'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.

According to the right wing propaganda machine. Free 4 bed detached and the big one of all, a flat screen TV thrown in as a sweetener. As well as £30Kpa pocket money and a free pass to the food bank.

Don't take my comments personally lol they aren't directed at you more anymore that reads and disagrees lol

I've never met a single person who has been to private school (as far as I am aware) I know a lot of middle class people none of them could afford it, it's called "middle" class for a reason.
On Mumsnet it seems about half of the kids go to private school but that doesn't represent real life
Just saying

Do you feel ok or like you are struggling. I am same as you but without the child and my mortgage would be £1256. Though could easily be 2k if we moved to a bigger flat.

Unfortunately, we are both in middle class job which we are not so easily transferable to elsewhere. We would both have to leave our sectors in order to do that. I was actually thinking about whether that would still make sense. We could probably retrain as teachers - but that costs money - and a year each without a proper income, which we cant afford.

It’s all relative though, isn’t it? Those that earn more, spend more. They also want to upgrade cars, homes, holidays etc.

I am just below the bracket they are talking about, not in London - mortgage and household bills I am solely responsible for. I dont have a huge house but needed one with parking as shift work made coming home (or even getting out to go to work) miserable in my terraced house. I still have a fairly low LTV and on paper it is very affordable. If I have a bill for house or car repairs it is a catastrophe ( I have some cc debt because of this) and I have not had a holiday for years. I am overdrawn every month at the end. I have not made foolish decisions. Apart from living alone. I earn above average and am shocked at how hard I am finding it to manage.

A sale by modern auction which is what that property was listed as
isn’t like the auctions we see on tv. Where you need cash.

The estate agents will do block viewings and give a deadline for offers. Then the successful buyer goes through the normal buying process of surveys and getting a mortgage etc. No need for cash or anything.

Quite a lot of sellers are using this method for a quick sale.

I was joking!

"We can’t afford holidays. We can’t afford to put money away for the kids. We can’t afford new things, gadgets, hobbies. What’s it all for?”

I understand this. It's not a particularly sympathy evoking position when compared to a single mum working as a carer for example. A lot of professional jobs require you to give body and soul for a sustained period of time. Stress is a killer and you volunteer for it. The promise is that you will get a good life out of it. That is not now the case.

This thread reminds me a bit of Billericay Dickie. 😛

We go on 6 per year so pretty regularly. We also have family overseas so need to visit them. My family is in asia and we stay with parents. But we pay for hotel room when visiting dh's grandpa as the alternative is sleeping in the cold unheated basement (dh's sisters all visit at the same time and his grandpa has a 3 bed house)

I try to overpay my mortgage at least £1k per month and we have spent £10k overpaying dh's student loan. Only £4k left.

What they really mean is “we’ve bought loads of shit we can’t afford, so please give me some money”.

I had colleagues with household incomes of around £120k who would plead poverty while having a car on PCP of around £400 a month, yearly holidays abroad, cleaners, manicures, expensive highlights, a seemingly endless supply of new clothes and frequent eating out. I was on £80k as a lone parent, so a high wage, I saved up for about 9 years and bought a flat in zone 1. They used to moan I could afford to do that as they thought I was on a low income and so in receipt on benefits thats how out of touch they were with actual real life. There was who moaned she never thought she would be struggling so much for money, she had just bought a brand new range rover!!!!

@fluffykittens208 I think we are struggling, we've had to do some works on our flat and thats wiped us out. It feels quite precarious.

What our situation also illustrates is that a 'middle class' household income in London for people in their 30s i.e. those with primary aged kids who haven't bought too long ago is now closer to 200k which is actually pretty high even in the capital.

By middle class - I assume people who can afford to have savings, holidays, kids activities - not having to worry too much about day to day expenses.

We are not talking about private schools, multiple cars of ponies. Just a fairly average middle class life. 200k. So yes I would say that for a family of four on 120k in London - if you are in your 30s or every early 40s - you would not be able to afford the above.

No, I hadn't seen that!

