How are people surviving

[Truthseeker456]

I don't get it. One income and I am on a what was a good wage 53,000. My mortgage is likely to double next year I have nursery fees and 3000 take home and always in my overdraft. How are people surviving, we don't hear anything in the media. Rents are also though the roof

We would have much lower taxes if we were a city state but we are not. We are the capital and that means having to subsidize the rest of the country. Only London and the South contribute more tax revenue than they consume. But the rest of the country needs healthcare and education; we can't leave them to fend for themselves.

Mind you, I come from a small city state so I know of all the disadvantages of living in a small country but also concede that in a city state the tax burden is much lower as there is far less infrastructure/citizens to subsidize.

You have missed entirely the point of the post

If that were me I would find a top up income of my own. Even two days a week but it is health permitting as not everybody can. Is this not possible Cosmos? Is there something you can do online that would generate extra cash?

@rosetintedmemories2023

If it wasn't the case that the best jobs and opportunities had historically been located in London then we wouldn't have such an inequality in tax contributions across the country.

Your can't complain about 'London paying for everyone else' when it's grabbed the piggy bank and run away holding it above everybody else.

We'd also not have the hugely skewed house price situation that comes from London being so overcrowded.

Thankfully there does seem to be some appetite to change this but I fear it will be too little too late.

Yup thats london. You really cant compare. The only people i know who own a house in London either inherited or bought it 30 years ago.

People earning £50k+ but paying high rents/high mortgage cost and not entitled to any benefits help will be much worse off than people on much lower/no wages living in social housing or having most of their rent paid by UC and getting a lot of UC if they have kids.

Benefits have just gone up by 10% while most post people in full time jobs haven't seen anything like this. Not everyone on benefits is poor, sometimes they are actually quite a bit better off than people in work when you factor in things like having to pay prescriptions/glasses, travel to work, council tax, not getting any low income/UC discounts for things like energy/internet etc. Plus, wages are taxed so even if you are earning £50k or £70k, a massive chunk of that is taken off with tax and NI (40% over £50k! so they are not actually taking that home!).

Not to the equivalent of a £50k salary though!

That's a huge generalisation. There's a big variation when it comes to benefits. I work full time and get UC, I pay full council tax and pay for prescriptions, dentist, school dinners and glasses.

There are people who are higher rate taxpayers who get UC, as a consequence of our housing and childcare being so expensive. That number will probably increase. Its not either/or.

That said, I agree with the poster who said people talking about how they manage on much less should also tell us how much subsidy they're getting and what their costs after housing and childcare are. There are going to be some cases where its not very different to the higher earners being discussed.

Yup exactly. It sounds crazy when you write £50k on paper and say you're struggling, but it's very possible. There are those on UC who are much more comfortable than those earning even 100k combined. Obviously this isn't always the case, there's lots, especially disabled families, where this is certainly not the case.
People do forget just how much the state subsidises, esp those on the lowest centile. The squeezed middle has always had it the worst.

Sorry, you said "we hardly go out and can rarely save much at all", which was why I made that comment - what do you class as hardly going out and ad hoc? We hardly go out (have never really done), but we still get a takeaway three or four times a month as that's always been my night off cooking, and just for a change. We live in a fairly deprived area so I assume large numbers of residents would be classed as low income, but the takeaways are always busy, the queue of Uber drivers in McDonalds and other outlets is constant, and the pubs and restaurants are still full - many will be finding it hard, but many are also getting on okay, IME.

So true, even people - who worked hard and own an ex-council leasehold flat - are shafted with extortionate 'major repair works' bill of £35k plus compound interest with the idea that whenever you decide to sell and move on or die (most probably) that allows your council to then effectively confiscate your property. When I offered to sell back my place to the council, they only offered 80% of what I paid 4 years earlier and you wander why council leaders are on those sky-high eye-watering salaries and then some..

It's likely that @Lavendersquare is an example of the type of person I posted about upthread.

Their normal spending (housing, bills, food etc) is the expensive version that costs far more than average, so all their money goes on what they see as a basic lifestyle with no room to free up money for extras.

I wouldn't go as far as always had it worst. The whole point is that childcare and housing costs (and subsidy) vary so much that anything but the broadest of generalisations is pointless. People should look at the whole picture.

The usual response when people didn't want to hear this was always that the expensive housing for higher earners will at least be building up an asset, but increasingly even that won't be true. Being a higher earner is no longer any guarantee of being able to afford to buy a home in some areas of the country.

