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AIBU?

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Original poster

Where is your household income?

209 replies

RoyGBivisacolorfulman · 12/04/2023 12:22

https://ifs.org.uk/toolsanddresources/wheredooyoufitt_in#tool-results-section

AIBU to think this doesn't reflect society as a whole as there is a lot of wealth especially in business that may not get classed as income?

People I know are in the top 5 percent.

The illustratous 85k that has been talked about on here is

With a household after tax income of £84954 per week, you have a higher income than around 99% of the population - equivalent to about 65.3 million individuals.

Guess people are property and inheritance rich too.

My aunts and uncles are way richer than me but my income looks better on paper. They are retired with lots of property.

Where do you feature on the scale? Clearly nobody has to answer.

It's not the whole picture far from it I think?

OP posts:
Aturnipforthebooks · 12/04/2023 15:38

Nepmarthiturn · 12/04/2023 15:27

I don't agree on your logic with this. Why would it assume that childcare costs are higher? Kids may be school age...

It was calculated based on young dependents. Even if they are at school, a single adult providing for them financially is likely to need to be working more than school hours in term time and therefore have very large childcare costs whereas two parents can juggle this between them and use fewer hours of childcare. For a start they will have a minimum of 8 weeks of annual leave to cover school holidays, not 4. With some foresight and planning two adults can arrange their working lives so that one drops off at school and one picks up for example, while both still working full time hours. This is not an option for a single parent with a full time job. Does this really need explaining, the single parents would have higher costs, while also trying to do everything in half the time? Confused

I don't agree that single parents will definitely have higher childcare costs. I know lone parents who have lower childcare costs than me because they get help from grandparents,

I do agree that childcare costs are a massive factor in this but it would make sense to ask this as a separate question rather than make a load of assumptions.

But the biggest issue with this tool is that it ignores assets.

proppy · 12/04/2023 15:39

What each of us on this thread would need to earn to feel wealthy is probably unreasonable!

I won't ever feel wealthy because of property prices. 10 years ago a house my way would have been around 700k which was somewhat achievable. Those houses are now 1.5m plus. I work with lots of people who earn similar to me but are in very expensive houses that didn't cost much simply because of age differences. Someone I know made a million pound profit because they bought in the early 00s.

Mangomingo · 12/04/2023 15:41

I’m absolutely LOLing at “we’re not rich because we spend all our money” posts.
We are also in top 1%. I know we are very fortunate and we do spend a lot of money. I can’t have everything I want but I can have lots and lots.

Highlyflavouredgravy · 12/04/2023 15:42

YunaBalloon · 12/04/2023 14:44

They're adults. Supporting them is considered optional.

Show quote history

Ha!!!

Nepmarthiturn · 12/04/2023 15:45

I don't agree that single parents will definitely have higher childcare costs. I know lone parents who have lower childcare costs than me because they get help from grandparents

🙄🙄

So might a couple.

A tool like this works on averages. For it to calculate that it thinks on average a lone parent would be better off than a couple with the same income is obviously false, as copious economic data demonstrates to be the case.

The point is that no such tool can tell you which percentage or even decile your particular household is in within even three or four deciles of accuracy in some cases if it does not factor in the very highest costs that most households face: housing and childcare. There can be no meaningful comparison unless these are included in the calculation and it is the remaining disposable income that is compared.

Therefore, per my posts that have explained all of this, the tool does not provide any meaningful information for economic comparison.

Aturnipforthebooks · 12/04/2023 15:49

Nepmarthiturn · 12/04/2023 15:45

I don't agree that single parents will definitely have higher childcare costs. I know lone parents who have lower childcare costs than me because they get help from grandparents

🙄🙄

So might a couple.

A tool like this works on averages. For it to calculate that it thinks on average a lone parent would be better off than a couple with the same income is obviously false, as copious economic data demonstrates to be the case.

The point is that no such tool can tell you which percentage or even decile your particular household is in within even three or four deciles of accuracy in some cases if it does not factor in the very highest costs that most households face: housing and childcare. There can be no meaningful comparison unless these are included in the calculation and it is the remaining disposable income that is compared.

Therefore, per my posts that have explained all of this, the tool does not provide any meaningful information for economic comparison.

I agree, it's useless but I also think your points aren't sound as you think they are.

The problem with it is that it doesn't ask enough questions about costs not that it isn't making enough assumptions about costs.

Nepmarthiturn · 12/04/2023 15:49

Botw1 · 12/04/2023 15:35

@Nepmarthiturn

I despair at the level of privilege blindness and wealth inequality

Me too. But that won't be helped by attacking the wrong targets, therefore "tools" like this which give misleading information are unhelpful in terms of establishing the policies that will fix the issue.

On that topic, the tool should probably stratify the top 1% into ten deciles of its own. This would be far more revealing. And provide a separate chart of their income levels per decile.

The actual problem that needs addressing might then become more apparent to more people.

proppy · 12/04/2023 15:51

On that topic, the tool should probably stratify the top 1% into ten deciles of its own. This would be far more revealing. And provide a separate chart of their income levels per decile.

