'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.

These kinds of statements are meaningless. One person's idea of what is 'normal' or 'essential' in life can vary so wildly from another's, eg holidays, private school, having the latest iPhone etc. Also many live well above their means and believe they are entitled to do so, and others feel they should spend everything they have as 'you only live once' or words to that effect. So many idiots.

That's just deflection, the article is bang on and actually we should all be worried as what do you think the impact om tne economy will be if only the select wealthy few have money to spend? By 2035 on the current trajectory wealth distribution, 200 families in the UK will be wealthier than the whole UK GDP!

So that 20k is more like a 28k salary, which isn't far off the median for a full time worker. Although obviously not a choice you have made.

@fluffykittens208 so you are the ‘personally I am on 120k’ my mistake as it was written as excerpts it looked to me like it was all about Scott. I won’t click on a Guardian link just as I won’t click on a DM one.

Struggling to live a comfortable life on 60-120 k? What the hell do these people consider an uncomfortable life? Only three world cruises a year instead of 4? 😂

A fool and his money are soon parted

you control money, don’t let money control you

@Ghentsummer
I bought my house in 2015 for 450k. It was very run down and a real project and I did have an inheritance of 180k. It's probably worth a little under 600k now. I'm probably going to be moving further out in next couple of years - you can buy 3/4 bedroom houses closeish to London for well under £400k, and that's likely to be what I'm looking for as I can't really afford my mortgage (and for other reasons). Totally appreciate I'm privileged in many ways, but was generally agreeing with OP about things. Honestly, 120k is loadsofmoney even in London.

this is what i was thinking. I may be fine despite being in that same income bracket, but i acknowledge i was lucky and not everyone can enjoy the same luck!

Also it is literally impossible for everyone to have the same circumstances as me.

@Universalsnail so say your rent was actually (for ease) £1,300 per month and then childcare £1k a month more than what you currently pay.

So you need NET another £24k per year to have the same disposable income you have now so that would mean you would need a gross income of roughly £55k then if you had expensive travel to work and childcare drop off you would need even more than that.

This is why SOME people on decent incomes are very much struggling.

Yes because declaring everyone, 'idiots' is really an intelligent insight to the what has happened to wealth distribution over the last 40+ years.

This is so interesting. Where do you see the power shifting to? People who inherit wealth? People with strong family/community support?

But if you earn an annual salary of £60k, you don’t take home £60k, you take home £44600.

i’ve seen people post on here about the Universal Credit Payments and some are getting over £2K per month plus their housing paid.

So it's not comparable really is it. People really underestimate the cost of being the squeezed middle. I'm not even in that bracket but I do feel sorry for them. I'm not saying you have it easy by any stretch but I can easily see how someone in that article would struggle to be honest. The cost of housing is insane. Absolutely insane. Everyone can't run away to the north, it's already driving up prices there. The cost of a commute from the home counties is insane too.
I don't think those people are saying they're roughing it, I do think the guardian is making them all look like numpties but I think the point is to show that 120k doesn't get you the life of luxury people imagine, or the life it would've given you just 5 or 10 years ago.

I think people say you live within your means but then I think for people who live in London or in Dublin (I’m in Ireland), I do kind of feel sorry for people paying so much in rent/mortgage. I know it’s their choice but my god to be weighed down with that. And for people saying people live on far less they’re the ones struggling- we were poor poor at one time due to childcare, housing, kids constantly being sick, our in laws used to call us rich as they were all on welfare. They hadn’t to pay for their house, they had fuel allowance, medical cards which meant they didn’t have to pay for doctors visits or prescriptions or dental fees if there was a basic problem. We had to forgo those things at times and they’d say ‘that’s just bad money management’ whereas we were thinking aren’t ye lucky you can go to a doctor when you need it! We were all being unreasonable (and bitter) really! So I think everyone thinks everyone else has it easier but we all have the same shit to deal with

Struggling though? Usually this means "struggling" so have only booked 1 holiday this year whilst still putting hundreds a month in savings and pensions and so on. The luxuries that some people have forgotten are actually a luxury. We are a £100k+ household with kids, but I don't forget how hard I previously had things, therefore I'm very aware of the luxuries we have now in comparison. The holidays, the short breaks, the days out, the restaurants, the shopping days, the multiple cars we run. I could go on. But I know some people who have these things who claim they are "skint", but like come on you've just paid £8k for your latest holiday that ain't skint!