It depends. My friend gets UC and 85% of her childcare costs back. She gets £1400 just for childcare. I get no help at all towards childcare costs, bar the tax-free childcare scheme.
That's not all she gets. And yes, it equates to a lot more than I take home from my 50k salary.
I'm glad she gets that, I'm not trying to benefits bash as I am very glad to live somewhere where people are helped in this way and I know once we both stop paying childcare I will be massively better off than her, but the fact that things will get much better in the future doesn't mean it's not really hard for someone paying mortgage/rent and childcare out of a 50k salary

But someone on a £50k salary could move up the career ladder. Someone on benefits has no chance of that and when the kids leave home, no more child benefit and subsidy.

Also the ability of the state to subsidize the lowest earning is dependent on our ability to borrow aka the kindness of strangers. At least with a job, you aren't dependent on someone's kindness. Yes wages have stagnated but when you are in a job, there is hope.

I suspect the thread provdes the wisdom of the old saying - comparison is the thief of joy.

However there is a very valid point that people who have their housing provided by the state and get childcare help and some benefits may well be on a package which is higher than some fairly high salaries when it is all added up given how much is taken away in tax from workers these days. student loan repayment/tax alone is 9%. Childcare can cost £22k per baby in London so if you have to babies that is over £40k just so you can work with child cared for 8am to 6pm to allow for travel time. That comes out of already taxed salary and is not always shared with a husband as a cost so you need about £67k before you can even start to make £1 of good never mind travel expenses to work, rent etc.

Absolutely agree. With my job there is no chance of my wages going much higher than 50k but I'm fine with that, and once I don't have childcare to pay I'll feel pretty well off and I'll certainly be better off than my friend.
I'd rather be in my position, and as I said I don't begrudge my friend anything she receives. I was just trying to highlight that actually, someone can receive UC and various benefits and actually be much better off than someone on 50k. The fact that once OP doesn't have childcare to pay she'll have lots of spare cash, or the fact her wage might go up in the next few years doesn't really help her now though.

Your portion sizes are far too large 60g of pasta is the recommend amount and surely you are bulking up the mince with mushrooms , peppers , onions etc possibly lentils so you only need one pack.

This is because the Western welfare model subsidises the poorest in society and the assumption is that the middle class is rich enough to meet their own needs except for things like healthcare (which is very expensive and tend to be required when one is retired and on a fixed income). This state of affairs has been breaking down as the purchasing power of the middle class is slowly being eroded through successive years of poor economic growth. In the past, the middle classes have afforded their relative independence through restricting the number of children they have, buying houses in further out locations, postponing childbirth etc and this worked well provided there was economic growth and increasing salaries.

The reality is that things like housing and childcare are incredibly expensive when determined by market forces (childcare is regulated and requires low carer to children ration; housing needs to be built and there is a shortage). So if you combine that with stagnating wages, you get the crisis we have today. Where the middle class starts to resemble the poor.

This is why I think its not very helpful to think 'I am on a good income and therefore I deserve XXXX'. If you are not the top 1% in wealth i.e. £3 million in wealth, you are the 99% and therefore you share the same problem- decline in living standards and hoarding of extreme wealth by the top 1%. We shouldn't bicker with each other. Yes we experience the cost of living crisis in different ways but we shouldn't let this divide us.
Xenia, you have said many times you have no savings and no pension so honestly you should join us as well :)

Oh yeah, I know some people will get that, I just meant that I personally don't. I don't need childcare as my DC is 15 so I don't claim for that.

https://www.spectator.co.uk/article/the-strange-death-of-the-british-middle-class/

This was written 10 years ago, it still rings true.

Are people still contributing to pensions and retirement savings? Financial advisors always say to treat those as fixed expenses but I think the reality is that these are one of the first things to go.

I wouldn't mind so much if we'd actually been allowed market forces in relation to housing in the UK, but the market has been continually and artificially inflated over the past dozen years. Prices might be cheaper had we actually been allowed a post 08 proper correction, but instead we had stamp duty holidays and help to buy schemes that primarily served to enrich people who already owned.

Agree with the rest though.

The housing crisis is global. If you look at the likes of Australia, New Zealand, Canada, USA, it is worst. Perhaps that is the effect of low interest rates but they also have problems with NIMBY and planning permission. The only way the government could have protected the people is if they didn't sell off quite as many council houses or if the council houses were only allowed to be sold to owner occupiers earning around or below the median wage of the area (this is the case in Singapore, where government housing can only be sold to citizens and only to be lived in; there are also income thresholds and it is why there is still 89% home ownership even if the prices of private condos and houses have exploded).

With or without the 08 crash, the prices would still have bounced back esp with the low interest rates. Now that the interest rates are resetting, I am predicting a house price crash but the properties would be hoovered up by cash buyers and richer landlords. Maybe a lucky minority would be able to purchase their first property or their next property in the next few years but the prices would rise faster than wages after the downturn is over. It is a supply problem long term. Without economic growth and increasing wages, we can't increase the home ownership rate. Which is a problem if there is no social housing either.