However, I did have a young colleague who went for an interview for a mat cover job in Orkney some years back.

A central belt school offered her a temp contract. When they heard that Orkney had offered her the job, they changed the offer to a permanent contract.

In the meantime, there was bad weather. Orkney paid for her hotel, wined and dined her....Showed her the dirt cheap cottage she could rent.

When the mat cover ran out, Orkney gave her a permanent post. Last I heard, she was married to the school janitor (also the owner of the local pub) and is now a mum. Blissfully happy.

I put in that last line so I didn’t get a MN backlash.
You know how it can be 🤣🤣🤣

I don't claim to know the answer but isn't it something we should always prepare for?

given we go through cycles of boom and bust, even in 2004, I would have considered a return to 1984 levels.

I admit freely - I have never understood how economies can keep assuming increased growth. I know economists do this but I thought most people, especially the groups described in the article, would realise that interest rates go up and down, your own personal situation can change a lot, and a period where you could easily eat out a lot and go away a lot isn't a golden time that will be guaranteed to stay forever.

If anyone remembers Rene Carayol (sp?) he often said that people would find themselves with designer clothes, having enjoyed lots of meals out, and realise that money may have been mis-spent, that their earnings might decrease. I enjoyed his show but squeaked in horror at what people spent on luxuries.

I hold my hand up and admit I was the dull one budgeting in my 20s and some friends (long gone) actually got irritated with me that I kept saying no to their pricier outing suggestions (of course they could go without me, I'd never pressure them to a cheaper thing just to take me ).

First time my job got made redundant, I was 24. Others here might remember the days of sitting in temp agency reception at 8.30, waiting for jobs to come in.

I do wonder, as pp have said, what some of these people think about those who are really struggling.

Pays to be pessimistic, literally.

Crikey reading this thread makes me really understand how out of touch posters are in the real world! Can understand why my daughter avoids MN . What I find really depressing is that many posters are probably in their 30/40s and are so ignorant about how hard people work ,who can only dream of owning a property! Spending £2000 + on a mortgage and moaning about it !! Many people of the same age group are renting ,paying the same amount of money !
Really think using a MN expression …give your head a wobble is appropriate here !

I've been dealing with a 90+ year old with an income of under £10k a year and mortgage payments (yes at that age) set up by her now dead husband that exceed £1k a month. Oh yes, that doesn't add up. Oh and there's those other minor inconveniences like food, and heating etc. Sorry not much sympathy here.

What if you had one child? Would it be £150k or £180k or closer to £200k for a middle class lifestyle

I hear you. But it’s not quite as good as you imagine because:

one - tax paid is overlooked.

earn £120k a year and you pay and straight up £40k in tax and NI.

that’s a third of your income.

so someone earning at that level is supporting two or three other adults living on benefits.

so yes you’d have more income but not as much as you think, because low earners pay very little tax and often forgot how much tax high earners pay in total / as a proportion of their income (about 1/3).

two - most jobs at that level are in the south east. Where housing and other costs are high. So it doesn’t go as far as it might elsewhere. The poster above saying ‘move north’ overlooks that few people can get a job paying at the same level outside the south east.

three - if you are a mother to be able to do the high earning job you need a decent amount of high quality childcare. We went through a phase of spending £45k a year on childcare out of our net income.

its works for us because I enjoy my job not just the money it earns. And I love living in London. And having a nanny gives us the extended family experience of other trust adults loving and caring for our kids we don’t have with extended family.

and we are comfortable I’m not complaining.

But we still make choices and compromises. We live in a flat with no outside space for example. we didn’t have the third child we both would have liked, to keep the balance / trade offs around childcare costs (and future costs like university) / housing / commute length / pressure on job security manageable.

I live in County Durham and any house for 60K trust me you don't want to live there!!
In our village the average price is £350K..

@Universalsnail "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."

this.

This......a thousand times. FFS. OP, find out how some others live.

I thought you went to private school and it scarred you for life?

My mortgage is low for London. Its £1020 due to rise to £1256. I overpay £1k on top.