'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.

LOL, in that case there are a lot fewer "middle class" people in the UK than we thought, most people just borrowed a lot for a big house and used the credit cards to appear well off, traditional middle class just had a "profession" that paid them more than unskilled or manual labour, often in rural areas, and cities as well, posts for ministers and doctors for example would include a decent sized house that went with the job and made them maybe appear better off than they actually were, having "capital" is a totally different level IMO. I would guess (like the article says) that a lot of people now who think of themselves as "middle class" can barely make ends meet.

So what do you want? People to shut up or give a part of their income to those who are at very low salaries? What is the solution you are getting at by insisting we are not all in the same boat when it comes to decline in living standards?

Responsibility in what way? What about those earning above 500k or even higher income likes of Boris Johnson and Rishi Sunak and many other politicians?

Should we absolve recent governments of any responsibility and blame those who earn 100k?

I’d rather have a cleaner for 2
hours a fortnight than a holiday abroad! It makes my day to day life so much better

I want us all to agitate and vote for a decent system. No, charity isn't the answer. We need people who can afford it to stand up and say so. No more nonsense about 'I earn 120k but woe is me, the papers tell me I am so hard up'. We need people to stand up and admit that if things are hard for well-to-do voters, they are impossible for poorer people.

I agree about all to agitate and vote for a decent system. Not which system.

I don't think people are saying it's just them hard done by. But people tend to talk about themselves. So poorer need to speak for themselves too.

I take home £6100 a month. Single parent of 3 kids pre teen and teenagers.

My mortgage is £2400 (remortgaged to buy ex H out in divorce, then rates went out, would never have chosen to have this big a mortgage).
Child expenses eg phones, contact lenses, clubs and activities etc, public transport to school / college (expensive as we live in an area where they need to commute to college), £500
Subscriptions only have Netflix and Spotify.
I save £700 a month for annual expenses such as a fund for Christmas, birthdays, boilers breaking down, car maintenance etc. However I constantly dip into it and only have £4000 saved. Out of which I need to pay a tax bill and some debt from my divorce.

Utility and council tax bill (includes electric charging at home for car) £600
Car lease £300
After all my other direct debits insurances and pet food and childcare (only for youngest now luckily) I’m left with about £750 a month for discretionary spending, clothes for 3 kids, food and activities. Out of that I spend about £500 a month on food then modest amounts on taking kids out I budget £150 for days out for them and my own “going out” budget is £100 a month so maybe a couple of local outings for kids and meals with friends a month but no holidays or weekends abroad. Yes I’m lucky to have that level of discretionary spending but it honestly doesn’t feel like I’m living a life of luxury when I work very long hours in a high pressure job and I definitely can’t afford anything other than camping this year. I also am expected to be dressed presentably for work as earning this level as I have compulsory networking events, I also am expected to do this in my own time eg evenings and weekends. I buy mainly from Vinted. Lost a lot of weight recently so have to replace clothes.

i also fell into the 60% effective tax bracket for the first time this year (due to loss of personal allowance) where I didn’t realise not enough PAYE tax was being taken when you wear over £100,000 and owe £3000 tax.

I'm happy to clean my house once weekly and do all the deep cleans but actually it needs doing twice weekly to look clean all the time, so I pay someone who needs to earn money 1.5 x NMW to push my vacuum cleaner around the house and dust. It's not a job; it's two/three hours a week.

My husband’s sector have not seen a pay rise for years. They negotiated one for 2022,2023 and 2024. It would be about £300 a month extra (and £3k in back pay) but because of some reason they haven’t recieved the pay rise or back pay yet.

meanwhile the COL has been increasing by the bloody month

We have a before tax joint income of 137K we have 4 teenage DC very comfortable, we bought our house and based our mortgage and bills on one salary years ago. I only went back to work 7 years ago before that I was a SAHM due to childcare costs.

Most colleagues I work with with younger children have family support, very few have full time nursery/childminders. It’s quite common for the mums to go part-time after having a baby too.

One of the things that shocks me the most is that the average income in Scotland is about 27K just now yet there’s so many houses being built, standard 3 bedroom houses for over 200K and I wonder who is buying them? 4 bedrooms are now 350K cheap for the South but very expensive for Scotland. We bought a big standard 3 bed for 125K 20 years ago and extended it couldn’t afford to move now.

Yes, but if you are really struggling to make ends meet, you may not have time or energy to talk. That's why the rest of us need to take responsibility.

I do say that. The problem with a lot of voters is they think that even though they are poor, they may do better one day and so they should vote tory as they dont want higher taxes on that fateful day they earn xxxx amount.

People like me and dh just show them that this is wishful thinking. Esp my dh who grew up on free school meals- he has a masters, works for a bank, higher rate taxpayer but what he can afford at the age of 34 is the kind of properties that his mother also bought a generation ago. The difference is no inherited wealth.

