'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.

Ok.

So your income is £1,500 a month on £20k. With £1,100 of that on housing and bills.

You have £400 a month for everything else.

Say the poster you are replying to has £3,500 a month on £60k. They spend:

• £1,500 on housing
• £1,200 on part-time nursery
• £250 on a student loan

This leaves… £550 for everything else. Council tax. Bills. Travel. Clothes.

Now you see - while on the surface you think they have 3x the income you do… they are actually take a little more than twice as much - and much of that is taken up through the cost of childcare.

And there's the issue outlined in the article...!

I definitely had it good then as my secondary comprehensive was only marginally worse than Grange Hill, you may be too young to remember!

Or “living in the real world “

No maintenance. Their dad has them half the time so no maintenance to be owed to me.
No I don't get housing paid for as I own my house which is tiny to make it affordable. We don't fit in it comfortable at all. Serious lack of space.

No commuting costs and childcare costs only in school holidays for a few days a holiday, but also have additional coats associated with my disability that can't be avoided that abled families don't have, or have the option to drop. I have to have a cleaner and a gardner for example because I am not well enough to maintain the house. Have to get taxis here there and everywhere. Food costs are often increased due to how often I have to buy ready made food for the kids to eat adequately because I'm too ill to cook etc.

I don't know why people in this thread keep asking me what other money I get when I've said lots of times I don't get any other money. Yes people on 100k incomes may often find themselves with similar disposable cash levels but they also are able to pay high mortgage payments on houses they actually fit in, take their kids on a family holiday, have a car, save money, have a pension etc.

That's often the difference. Being skint or not isn't just about how much disposable income you have. It's about what you can save or not, what assets you are buying yourself long term etc. It's pretty tone death for someone on 100k to be telling someone on 20k that they are similar struggling and similarly skint. It's just not true when you look at the bigger picture and not just whether we can afford to grab a coffee when we go to the post office or whatever.

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".

@bombastix Is that reality though? I thought younger people had less disposable income today than their parents did at the same age?

You are aware that they don't pay the full rent? You have to pay the rest out of the rest of your UC or wages.

@Goldenbear I remember Grange Hill

I think you have taken my post with a lack of perspective and rigidity. Noone is saying chase happiness through spending but being on so called high income on 60 k in London and living in a dingy flat and travel long distance to work and back, and not able to pursue hobbies, join a gym or not go visit families or have a decent vacation a year is not great.
You can be poor and happy in a warmer country with a strong sense of community but you can't achieve that in London. There are a lot of first generation migrants living in the UK and they like to visit their countries of origin- that is a cost, living as a foreigner, it is hard to have a social life in a smaller town or village, so you want to do a couple of short holidays with your own family as a way to keep some balance or fun in life, you have small kids and they want to pursue a hobby you need to pay for. Not everyone is living your life.

People live according to their means. If you have more coming in, you're likely to have bigger mortgages and household bills.

I don't care if a family are earning 20k or 120k - if they're struggling and having to make sacrifices then I have sympathy.

Well my DH and I don't live there but we do live in the South East, we have a preference and need to stay near work and family but yeah sure massively unreasonable!

If? That has already happened, except London bubble money didn"t buy into housing schemes and New-Build ghettos in the North, they have stayed more or less flat, it doesn"t matter now though because interest rates are going to burst the property bubble, anyone hoping to buy should bide their time and start off with a lot less debt.

I looked up the listing for the one example from last year (whippendell road), it was an auction. 2021 is too long ago to be relevant. It's OK to be wrong.

It’s actually depressing how many people want the country to go backwards & think that life should consist of working & not much else but being grateful because people are starving in Sudan.

This completely depends on your situation though. If you're in social housing more often than not it's paid in full or £50 or so leftover. Privately rented depends on housing allowance/ if you have a disabled person in the house.
Either way, I'm not here to bash UC. I'm not even a middle earner! I'm just trying to show that actually I can see where the struggle may happen and if people on 120k can't live slightly frivolously than we and our high streets are doomed.

i added disclaimers that my financial comfort is not just due to our income, its due to the help I got in my 20s from my DH's family (3 years rent free living) and buying pre pandemic/infertility also helped me overpay our mortgage during my childless years. it has meant mortgage is now £1256 even on new mortgage rate.

