'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.

So many people seem to think that an income of £120k means a ridiculously high take-home pay. Factor in how much is given away in tax …. Income is halved. It’s a healthy income but it’s not like a lottery win once tax, mortgage, childcare, food and other costs are paid down South.

The take home is £75k a year, so hardly halfed, it equates to £6k a month which is a strong income by any measure.

I'm a governor at a school where 75% of the children are on free school meals which means a family income of £16k or less. That's the real cost of living crisis, where school holidays are a financial crisis because feeding your children is beyond your means. School fees & skiing holidays are a fantasy to them.

Well fucking diddums.

It must be so awful to be middle class and suffer so much deprivation on a meagre £120k salary.

My heart bleeds. Not.

But why's it out of reach, you should be venting at those who have multi millions in assets who correspondingly push the prices up as they own all the supermarkets too! How do you think not discussing it is going to help your daughter?

I think the point of the article is valid.

In an economy like the UK, those in the top 10% income should be having a decent time. If someone was top 10% income twenty years ago life was much better.

The phenomenon we have lived through - a political choice made by the government - is really affecting everyone negatively. The cost of the basics - housing, transport, food, heating and childcare - is high for many families.

Everyone's living standards have dropped - worst of all for those at the bottom of course, the amount of people in abject poverty (which The Guardian also write many articles about) is shocking.

Actually I was merely pointing out inconsistencies ie 1 thread you post about going to private school and in another thread you claim to have gone to a rough inner city school. So as an outsider that is inconsistent.
Please identify where I have made personal attacks against you? I have questioned an inconsistency, that isn't a personal attack.

Is that rent or mortgage?

@LewishamMumNow do you own or rent your house? Just curious because I am in London and as a lone parent would really struggle on that salary if I had to pay for housing costs and childcare.

Yes but how do you things are going to improve for people who are renting and on the lowest incomes in the country, if this situation is not highlighted or discussed. Do you honestly believe the declining spending power of the middle classes (who are definitely not skiing and paying for private school fees) is not going to impact low earners, do you think things will improve instead? Seriously? Everyone is jumping on the 120k end but there's a big difference between 60k and 20k!

Well lots definitely do things like switch to part time where they can or take unpaid parental leave and similar while they have young kids. 48k vs 60k with tax/NI/student loan with 2 kids you go from £2,960 salary + £170 child benefit to £3,470

So a £1k monthly gross increase gets you £340 net increase. Then assuming you still have childcare/wraparound to pay for you spend majority if not all of that paying for the extra day using it.

It’s a temporary thing and longer term you’ll be better off earning more but it’s no surprise lots of people on that sort of income might switch to part time for a few years while they have kids.

Thankyou @Justpontificating you’ve saved me having to explain
again

That was the advice given to the many unemployed in the north in the 1980s . I am still of the opinion the tories favoured the south too much . So many people had to go south as that's where all the well paying jobs went . It was wrong and we are seeing the effects of that .
It seems house prices soared in the south as that's where all the well paid jobs went .

Have not said that people shouldn’t discuss,I commented on how tone deaf people are 🤷‍♀️on MN ! My daughter who is a professional just cannot be arsed with reading about people whinging about their 100k income .Unfortunately your first response to me was very patronising about how long have I been on MN and how it is MC !!Read back if you need reminding.
Totally agree about multi millionaires and that is not going to change unfortunately!

How was I inconsistent, this was a quite from the VAT private school thread:

"Goldenbear

My artistic comment is totally taken out of context, I was commenting on my personal circumstances, DD is a talented Artist in spite of school, definitely not because of it. She would not suit the long days of private school as she is better off with pursuing music and art in her leisure time, not in a prescribed way. My DH is an Architect on big projects and when designing social housing is invested in good design for everybody, not just the very rich. We have both known an array of people and it informs your interactions, your empathy and your street smartness if im honest.

Yes, I went to private school but had to leave at 12 and was thrown in the deep end at a huge London comprehensive akin to Grange Hill (worse) and needless to say I didn't have a clue before!"

i mean I also mentioned it another recent thread about being well rounded if you go to private school which I am sure you were contributing to.

