'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.

Agreed. Also, if you expect a little more than a frugal life then you are chasing happiness through money.
I mean wanting to go to gym should be considered a good thing but on this thread it is a luxury. We should have no expectation beyond groceries from Aldi, a basic housing in suburbs, petrol for car and heating. What about wanting to save for retirement? Is that reasonable?
Threads like this are really depressing.

Oh yes, Outnumbered, the Chiswick pile on the Teacher's salary!

Aren't they just!

Huge difference between £60 and &150k. And you live in a fairly mid cost area. And you don’t have childcare costs yet.

I am on what I would once consider a decent wage, as is my husband.
Reality is that my UC sister in law has more disposable income.
What I pay for and she doesn’t all adds up…council tax, school meals, school transport, prescriptions, school holiday clubs, free insulation and double glazing.

She is also eligible for insulation/new boiler grants and a raft of other things I am not entitled to.
She also gets all adult education courses I would like to do but can’t due to cost, for free.

Yes I am jealous and frustrated.

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.

My parents didn’t go to the gym either but they worked less hours so would do a lot more walking in general as they had more time. I also think older generations spent more on alcohol & cigarettes vs younger ones. Lifestyle as a concept may be new but I don’t think younger generations have more disposable income to spend in the first place!

Could a teacher buy your house now though? Skipping holidays and shipping in the sales is all very well, but doesn't help if the bank won't lend enough.

Oh come on; pensions are not a luxury spend. They are critical. Or is everyone going to say that the thought a takeaway and a telly subscription is a better use of the money?

I've discovered that some healthcare that I need is no longer available on my local NHS.

My mother had to have her varicose veins stripped many years ago. Local NHS.

The local NHS closed down that dept. I paid about 250 quid to the bloke who used to do that for our local NHS. Turns out that one leg is normal...The other is actually missing valves. I'm told I'll have inherited the condition from my mum.

I've tried to keep active, so I'm only having problems now that I'm in my 60s. If I want to have the problematic saphenous vein zapped by a laser, I'll have no choice but to pay 3k to have it done privately. In the meantime, I'm struggling into a Norah Batty stocking for my right leg.

Oh come on; pensions are not a luxury spend. They are critical.

And unfortunately many of the excellent ones closed to newer entrants.

It supposed to be a comprehensive school in North West London but I don't know where they filmed it all as it was on for a long long time.

I know teachers opting out of the TPS which is one of the few remaining good schemes but the need the spare income today to live.

If ther eis a change in income it can hit people hard. Some things like holidays it's not so hard to give up. Other things you can't just change out, like your house.

And it affects everyone when middle class people who used to have some disposable income have to cut back. They aren't spending money that otherwise would have been going to support someone.

My household is quite MC. Seven years ago I was doing childcare and making enough to cover groceries, incidental school costs, and especially,extracurricular things like music lessons. I'm earning a lot more now and i can still not afford extras like music lessons. the differernce is stark.

We are on about 67k (I only scrape about 550 a month) and really struggling. Our rent is 1600 for a bungalow. We only have flush months if my husband does loads of overtime but it's not always available

I'm a reasonably high earner, but have found my spending power has reduced by circa £20kpa salary compared to 3 years ago.

I would have expected to be able to have luxuries on my salary but have had to cut back. Fortunately, the kids still go to (way too many) clubs etc, but the ability to save and the foreign holiday each year is a distant memory.

It's not that we are skint, it's that what is ostensibly a high salary doesn't provide the expected lifestyle. People earning around the £100kpa mark should be able to live in a pretty big house in a safe area and should be able to afford decent cars and foreign holidays.

Otherwise, what is the point?

I have become a bit invested... i just did some rightmove stalking.

If i had been prescient/wealthy enough to have bought the (extremely dodgy) sharehouse i lived in in very sketchy east london when i moved to london in the 00s as a teenager - i could have sold it a few yeara ago for £1m in pure profit!

That would have been like earning 50k net (80k gross??) Per year for the past 2 decades. For doing nothing!

Which is why people say there is a massive wealth generation gap, highlighted in London

“We spend £6-7k per year on holidays and £10k+ on home improvements and manage to save about £10k a year so could cut back significantly/have a lot of headroom.”

@DaisyHaites

This is how much I spend, post tax, on one childcare place FYI.

You may be less sure the middle class have lost touch once you have a couple of kids in nursery.

This is so true, DD has piano lessons which we can afford for now but the Piano teacher has to keep pushing her rates up (for her own loving expenses) which is pushing us towards the threshold of affordability. My DS dropped guitar at the start of the 6th form as he is no longer studying music, obviously this has an impact on the Guitar teacher's income.

No it doesn’t. Take home pay on a £60k salary after student loan is taken is around £3400 a month. Our essential outgoings plus bills and food would swallow that before anything else.

I couldn’t get past the fanny of a man who was complaining because his wife can’t get a “remote flexitime” job so just doesn’t work. That’ll be why you’re “poor” mate

Yes, a teacher could. Similar houses (ex-council) in this street and the parallel street are selling for between 65k and 125k, depending on how much work they need. (125k would be "move-in" condition.)

I moved to a city in the South East in the early 00s and the rent was £300pcm for a flat share with my friend. We looked at huge period property flats so we actually had not just a room but a huge lounge and kitchen diner m, one bathroom between 2 people. We actually turned down one flat as it was too big and had a bedroom we didn't need!

True, it was very popular and ran for a while, 8 years or something? Most of the scenes were indoors and could have been filmed in TV studios anywhere.

Actually closer to mid 00s

@DaisyHaites

Childcare costs in zone 6, south London: £120 a day.
2 children full time, 51 weeks per year, after tax = £61,200.
How would this affect your lifestyle?