'Middle class earners' - struggling to cope financially and can no longer afford comfortable living standards despite having household incomes of between £60,000 and £120,000- Guardian

[fluffykittens208]

https://www.theguardian.com/business/2024/mar/04/middle-class-workers-mortgages-bills-tax

Excerpts:

'Scott was just one of scores of middle-class earners who shared with the Guardian how they are struggling to cope financially and can no longer afford comfortable living standards despite having household incomes of between £60,000 and £120,000.
A report last month from the abrdn Financial Fairness Trust highlighted how Britain’s insecure jobs market and high housing costs are leading to the growth of a precarious middle class. These households are struggling to maintain a decent living standard on joint incomes as high as £60,000 a year. That compares with the median gross annual earnings for full-time employees of £34,963 last April.'

“It does seem that the only way to be on a middle income and doing OK at the moment is to be a Dink and living in the north.”

'Although respondents with children reported more precarious finances than those without, millennial childless couples say they barely have any disposable income either.'

Personally we am coping ok with a household income of £120k and still eat out/have a lot of city breaks, but I wonder if that is only because of our specific circumstances

1. small 2 bed flat in zone 3 London so we don't have a car and where it is possible for DH to cycle to work. Would probably always stay in a flat even if income doubles so it makes more sense to stay in zone 3 if living in a flat.
2. were able to live at DH's mum for 3 years while working in London and bought in 2019. We were able to overpay a mortgage on 2% interest during the pandemic and plough our pandemic savings into it which means the new mortgage rate isn't as painful.
3. fertility problems so we are still DINKY and unlikely to have more than 1 child (am already 32 this year).

As a disclaimer i don't think the chancellor should cut taxes despite us all feeling the cost of living crisis as 40% of tax revenue comes from NI and income taxes so if they cut taxes, they would have to cut services and I have no desire to pay for healthcare privately in my old age.

But it feels very strange to read about people struggling in the news on our household income, probably means that the income threshold to be 'comfortable' (without very specific circumstances that lower your cost of livin) is much higher! Would hazard around £150k to £250k now. Basically we are going to be a hugely unequal society where only the top 5% can expect all the middle class fixtures and the rest of us have to pick and choose or live a life of penury and no luxuries i.e. car or property in expensive location; 2 children and no savings or 1 child and savings. Far luckier than those in the bottom 50% obviously but i am not sure how you can say you are middle class when the only reason you can afford to eat out and have nice holidays is cos you purposefully cut back on things people used to expect if you were doing semi well i.e. 2 kids in a suburban semi and a car on the driveway.

@fluffykittens208 do you not get free healthcare? In the UK we have the NHS. I'm not sure why you'd need to "economise to get private healthcare".

Due to the increased cost of living you seem to be saying that you can't afford the luxuries you'd like, but tell another poster that they should retrain to earn £60k if they want it - why doesn't that also apply to you? If you want those luxuries, why can't you retrain to earn more so you can afford them?

Or is it only the preserve of those on less than that to be told to change something so they can have the things they want (need at the lower end of the scale) And unless you're on 60k then you've just not tried hard enough?

I work in a full time job, shouldn't that afford me a standard of living above just surviving?

The simple fact is that it doesn't, and I have to work with that, do I think that £25k a year before tax should be enough to live a modest life? Yes, do I think that £60k a year means you should have luxuries if you want them? Also yes.

But the facts are that due to the increasing cost of living both of those things are vanishingly rare. Only if you're the £25ker then you should have tried harder and if you're the £60ker, well it's unthinkable that you should go without anything, even a luxury.

I think BoE will cut rates 25bps at their June meeting and I think we'll see one, maybe two more cuts in a similar vein by end 24 as long as economic indciators continue the current, slightly encouraging trend. But I agree, no way are we going back to zero rates any time soon, I think beyond this year we might settle at say 4.75% with the potential for slight hikes / cuts for rest of decade.

And there we have it @leafglow - it has to be our fault doesn't it, thats very important. If you are a low earner, you are somehow not as hard working, not as deserving, you have to be somehow "less", or "other".

They still are where I live. Oblivious to the fact the recent remortgage for the kitchen extension could be a fatal blow if one of them is made redundant.

@fluffykittens208 and yes I am working towards earning more. I do pay tax and always have thank you. And in the past (when I wasn't a lone parent, which was a circumstance out of my control) I earned more and paid more tax. Presently I am doing my best to earn more. Thanks for your judgement though!

A lot of people I know are choosing to be DINK.

I have always worked with people who seem to have less money than me, but earn more. Some people spend money like water. Their choice, but it is a choice.

Exactly. Not to mention the extreme cost to physical and mental health of working even more hours to try to earn more. Or the obvious fact that you have to be in quite a luxury position to be able to pick and choose earnings in the first place.

And the posts about it depends on what kind of house you buy and where make me shake my head.
Because of course it does. Money buys you choices. You may choose to take a larger mortgage on a nicer house in a nice area. But complaining because that does not leave you much over is mind blowing. You have made the choice about how to spend your money.
People on little money often have no choice and have to take whatever housing they can get.

i live in the uk. the nhs being free at the point of service depends on taxpayers revenues.