You are being disingenuous and trying to undermine my points on this thread - only you know why that is.

Are you really trying to say that you think this situation couldn't be highlighted except by talking about people on incomes over 60k?

I think that is nonsense, frankly.

If we need to talk about declining spending power, fine, let's talk about it. Obviously, middle class people who go on skiing holidays and pay for private school matter to the economy - but why no talk about them in the context of the economy, rather than as sob stories? No one needs to read about how someone on 60k is 'struggling' because they can't pay the school fees.

If someone in Eritrea is struggling to feed their family does that mean that the suffering of a family in the UK because they have to sleep four to a room in a damp house is invalid?

comparison is useless. It’s harder for ‘middle income’ people than it was. more than 50% of UK households are net beneficiaries of the state. Most people are having a tough time. The system feels broken.

Childcare costs for two preschoolers in London are now c. 80% of a £100k salary after tax. £4-4.5k.

Can you see why someone on an income of £100k might find that difficult to afford?

I find it disingenuous. Yes things can be tight when you have nursery bills but these are above average salaries and the only reason money can be tight (nursery costs aside) is because you have overstretched.

We are in that bracket and are pretty comfortable

What you are saying is all true. But the bit that's missed out is that anyone who is an UHNWI (ultra high net worth individual) is not limited in choices of places to live. Their wealth is mobile, so taxing them appropriately/according to their wealth, is between really difficult and impossible. And governments know this, and have given up trying.

We are on £120k and as i said in PP, we don't have a car, we live in a small 2 bed flat. We stay at budget hotels mostly on holiday not skiing. Dh doesn't even pay for transport he bikes everywhere. Our mortgage is £1020 so obviously not a flash property even though its in London.
Will never live in anything but a flat and can't afford a house in the home counties either.
No children yet due to fertility problems but we will definitely ask my MIL for help to cut down on childcare fees.

Our income bracket means we are the squeezed middle in the SE. And the joke is we had help buying our flat though not actual cash.

I dont think our life is too bad but i think many people's lives must be unlivable cos i have so much help and luck and i would expect to have more because of that.

Yes this is the hard part

To add countries know this, not just us. And they want them to stay

Can you outline your income and outgoings?

@NotcontentOwn with mortgage of c£1,500/month. Currently on mat leave so only paying for childcare for 2, and not 3. Don't have a car (or drive), and certainly can't afford a holiday, shop in Aldi, get most clothes from freecycle or charity shops. Will really struggle when I go back to work in 2 months with 3 nursery fees, but with the increasing support being provided (I'm lucky with my local nursery), I'll just about manage for about 18 months, when my first will be in school and my other 2 will get much more nursery provision. As soon as they are all in school, I'll be loaded!!

I disagree.

Comparison is vitally important. Obviously, comparing the situation of someone in Eritrea with someone in the UK has no value within a discussion of UK politics, because no amount of change within the UK system is going to change Eritrea. Everyone can understand that. But, if we're talking about financial difficulties under a single government, of course we need to make comparisons!

At the moment, our government is trying very hard to make us believe that poor people are lazy, shiftless, and basically deserve what they get. They are also trying very hard to make us believe that people who are - statistically - above-average earners, are in fact barely making ends meet, and should consider themselves to be 'struggling'. This all nicely deflects attention from that fact that they very wealthy are doing just fine - and many of the super-rich are in the pockets of our government.

Of course, the system feels broken; of course, many people feel things are tough. But we need to be realistic. No one who is choosing to pay for school fees is 'struggling'. Nor is it 'struggling' to have chosen a career that pays 60-120k, and to have the temporary burden of London childcare fees. People in these situations need to pull together with those who are genuinely struggling, and to acknowledge their financial privilege.

That's not to say it's all cushy if you earn 120k: I'm sure people feel a bit miserable that rich-ish ain't what it used to be. But the best way to raise us all up is to look to what the richest in society are refusing to do for the poorest in society.