That would be interesting

Nepmarthiturn · 12/04/2023 15:52

The problem with it is that it doesn't ask enough questions about costs not that it isn't making enough assumptions about costs.

That's exactly what I've said though: that the assumptions in the tool are such that it is meaningless and that no proper comparison at an individual household level could be made without the tool also factoring in their specific large necessary costs such as housing and childcare. Not that it should make more assumptions, that the tool should include boxes to enter individual values on these and make comparisons on the net figure.

Catterbat · 12/04/2023 15:53

Nepmarthiturn · 12/04/2023 14:13

I think it's the same issue as always- people complain they're feeling the pinch, because still need to pay private school fees or finance on 2 Range Rovers, but they don't understand this is where they spend their wealth and that they can afford it

Always these ridiculous tropes. The reality is that people earning high salaries have a large percentage deducted in tax so that their net income isn't much more than a couple living in a cheap area on a far lower salary paying less tax and receiving UC (tax free). They them have to pay high rent/ mortgage costs to be able to live where they are to earn that high salary, and huge childcare costs because they can't pay those housing costs without working full time and don't have Uc paying up to 85% of their childcare costs.

These housing and childcare costs are therefore only a "choice" in the sense that they could be avoided by giving up their well paying jobs and moving somewhere cheaper and having their living costs subsidised by the state. It would not be a good idea to suggest that the small proportion of net contributors to tax in the UK do that.

These expenses are not "luxuries" and such people are far from rich if you do a proper comparison based on disposable income after tax, benefits, childcare and housing costs.

So you’re saying there’s literally no way you could lower your housing costs and still work where you work. No cheaper areas / rentals / ex social housing within an hours drive. Righto.

Botw1 · 12/04/2023 15:53

@Nepmarthiturn

Anyone in the top 1% is part of the problem

And globally that means all of us.

Harrypewter · 12/04/2023 15:57

Single parent-2 children.
With a household after-tax income of £900 per week, you have a higher income than around 80% of the population - equivalent to about 52.8 million individuals.

Aturnipforthebooks · 12/04/2023 15:57

Nepmarthiturn · 12/04/2023 15:52

The problem with it is that it doesn't ask enough questions about costs not that it isn't making enough assumptions about costs.

That's exactly what I've said though: that the assumptions in the tool are such that it is meaningless and that no proper comparison at an individual household level could be made without the tool also factoring in their specific large necessary costs such as housing and childcare. Not that it should make more assumptions, that the tool should include boxes to enter individual values on these and make comparisons on the net figure.

Sorry, the clarity of your point must have been lost amongst all the eye rolls and patronising language you use. Never mind.

berksandbeyond · 12/04/2023 15:58

”you have a higher income than around 96% of the population - equivalent to about 63.4 million individuals”

Family of 3. We are comfortable, this makes it sound like we are stinking rich!

CuriouslyDifferent · 12/04/2023 15:59

It’s based on income - so if you are measuring wealth - you’re using the least tax efficient means of bringing home food and paying for a roof, and thus not covering the truly wealthy.

Londongal123 · 12/04/2023 16:01

VeggieSalsa · 12/04/2023 12:41

My £150k gross household income puts me better than 98%, so you’ve not used it right for £85k (which your post makes clear)

We make only slightly more than you and we're in the top 84%. I do wonder if most people are putting down their gross - it says to put down how much you make after taxes.

Londongal123 · 12/04/2023 16:02

The problem isn't even the top 1%. It's the top 1% of the 1%. When you look at those graphs, the numbers are staggering.

proppy · 12/04/2023 16:04

Anyone in the top 1% is part of the problem

And globally that means all of us.

What are you proposing?

LlamaFace19 · 12/04/2023 16:06

Higher than 48% of the population so pretty average. Seems about right. We're certainly not rich but nor do we struggle. Without kids though it would be higher than 78%.

Emotionalstorm · 12/04/2023 16:08

You have a higher income than around 99% of the population - equivalent to about 65.3 million individuals

I don't know, I don't feel that rich. I feel like we don't have enough money on most days.

Aturnipforthebooks · 12/04/2023 16:10

Emotionalstorm · 12/04/2023 16:08

You have a higher income than around 99% of the population - equivalent to about 65.3 million individuals

I don't know, I don't feel that rich. I feel like we don't have enough money on most days.

Did you definitely put in post tax income for the correct time period?

If you did then YABU.

JeepersCreeperrs · 12/04/2023 16:10

Top 6% here.

we know we are lucky. We spend within our means. We don’t have a big mortgage remaining. We aren’t dicks about it.

Emotionalstorm · 12/04/2023 16:11

Aturnipforthebooks · 12/04/2023 16:10

Did you definitely put in post tax income for the correct time period?

If you did then YABU.

Show quote history

Whoops I put in pre tax. Will do again.

thegreenjudy · 12/04/2023 16:17

If you want to feel wealthy, get some poor friends

😎

MumsyMalone · 12/04/2023 16:21

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