I noticed that article too and wondered what MN would make of it.

Housing costs, childcare and public transport costs are the big costs in the South East. Many jobs just aren’t replicated elsewhere and once you are working in London you are locked into those peak train fares - it’s not like you have the option to drive into central London instead! Even working from home a couple of days per week doesn’t necessarily save that much money as three days of travel is often the same as a weekly ticket. I think a new part-time ticket is coming or may now be available, which is long overdue! Even worse is that you probably still need to run a car for weekend and family use.

But, from the perspective of my late forties, I would say that people have certainly found new ways to spend money in the last couple of decades. Looking at women, because I am less clued-in to what men do, all of these are considered normal for many women and they were barely a thing when I was a young adult:

Eyebrow treatments
Fake eyelashes
Salon waxing
False nails
Higher end hair treatments such as Olaplex or Balayage, beyond a simple cut/colour
Holidays for each adult (‘Girls’ Trips etc) as well as a couple or family holiday.
Hen dos involving a weekend away
Personal training
Subscriptions
Gym memberships
Tooth whitening
Having a new car on finance
Branded handbags

So perhaps expectations are higher than they used to be?

I won’t include phones as they are a communication tool and so many official organisations expect you to have one.

we are on £120k and we go without a car to afford our regular city breaks which are usually at a hotel ibis and we often fly ryanair/easyjet depending on the deals. Certainly couldn't afford a cruise! though my parents live in asia and we do budget to see them.

I am not crying poverty and my life is perfectly comfortable but it feels weird to read that its considered a squeezed income these days. probably means if i don't increase my income,in a few years, i might be crying my eyes out to a guardian journalist....

Our household income is in this category and if you asked me 4 years ago what I’d feel like at this level my answer would probably be incredibly rich! The reality is quite different.

we moved just as rates went through the roof so our mortgage is now £500 more a month than our highest comfort level.

We’re dinks not through choice and if I do manage to keep this pregnancy nursery fees will take a huge chunk of our ‘free’ money at the moment.

I know that we’re in a very privileged position compared to many though so would never complain but money is a constant source of worry for me as the higher earner.

You would not have much more money at all on 120k. You would be paying marginal tax rates of 60% + NI and would also have lost your 30 hours funded nursery and access to the tax free childcare savings.

Once you hit 100k if you have nursery age children you are faced with a 100% marginal tax rate or worse if you have more than 1 child of nursery age.

Where are you getting the 28k salary from? Do you mean after tax?

My point isn't that I can't survive on the benefits I get anyways it's more that, 80, 100, 120k is considerably more and I would be able to have a significantly better quality of life with that amount of money. Being able to decide to spend several grand a month on a mortgage for a house that actually fits my children in comfortably is honestly a dream to me. I have 1 boy and 2 girls having to share a room at an age they are too old to be in a mixed sex room in a tiny terrace.

Being able to decide to live in an expensive area, decide to buy a nice house with high mortgage repayments, decide to stay in work even though the childcare is costing a fortune are not signs of being skint. Someone is not skint if they earn close to 100k. They are choosing to spend their money on things that give them little disposable cash, but the fact they can choose to buy those things in the first place is a sign they are not skint. Many people on low incomes couldn't afford those things even if they wanted to.

@Charlie2121 Totally take your point (although I'd still be better off on 120k than I am now), but best still would be 99k!

My mum is better off on UC with a under 16 child than my sister who has 3 kids under 8 and dual income.
I have nothing against UC but people underestimate how much that top up equates in terms of a disposable income. Some people are really done dirty by the benefits system but others aren't and it's ok to admit that.

@Foxesandsquirrels This is spot on.

People on £120k aren't asking for a go fund me, they're just trying to work out how they are possibly being so squeezed on what is in paper a high salary.

Housing
Childcare
Travel

These are out of control in SE London now. Unless you bought a house a while ago and locked your interest rate, can use family for childminding and can wfh then it can be really tight.

The figures I quoted upthread are from my DSis.

We live in the same area with a household income of just under £100k but are managing much better because we don't pay childcare, have a smaller mortgage (despite a larger house) and don't commute.

[laughs in being a single person and having to pay for everything on one salary]

It sounds like all these people have a lot of debt, probably large mortgage, in some cases leased cars and big credit card/loan balances. The interest rate rises will be crushing them.