'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.

I understand some cases where a cleaner is really needed - both working full time, long hours, no family help etc, but I have friends (not on particularly high incomes) who have cleaners and are not working full time. Just seems a ridiculous expense and almost as if people think cleaning and looking after their own home is beneath them.

Just another thing thats been added to the list of middle class things to have.

Average income is just shy of £28k, but that is average. Half of the full-time workers earn more. Most people are buying homes as part of a couple, too.

We live in a standard 3 bed semi and it’s worth around £250k in Scotland, we could have had a four bed detached new build from a budget builder for about the same price, or a three bed semi from a more high end builder.

Not to mention a lot of people have equity. Our old home doubled in 8 years, so we had a hefty deposit.

A youngish couple on a joint salary of £60k can buy a £250k home relatively easy.

They are also allowing longer terms on mortgages now than they were 20 years ago, since retirement age is going to be 900 years old by then anyway.

This thread, having now read the whole thing, is a fabulous/horrible example of working people being pitted against each other in us vs them. But the us vs them is all wrong because people with a little are being pitted against others with a little bit more and to be honest the middle class doesn’t exist any more. It’s being sold as “well you should be ok” or “you’re jealous” and a whole raft of other things. And no one is looking at where the real problem lies waaaaaay up top.

The problem isn’t the working couple with a gross of £150k, or the mum on disability on £20k. The people struggling on rent vs the crippling mortgages. North vs south. The Aldi shopper vs the odd takeaway. It’s way above that with the people who can afford to pay someone to manage them out of paying tax and offshore their assets etc. People without significant generational wealth are prime to be struggling a touch, even if they’re not admitting it openly.

It is in the governments interests to keep the rest of us finger pointing and fighting amongst ourselves over the scraps we’re being thrown whilst they pocket everything they can. Blame the Dinkies, blame people on benefits, blame immigrants. Anything to stop us blaming the bloody government who are the people we should all be bloody rounding on.

What scares me, as someone who paid a mortgage in the 70s and 80s, is that people are struggling like this when interest rates are so historically low.

WTF will happen if we get double digit rates like we had back then?

Who remembers when Blair got in in 97 what I remember and I can’t stand the man but at that time Britain was fantastic and everybody felt they had a piece of the pie yes some were better off but most felt included in society not so so divisive

This - a 1000%….

Yup.

@IvorTheEngineDriver house prices were much lower 18% on a 30k mortgage (the price of my first flat) is very different to 18% on a £200k mortgage (the price my first flat is now worth - and no, I didn’t make that on it). I think of interest rates got that high again a significant part of society would collapse.

Brilliantly put, absolutely spot on.

Absolutely this.

I am extremely lucky that I part own my home for now (children's father has a large proportion that he could force a sale on if he wanted if things went sour between us in which case I have no way of buying him out and never will so I'll loose my home and will have to rent)

Many people on disability benefits don't have that.
But I will never be able to save anything for a pension or even regular savings. Never be able to get my kids the extra bed room they need so fuck knows what I'm going to do when I've got teenagers sharing a mixed sex bedroom I can't get us a different house, can't get the broken bathroom fixed unless children's father decides to buy it.

And what's even more depressing is there are no further options in life. This is my lot that realistically is going to get worse because one by one my kids will turn 18 and my income from disability will drop each time.

So basically I can look forward to a house that will gradually need repairing that I won't be able to repair, if my children's father doesn't decide to sell it from under me at some point when they are grown, less money then the low income I have now and a state pension that will likely be barely anything. It's bleak

I sure wish I felt like money was tight because I was paying 2k a month on a mortgage that was buying me a nice 4 bed house, and childcare costs that were keeping me in a career with a pension and future earning prospects, instead of feeling like money is tight because there isn't actually any money and there probably never will be unless a miracle happens and I wake up not disabled or sick anymore.

I feel a bit sick at how much we stretched ourselves on our mortgage 2 years ago. Now remortgaging and our monthly payments are going up £700 a month. Luckily we can afford the hit but it does make things more tight. I'm the higher earner and feel immense pressure to maintain this level of earnings in a fragile climate.

Well said.

I am pro Labour but... I do think part of the genius was to tell people a lie. That "we are all middle class now". That was not true then and it is not true now because it's clear that assets and inherited wealth matter and are going to matter more in the future, not less. We don't have a massive middle class. We have a lot of spending and debt. That started with Blair and I don't think it has ever stopped.

I remember it well

But look how that turned out. Just like all of the politicians now. There was a good programme on BBC2 that explained how he wanted the London property market to become like Monte Carlo. Interestingly I noticed that vanished from everywhere a few years ago.

inflated salaries for council seniors, PFIs, privatising profits etc etc.

Or many of them bought what they needed at the price that it cost.

But it's their choice to have cleaner whatever number of hours they work. Why would you judge them?

Bloody well said 👏👏👏👏👏

Just seems a ridiculous expense and almost as if people think cleaning and looking after their own home is beneath them.

Cleaning my home isn’t beneath me at all, for me it’s worth the expense of paying a cleaner, it supports a local small business and frees up my time.

Maybe they are selling drugs on the side????😱

It’s all so depressing. I’m 57 and just feel totally joyless just feels like working harder to stand still the politicians are completely morally bankrupt no one is working for the greater good just putting people against each other. A friend has 21 flats has been offered £850 per unit per week per person to house asylum seekers from the council. This is not right but if you say this you’re racist it’s just a race to the bottom

we both work ft. We don’t go abroad on holiday very often (there is a family holiday flat we use a lot: so we go there a lot instead). To me the cleaner is worth every penny

Govt could instead put that money to processing asylum claims faster. Then those granted status can work.

Yes, absolutely! 👏👏👏

Not a life of luxury no.

But I am in a bit of a unique position with this as before I got sick and ended up having to move out I lived in a 85k joint income household. We had a holiday in Europe a year, mortgage, pension, personal savings for house renovation, savings in ISAs for kids, savings for a decent Christmas each year, I bought decent quality kids clothes and wooden toys, got my hair done, 2 kids were in nursery 3 days a week, could buy a new washing machine if it randomly broke.
Now on 20k the vast majority of that is gone and if I do ever let myself treat myself to getting my hair done or something, or buying new make up, or treating my kids to a Nike jumper instead of supermarket brand or heaven forbid the washing machine breaks it's basically bought with debt that takes me months to pay off. I can afford the basics. Have no savings and no money to save.
I didn't feel rich in an 85k household and arguably that's not rich but in comparison to my now 20k income I know that I was far more comfortable day to day and definitely when considering the longer term picture then I am now. I could only dream of having that much money again.

It's just shit for everyone really
I was pleased min wage was going up but the increase just gets wiped by car insurance, council tax, everything going up again
Trying to save for a new pair of glasses but the car needs a service and MOT which wiped my tiny amount of savings out

I keep looking for a job that might pay 28-30k but there's nothing. Can't do more than my FT 40hrs because of chronic health conditions but not sick enough for PIP
The only benefit I get is 25% off my council tax

Oh and the apartment management company seem to be reacting to a cost of living crisis by increasing service charges by 27% rather than look at the fact they're using stupidly expensive contractors. Why not employ local gardeners and window cleaners and save money?