'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.

Nothing like the politicians now. The Blair/Brown governments didn’t suck every penny from the economy to line their mates’ pockets. We had high quality public services. It was Thatcher who privatised everything in sight.

I'm sick of these middle-class earning £60k plus struggling stories.

I don't think it's struggling. I think it's not being able to afford as many holidays, restaurant meals out, very latest tech.

Struggling is no holidays. Everything except underwear bought secondhand. Supermarket Pizza Express pizza when its 50% off as a treat for dcs. House at 15 degrees. Going on walks with people = social life. And knowing that I'm not struggling as much as many of the thousands using foodbanks and living in mouldy, cramped accomodation.

Yes that’s how I feel too. Before divorce joint income c £70k. Didn’t feel well off but had enough money to get a new car every 3 years/ gym/ holiday/ ysl touche eclat (I loved this but now use collection 2000 or maybelline). Now under 20 incl benefits. And all the extras go.

Sorry I had a chuckle of recognition at the pizza express at 50pc off being a treat. Even that now though is too expensive due to col.

Equally, if you lived in London and grew up in London, you would be aware of cardboard city in the 80s - way 90s that definitely changed improved in Blair years.

The number of people rough sleeping has nearly doubled since 2010, doubled!! Equally a 27% increase in one year 22-23.

How are the lives of people living in 'mouldy, cramped accommodation' going to be improved by people not spending any money?

i think it’s the language that’s being objected to. “Struggling“. When it looks to mean not being able to afford everything they could or want.

I have mentioned it on a different thread but I think it is worth watching Gary's economics on YouTube. He explains what is currently happening with our economy really well.

He was in yesterdays Guardian:

https://amp.theguardian.com/commentisfree/2024/mar/05/banker-budget-mega-rich-traders-jeremy-hunt

I agree. Our household income is in that bracket and yes, not living in luxury and certainly noticed how expensive so much is but not struggling. Can pay my bills and eat and commute without any concern.

Agree but unfortunately many people just don’t get it 🤦‍♀️

Wow. Depressing reading.

There’s actually struggling, and there’s “can’t live the lifestyle you were expecting on £120k”.

If you earn £120k between two of you then no, you can’t afford two sets of nursery fees, the mortgage on a 3-4 bedroom house in London (assuming you are buying it now, not in 2005), to run a car, and two holidays a year. You just can’t. You can manage the kids and a two bedroom flat, or a house outside London, or no holidays/meals out. The question is, whether that is struggling or not. I’d say no, personally, though I’m sure these people really don’t feel rich.

The truth is by London standards they aren't rich - that’s inflation for you. There’s a gulf between “not rich” and “struggling” though.

Who said you get to define the word 'struggling'? From the article

Many readers who got in touch earn significantly more than this, but say they are still struggling to afford their bills and decent living standards due to rocketing mortgage, rental and childcare costs, higher household bills and the highest tax burden in 70 years.

So they're struggling to afford their bills. Bills they'll be tied into because of decisions made years ago before the price hikes.

No, bills plus "decent living standards" which is very subjective indeed.

Childcare may be a flash in the pan but when you are going through it, it has a large impact.
its why the government should help towards it more given its just a few years but has a large impact on people who pay a lot of tax.

And you think that should be accepted as a normal way to live? That isn’t acceptable for anyone.

I know why don't we all race to the bottom on this thread? How about acknowledging that the government could do more for everyone that feels like they are struggling? Meanwhile there's a whole section of the population capitalising through various loopholes and government incentives to make them even wealthier.

Seem to be loads of these stories about at the minute.

I find articles like this almost pointless. Much depends on mortgage/rent costs, childcare costs and other factors. I have a friend on a 27k income but parents give her a car every 3-5 years when they replace theirs, they pay for all their adult children & their families to go on holiday annually and she purchased a 3 bed semi with inheritance from granny's large estate and therefore has no mortgage. As a result she's much better off than friends on double her income or more if you factor in mortgage payments, car payments/savings and an international holiday.

Another friend is on 18k year and bemoans the fact people on more average wages of 30k feel hard done by, let alone people earning 50k++. What she fails to admit though is while her 'income' is 18k she has UC and top ups related to 2 dc's disabilities (minor disabilities - in mainstream school with good results, no health needs, both require 2x a year appts for disabilities) and she has another 22k a year plus with the benefits/top ups plus child maintenance from ex-husband. So while she says if she can manage on 18k people have no right to complain who are earning 30k+, she's actually got a household income of 40k+ with other costs related to dc like childcare and hobbies, split 50/50 with ex-husband too. She also got the house in the divorce if she gave up access to other assets. So her 40k is honestly much more like having an income of 60k when you add in no mortgage and only having to pay 50% of all costs related to dc. With no mortgage, living in a cheaper part of the UK, that's a very good income and while she can't see it, she lives well - lovely family Cornwall holiday annually, city break annually, eats out every weekend, meets friends for coffee 2x a week. She's also an only child and will inherit two houses from her parents, plus money from a grandparent's house that was already sold.

Then I know people with dc with significant disabilities that have to self fund many therapies and supports, have astronomical childcare costs and while they are on an income of 80-90k, they can't holiday, don't eat out, run a very old car, have never had any family help and come from lower income families who don't own property so there won't be inheritances. They have to budget every pound because there's very little left at the end of the month.

There is so much to everyone's financial story, it's rarely related to income alone.

Think that's because everyone is skinter thàn they were 15 years ago.

Except the very rich and those who got good COVID contracts.

Because its a post discussing middle class lifestyle expectations??? Its allowed. They’re still my friends, but im allowed to think that having a cleaner is ridiculous if you actually have the hours to clean your house (absolutely not talking about two full time working parents here).

Its an observation that what we expect from a ‘middle class lifestyle’ has significantly gone up over the years. Same as cleaning your car - my DH always does ours, takes no time at all. I hardly see anyone clean their own car anymore. Everything is outsourced so I imagine people complaining on an income of 120k might need to look at what they could actually do themselves and still have a great standard of living.

As someone living in London on a good salary in that bracket, it is not ‘struggling’. I do run out of money at the end of every month and have no savings, but that is due to not cutting back on things that aren’t necessities (eg nice days out, takeaways, gym membership, lots of streaming services etc). I know what ‘struggling’ is and I am definitely very fortunate that this is not it. I do worry about affording things however, but I imagine that happens to most people when you live a bit beyond your means.

It’s also the supermarkets with their egregious ramping up of prices on staple goods. Best places are mix of B&M, Aldi, Lidl and One-Stop. Even Aldi is getting ever more expensive; it used to be the cheapest place for Maple syrup; Now, it’s on par with the big supermarkets for costly condiments. No one can ever trigger an investigation in to the iniquitous effects of supermarket oligopolistic/monopolistic competition on customers. Rant over…

I agree about the profiteering supermarkets, who despite the record profits, the farmers who supply them are going out of business.Prices from farm shops and small businesses have generally been more stable throughout the col crisis, so I support them as much as possible. It’s quite easy to do with internet shopping.