That is something not everyone on £120k or even £150k has. I would wager that the people featured in that article probably had far less help than I did other than that woman who got a loan from her parents to heat her home.

I suppose my point is that "lifestyle" is a new idea. My parents did not go to the gym. They were healthy and fit people. People now seem to spend in new ways. You do have to account for that. Btw I don't think millennials have it good! I am just outside that category. Housing to me is where they are shafted the most.

😀they should bring it back I wonder what the family set ups and homes would look like now!

I love sitcoms and was watching My Family the other day, it is so funny that they are in this huge house in Ealing and he is a Dentist and she works as a London tour guide, this was a reflection of middle class London home in the early 00s!

They'd be in a two bedroom flat now in the same part of London.

If people spend on the gym rather than fine dining is there really much in it?

Just different preferences surely.

I usually do free exercise but did join a posh gym next to work for lunch hour classes, it was fantastic.

To add Ds Gen Z is a regular gym goer, does walking and climbing. Only one is free. He cooks a lot

Being healthy is a good life choice gym or no gym imo

Grange Hill is a real area though, is that where it was filmed?

oooh outnumbered! Wasn't it in chiswick or something. A teacher and a PA in a 4 bed terraced house!

They would be in a 3 bed ex council flat today and probably that may even need some small gift from family to jack up the deposit.

Of course! It's a choice. But if you are struggling then my fine dining is paired back or the gym membership or whatever. That is slack money!

Of course someone on 60 k can be struggling - it all depends on the outgoings you have committed to .
We used to have a joint income of 73k before tax - two dc at uni at the same time , 2 cars, a mortgage.
A few years later we have - joint income of well below 30k , one car, no mortgage, both dc in full time work .

Our income then feels similar to it does now as we have less outgoings .

therefore people with high outgoings with a hight salary to match can be feeling the pinch as they have little left over due to commitments. I recall people saying to us we had a decent income but two at uni at the same time plus a hefy mortgage had a big impact on any ‘ play money’ - no holidays abroad for sure .

Govt should consider a pause in student loan repayments or raising the threshold.
Childcare costs - could govt do
more?

I'm fairly certain that I could - I became a teacher when the wages in Scotland were low and I had to pay a high mortgage rate. I've always been careful.

I'm in the house I started paying for in '86. Not the worst area, but not a 'good' area either. I've not made all the improvements to the house that I'd like, and maybe I never will.

At one point, we were helping out younger relatives and then realised that we were just helping finance them to live beyond their means whilst doing without ourselves.

I've had to tighten my belt - family health problems meant that I had to quit my job at 58. I'm fortunate, in that I got a reduced teaching pension - 18k at first. I inherited 4k of my husband's when he died.

I'm now back to teaching 2 dys a week, but I don't know how much longer I can manage that. (Apart from the current discipline problems, I'm finding that 64 yr old knees don't cope with standing all day.)

I had a spell when I was better off financially - I became a HoD when I was 40 and my wage jumped to 35k. I was earning above 40k when I retired. (I was the main breadwinner. I paid all the utilities and council tax and I paid off the mortgage myself.)

When I was a HoD, my work clothes came from the sales in the nicer shops in Livingston and Edinburgh George St. Now they're by George (Asda's).

What I've noticed is that my younger colleagues seem to have higher lifestyle expectations. I bought a 2 bed end-terraced house. They expect a 5 bed detached house and turn one bedroom into a 'games room', etc.

I'm not saying that they're wrong - just that they expect more.

I'm surprised at some of the comments I've seen on here about holidays. We did have holidays abroad, but that would have been one a year at most. Mind you, I remember my dad - a retired coalminer - expressing surprise at the amount of holidays that we had!

I can't complain - I'm better off than many.