'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.

This in buckets. Add UC to that first one too if they're in rented accommodation and they end up with more disposable income than the 60k one.

Nursery for my child is going to be £2,400 when I finish my maternity leave in a few months. It’s insanely expensive, has gone up 25% in the last 4 years, argh.

I mean maybe you don't eat caviar but at 84k you're certainly earning more than enough to not be whinging about being broke. My income is literally less than 20k that's less than a quarter what you earn 🤔 and I'm not out here moaning about it.

What I'm saying probably sounds harsh but I do understand if you've gotten used to a certain lifestyle it may be hard having to adjust to living more like us peasants

@BusyMummy001 I’m pretty tight so would have loved to buy in the 90s/00s but was still in school.

also where else in the UK have that kind of job market London offers??

Makes you wonder why people aren’t clamouring for £30k jobs, doesn’t it?

So, you don’t need to pay for childcare or commuting costs. Do you also get housing paid for? Any maintenance from the children’s father?

We bought in 2015, so I concede it was a while ago now. The house was 500k so not ridiculously low and we were earning nowhere near 120k then. I can't remember the interest rate but it wasn't really low like it dropped to a few years after.
We had no help with the deposit.
If we hadn't added a big extension, it would cost about 600k maybe to buy today. Given we'd be able to take out a lot more mortgage than we could then, it would be more affordable for us to buy it now but of course it would be less affordable for those currently earning what we were when we bought.

but the PP is on a top 3% income. Nationally, that is true, not in London. but its a bit weird if you need to be on a top 3% income to order five guys and live in a decent place in London

She would almost certainly be quite able to buy a flat of her choice (assuming flat is not one million pounds) if she had a partner earning a similar amount. Its a bit weird if zone 1-3 London is only accessible to those who fit the following circumstances:

1. £250k or upwards household income (2 higher earners)
2. those who are children of supportive london parents/in-laws and also have ok paying jobs (people like me and dh)- and benefit from childcare help, rent free living etc
3. people in council housing or who receive council benefit
4. Lucky recipients of bank of mum and dad
5. People who bought at the right time aka 90s and early noughties aka older people
6. Multigenerational households
7. international investors

This was certainly not the case in the past.

This will eventually have a ripple effect on zone 4-5 london and eventually in the regions. It has already happened in the well heeled towns in the home counties.

Wages haven't kept up with inflation. Just look at the public sector strikes some people are over 10k (accounting for inflation) worse off than when pay deals were agreed back in 2004.

You set your self goals and how they will benefit you I.e

When I get to 30k I can have X
When I get to 40k I can have Y

When because of over tax and poor management of public finances means you take the job that paid 40k when you were setting your goals but now pays only 41k 5 years later it a bitter pill to swallow.

People plan kids, houses, finance etc long term especially at higher household incomes.

So they could have bought a house thinking well even if rates rise when I remortgage my wage will be X. Now they are faced with rates rising and salaries not.

It not uncommon for higher income houses to have similar disposable income they just have bigger house (mortgage, council tax, bills etc) and nicer luxury like cars, clothes etc. They shouldn't be forced to give them up because the government has over spent

Yes sorry you’re right. I hadn’t factored in tax.

My outgoings are over £1100 incl mortgage, bills, commute.
Leaving under £400/month for food/clothes/teen stuff/broadband/phone. Christmas / birthdays are v low key.

im so used to not spending money on luxuries that I don’t consider myself poor. I have food and a home. Pre divorce we would have 1 holiday a year and weekends away. Eat out. That was on joint income of £50k around 6 years ago. Shows how much the landscape has changed. Colleagues on dual household incomes of £70 are still doing holidays/ eating out but probably feeling the pinch a bit.

But why should someone who is from London have to move to the other end of the country?

And get lambasted for pushing house prices up in the new area! Londoners locals don’t exist apparently & can’t be priced out 😆

I am pretty sure that is not true.

So you don't want a sustainable, healthy economy then? When middle-class families can no longer afford to buy the goods and services that businesses are selling, it drags down the entire economy from top to bottom.

What would you rather the boom and bust economy making the very wealthy even richer!

The stretching out of the Mincemeat with lentils dinner appears to me symbolic of this middle class decline as on MN it used to be the Chicken that could be used for several meals- what a luxury, what an extravagance is what many on this thread will be thinking, no wonder many of us are 'struggling'.

I am in zone 4 kittens, the house price inflation exists here as well.
10 years ago on my street there were houses (admittedly looking like doer-uppers) for ~£300K, now everything is £700K+. 15 years ago there was a sale for £180K. It is legitimately crazy. It is still exactly the same housing stock as 10 and 15 years ago, it did not get better or posher.

Lol. Unless you have kids UC does jack all...

It’s lovely you are so interested in Watford.
Its a nice place to live.

Heres a few from latest published sold prices.

Watford prices have stagnated or gone down according to agents in the last half of 2023.

Yes, it's like London has only ever been a place where the streets are paved with gold and no one actually grew up there did they?🤔

It is for a lot of people actually. I'm not shitting on UC, people have been forced to use it and I'm glad it's there. However, people don't want to accept the reality that our economy is falsely kept up by the tax payer and it's falling apart.
You do know the private rental market would basically collapse if UC stopped housing costs overnight?

Yes I don't want to get "cease the avocado toast" but there is something to this. People do have high expectations regarding takeaways, television, gym memberships etc. But really these are "lifestyle". People are persuaded that they need them. I don't want to get too hair shirted but I am that person with Freeview. I am the person who doesn't have a gym membership but goes swimming in the local lake, and I definitely cook. These are admittedly the habits of a long-standing middle class fool derived from my own upbringing, but the idea of consuming things as leisure is quite a new idea. It's often facilitated by debt. I love eating out and my ultimate poison is fine dining and wine, but this is a twice a month thing. My parents were very middle class and all I do is replicate what they taught me. They did not spend to "show". They spent money when it was actually needed or would help them achieve something. Am I the only one who remembers this from their own upbringing? We were comfortable but not flashy. Flashy was a kind of social death.

Couple more as I had the screen shots anyway.

Yes, it's like London has only ever been a place where the streets are paved with gold and no one actually grew up there did they

Yep I had to navigate junkies, pimps, etc on my golden paved journey to school #soprivileged!

Because they can`t afford to live there?

So if Southerners move to the Midlands and North and drive up prices, where will those people go?

Not to mention the hate you have to put up with.