It all has to be paid for, there is no free lunch. Look at poorer countries, particularly those with wealth inequality, is there free healthcare? If nhs becomes difficult to access, we will pay for private healthcare.

My company has paid for my GP appointments on numerous occasions as i couldn't get a NHS one. Ditto with DH who went to private specialists and also got an operation done privately (company also paid).

@winterplumage @GoingDownLikeBHS yes my apparent low income is not good enough for society.

Let's discount the actual work I do as not valuable enough either.

Yes exactly that @Ghentsummer . It's insane how prices have shot up in London, and especially over the last decade and in south London. As @LewishamMumNow thankfully points out herself, having a £180,000 inheritance is incredibly privileged. It's certainly not something most people have access to. Very few people have access to Mum's & Dad's bank or inheritances.

@winterplumage but it is never their fault for not earning more. Only lower earners.

@fluffykittens208 and without people on low income jobs how would society function? How would it pay the cleaners, the supermarket workers, the carers and so on?

So their contribution is not valuable enough and they do not deserve free healthcare because they don't pay enough tax?

get off it. Snobbery and ignorance.

And yet, everyone who sells a house still expects a profit.

This thread is in the same vein during the last election, every woman and her dog on MN was fiercely pro Labour and would happily pay more taxes until Corbyn decided 80k would be the targeted tax bracket.

There is a mixture of problems that have contributed to the world wide issue (we are not unique in what we are going through), some of those do come down to extravagances just the same as some come down to GDP must keep going up, it isn't an either/or situation.

That would be very tricky if the U.S doesn`t cut, or the BOJ raises.

I didnt go to university and therefore dont have student loans. I'm always a bit surprised when i hear just how big the repayments are for higher earners. Do they last long, or are they paid back quite quickly?

Housing costs are also challenging in some areas.

Expectations vs reality.

£120k sounds like a lot. People expect to live a luxury. So feel hard done by when they cant have all the things they want.

Suppose my family have a combined income of £150k we live in a £500k unmortgaged 4 bed semi in a small town, because we bought cheap 20 years ago, with a good mortgage rate and overpaid. We have a small run around and old furniture gathered over the last 20 years of marriage. We have a large disposable income so can enjoy a nice lifestyle holidays, meals out, theatre, and a savings pot.

If we put all our savings and a good percentage of that large disposable income into a mortgage on a £1M house we would likely want the lifestyle to go with it, a decent looking car on the drive, new furniture to match the house. Suddenly we have no savings, lots of loans and no spare cash to spend on holidays, meals out, theatre, which is unfair, because look at the house we stretched to afford. Its a rich persons house, we should be rich.

yeah but your original comment was still wrong IMO you made a lot of sweeping judgements about what people in that income do or don't do, and the article seems to be mostly pointing out that things people in that income bracket used to be able to afford are no longer comfortable for them. Nobody said they're struggling, or in debt necessarily- although if someone had a big mortgage jump it would be easy to get there regardless of income.

f others believe 'comfortable standard of living' includes such monied privileges as several foreign holidays a year, wraparound paid childcare, a cleaner, two cars, designer gear and homeware, paying for your kids' uni tuition, cheap credit card debt, then...yeah, that's not the Government's fault, it's those individuals who just need to recalibrate their ideas a little bit.

so the government are not responsible at all for the huge hike in costs of most things? we should all just recalibrate and expect less for our money? I think that is a ludicrous suggestion

Yes, it be prepared for that to get even worse in the next ten years! You are aiming your derision at the wrong people. How do you think things are going to pan out for low income families, if higher income earners (not the asset wealthy) are going to make constant cut backs as recommended by some posters on here. You have to wonder why such posters are whipping up this resentment!

@Ahugga - honestly on the job and education it would be better. I would be paid far more.

However I was lucky regarding housing: I chose to live in a place which was not fashionable in London which became so. Most of my peers paid a lot more to be in a more fashionable area. The consequences were I made a lot of money. I think those times are over in London.

So basically I would be able to gain a high salary in London but the housing would be an issue for me. Assuming I was married as well, then I would be fine however. Divorce forced me to make a long term plan which frankly I wouldn't have done unless I had to.

@Pushtart I didn't say the quote you quoted.

"And yet, everyone who sells a house still expects a profit."

That ship has sailed, unless you bought some time ago.

Let’s say I had another child at nursery, double that outgoing and we may feel the pinch.

If you can double £600 nursery fees and “may” feel the pinch, you’re doing very well - for many people an additional £600 coming out of their account would be a catastrophe, far beyond feeling the pinch.

I think there’s a degree of what people feel entitled to on a particular salary - be that house size, car, holidays, savings for kids uni fees/house deposit. When they can’t do that for whatever reason £120k feels tight, despite bringing in thousands per month. It isn’t remotely a low income, but people feel impoverished because it doesn’t buy them the things they thought it would.