How did we become a society where wealth matters more than merit!? Given majority of people do not have inherited wealth this is something to ponder.

Nor have I said struggling I am making the point that there’s a huge portion of our (high) income going on childcare which is only a ‘choice’ if we consider working and paying tax a choice and as a result our lifestyle choices are not all that extravagant.

Also, considering pension contributions as an optional ‘nice to have’ I do not agree with. When (if) I get to retirement age I fully anticipate the state pension to be extremely meagre if in existence at all. The reason why the government made the changes to workplace pensions is lining us up for this.

i earn a decent salary (not in the top 1% mind) and I love batch cooking!!! Its much nicer and healthier than buying ready meals (and I enjoy the cooking )

Basically, wages in nearly all sectors have not kept pace with the cost of living. I would tax away the profits of water companies, oil and gas suppliers, train companies and any other corporation taking the piss out of British bill payers. Why should they be paying out dividends and fat salaries to their boards when they are failing to invest in infrastructure and delivering shoddy or overly expensive services.

I’d use the revenue raised to ease the financial burden of the working population.

Nor have I said struggling I am making the point that there’s a huge portion of our (high) income going on childcare which is only a ‘choice’ if we consider working and paying tax a choice and as a result our lifestyle choices are not all that extravagant.

You don’t consider having £1.5k to put in pension, health and dental care to be a privilege afforded to you by your earning power? Saving a significant sum each month to be a privilege afforded to you by your higher earning power? Which is absolutely fine, you prioritise financial security over extravagance - the vast majority of people don’t have that choice so saying people on £120k are feeling the pinch (as the article linked to in the OP is) isn’t likely to generate much sympathy.

People at the other end of the financial spectrum are constantly asked if they checked they could afford children when they talk about struggling financially, the same applies across the board. Surely people earning £120k plus knew the very high cost of childcare that would be needed to support their career too?

I wouldn’t. I’d make them invest the profits in actually providing the services we pay them for. No dividends or bonuses, just solid investment.

Yes! People seem to think that earning £60k -£120k is megabucks and they must be living a life of luxury as they are living on £24k. But to actually have £24k in hand, your salary needs to be about £30k. And then the various benefits… (housing benefit for one). And it also depends where you live and when you bought your home (where I am in Scotland, we bought our house a few years ago: it’s a big house and we pay circa £1k on mortgage: locally now £1k only gets you a 2 bed flat to rent)

I'd have to disagree @Narwhalsh . The changes to the pension regime were made to make certain that everyone is setting aside something for their old age, and that their employers were too. Before 2012, employers did not have to run a pension fund, so only big companies did. Now, even tiny companies have to contribute 8% of salary per employee, plus whatever the employee puts in. Clearly the value of the state pension is expected to decline as the figures build up. On balance, this is not a bad idea.

But then, you have huge employers. like the major supermarkets, offering work/child friendly hours but limited to 16 hours per week at just above NMW. Dig deeper and there are no pension contributions, or sick pay, and the employer expects the taxpayer to fund the UC too.

I could post two comments here:

One says that as a taxpayer, I get huffed as being expected to fund benefits a self employed person could never qualify for.

On the other side, that the benefits are too meagre.

I agree @BIossomtoes - solid investment and no dividends or bonuses would be great 😌 - but as this thread is about families struggling financially, the investment would need to result in some financial benefit, eg more affordable bills / transport in the longer term.

absolutely unbelievable.
The person on 60k in your example has a job, they have a 3 bed home, they have chances at promotion and choices in life that someone on disability benefit with limited ability to work has no access to.
Which would you call a “comfortable life”?
Give your head a wobble

One says that as a taxpayer, I get huffed as being expected to fund benefits a self employed person could never qualify for.

I claimed benefits as a self employed person, what could you not claim for?

I believe firstly disability benefits need to be in line with an actual living wage. Then out of work benefits need to be decent. Scrap this you’re allowed to work 16 hours a week before it affects your benefits nonsense. Work should ALWAYS pay more than being on benefits, no more of this “it’s not worth my while working” The government should not be topping up people’s wages. Childcare should be affordable (look at Scandinavian countries). And whilst we are at it my last big bear absent fathers, if you father a child you should be paying for them end of, none of them going AWOL, self-employed bullshit. Absent fathers vilified not single-mothers!

Some insane responses to you on here (generally). Don’t let them get to you.

It’s ridiculous! I mean; I hate London and wouldn’t want to live there even if I was given a massive house for free..::

but I imagine anyone that is originally from London has all their family and connections there. So they should be able to live there.

perhaps it would have been an idea for them to have done something similar to what they did in Jersey, that you have to live there for a long time before you are allowed to buy a home