the taxation rate is higher. For a single parent family needing paid childcare, good luck living on that in an area where childcare is half your take home pay and rent is the other half, especially if you want food and heating too.

The page header says median, thd table header says mean.
I think its probably median though cause there will be a number of very high earners so would expect average to be higher.

@Albiboba

I said in the real world

Not London.

😉

But you're just proving the point that at double the median for London, 85 is a good wage

Most of our money goes on rent, bills and nursery. We don’t really buy anything other than groceries and the budget is very tight. My partner does a lot of WFH around childcare and I work part time. We saved up before having children by doing house shares and working extra hours and we have small children so perhaps less outgoing than with teenagers. Our holidays are fairly modest. We do a lot of free London things and don’t really eat out/ order in. We’re quite into membership discounts and voucher type things when it’s something we really love (eg, London zoo membership is about £150 a year for unlimited free access, toddler time cinema is £3 per child & adults go free, I wild swim, we do a lot of free museum stuff, National Trust is £10 a month).

don’t get me wrong, money is tight, there are compromises and we may well have to move at some point, but it’s also possible.

Yes, I've acknowledged that and my privilege that I was in a position to do so at that time. I took on what was to us a large mortgage (at 5.89% from memory), and through earning\saving a few extra quid here and there started chipping away at it with zeal so we could reduce the LTV, and improve the mortgage rates available to us. Every time we the monthly payments dropped we kept our payment the same, apart from when we had young kids in FT childcare and could not afford to do so.

In your next message you say posters are 'blissfully unaware' which I am very far from. I used to be on benefits and in social housing and before that private renting on a low income - I know what real poverty/struggling feels like and 85k a year is not that!

I've mentioned the ways we manage to make 85k work for us, these may or may not be useful to others but I don't find your continual aggressive comments on this thread to anyone with a different perspective helpful at all.

sorry, it was actually 'blissfully ignorant'

Haven't read the full thread.

I have taught Economics for 12 years.

A surprisingly large amount of educated adults don't understand the progressive tax system.

How do I know? I spot check friends with GCSE questions from time to time!

Our household income is a way below 85k, but we live in a cheap area, and there's no way I'd consider relocating to London for that wage. We own and have some equity so we'd be able to buy something, it wouldn't be a private rental situation. But the drop in lifestyle it would entail if you're coming to it with childcare costs and without the benefit of a decade of London equity/bank of mum and dad would be so significant.

DH earns that, I’m not working right now and we have 5 dc. Years ago I would’ve laughed at anyone saying it’s not a high income. It’s £1800 after mortgage and council tax, £1600 after utilities, £1000 after food bills and groceries…. So about £35 per week per person to cover everything from clothes, to sports clubs, to transport, running a car, internet, holidays… it’s not as wild as I once imagined it would be tbh

Obviously if we earned £42k each it would be better. Child benefit, less tax etc. considerably so. We used to, but had a disabled child

@Phineyj

You sound a right laugh

@Disgustipated

5 kids is definitely a choice!

@Botw1

£85k after tax and pension: £4600 per month

Zone 6 flat tiny one bedroom (the one I used to live in): £1300
Day nursery for under three year old: £2000
Wrap around care for school age child: £500
Zone 6 travel card: £288
Council tax Band B including single person discount: £97
Utilities: £150
Phone and internet: £40

Which leaves you with £225 month for everything else including food and nappies.

The one bedroom flat isn’t suitable for three people and I doubt many landlords would even agree to rent it to a family of three - a lot say single person only. Cheapest two bedroom is £1500. But that would leave you with £25 for food, nappies and everything else.

@Dibblydoodahdah

Presumably the single parent in your scenario wouldn't have been daft enough to have another child they knew they couldn't afford?

@Botw1 but what happens if the DH/DP becomes abusive and they have to leave with nothing….a relatively common occurrence on here. Yes, no one would choose this life but people do find themselves in these difficult circumstances. Lots of people don’t choose to become single parents. I have a friend at the moment whose ex DH is refusing to leave the former marital home and sell up. This has been dragging on for two years. Meanwhile she has to house herself and two teenagers. Yes, she will be fine eventually when she gets her share of the equity out of the house. But at the moment it’s a massive struggle for her.

Then they would get maintenance?

And would have had a double income ore split so presumably would have had some savings?

It's also just as easy to make up an imaginary scenario where someone on 85 k isn't struggling at all

1 earner on 85k with a sahp. No childcare fees leaving a disposal income of 2.5 k.

So many out of touch posters on this thread 85k a month is definitely enough to live in most parts of London

😂 I don't just randomly offer. It comes up...

There are a surprising number of people out there who don't have a clue how anything in the economy works.

It's not great to pay into a tax and pension system you don't understand.

@Phineyj

People routinely ask you to set them gcse questions about tax?

Then your friends sound a right laugh aswell!

I am often doing piles of marking when e.g. volunteering at child stuff.

I wish more people would take an interest. Politicians get away with far too much because people don't know the right questions to ask about taxes and benefits.

Anyway, I will get down off my hobbyhorse, as hopefully someone already explained disposable income earlier in the thread.

I personally cannot understand how anyone who isn’t very well off can afford the housing in London. I used to live there (left about 5 years ago) and paid £800 for my room in a two bed flat - £1600 total between me and housemate. It was extremely difficult. DH and I pay that now on a mortgage on a four bedroom house (very far from London).

I still look on rightmove frequently at different areas of London and it’s just so expensive, I don’t know people with everyday jobs such as nurse/teacher/retail/hospitality are actually able to afford the property costs.

@Phineyj

What do you think they dont understand?

Does disposable income need explaining?

Well, some of them are insulated from those costs, as many Londoners are, because they bought a long time ago. But I agree, no idea how anyone under about 40 does it.

We have an income of c£100k, I work in London hybrid (so already get London allowance) but am 70 miles away. My 4 bed detached house cost us £350k. To have our house even in Milton Keynes would be c£650k (new build so easy to compare). £350k would buy a substantially smaller home and would be an entirely different to the lifestyle we currently have. It's very hard to comprehend how we could live in London comfortably and thus happily. (As it happens we did live in London years ago, but had accommodation through work so wasn't an issue, we love London, I would happily move there, but do not feel our wages are high enough).