'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.

@LewishamMumNow so even with the 180k inheritance you can't really afford the house in zone 3 London? Is it really any surprise to you then that other people without such a large inheritance can't either?

Do you pay rent or a mortgage, or childcare costs, or commuting costs??

I think a lot of this financial stress is due to people on relatively generous incomes being ridiculously over-leveraged and burdened with large amounts of debt. They live beyond their means - huge mortgages, expensive leased cars, kids in private school, expensive holidays. We're well-off, but financially cautious, and it never ceases to amaze me the amount of money some of our friends spend on their homes, their holidays, their leisure activities, their vehicles. So I'm not surprised that a lot of people on good incomes are struggling.

They have as they were easily led. Older people on the whole will never forget the 80's overnight hikes.

🙄

My mother in law has never earned more than minimum wage and her Dh lost his job and never worked after that. We earn combined £120k.

She bought a flat with her husband in the same area of London as i did at the same age and i could probably afford to buy her terraced house after 7 years of living in my flat (just like she did).

The housing stock hasn't changed! what has changed is the people living in those houses and flats. Sadly many have become rentals (70% of the flats in my 1930s development are rental and 30% are owner occupied ; 8 years ago it was the reverse). So the same kind of people are probably living in them just that most of them now pay the landlord rent unless they are professionals with local parents or have an inheritance (then they can be owner occupiers!).

Out of interest, when do you think mortgage rates will drop again? Do you imagine they will come down in the next 6 months? Just interested from personal point of view, our fixed crazy low rate expires in October and we borrowed to our absolute max, after being strongly advised to by IFA.

Bloody hell.

Dh just got a promotion and is on 48k. We are a family of 5, I am a SAHM. We were doing fine on his 35k wage before, but honestly, we feel like we’ve won the lottery now. We do live in the midlands though, but we own a home.

I do get it though. We live a really simple life. we have had the same car for 14 years now, bought second hand, we don’t go on holidays more than once every 5 years, we don’t eat out, don’t spend out on clothes etc. We have no debt at all, outside the mortgage.

I can see that if we wanted all that (I hate to say “higher standard of living” because I don’t think we live to a low standard, actually, I like living simply. Our car gets us from a to b and is reliable, I wouldn’t splash out on a new one as there’s no point), I could see how we would be struggling.

My ex husband is always broke despite him and his wife earning 100k each.

When our ds needed driving lessons, or anything, it’s us (me and dh) who have paid for it all despite earning a fraction of that as we are just better with money despite having far, far less. Ds dad can never help him with anything, he’s bankrupted himself twice in his 50 years too.

Many people are ignoring the cost of housing vs salaries & how it’s changed, the lack of social housing & rental costs vs mortgage. Also ignoring the decades of wage stagnation.

@Ghentsummer Well I'm on a SVR so my situation is not typical in that respect. Jesus, just agreeing that 120k is still a whopping sum even in London. #only on mumsnet

Lots of teachers, nurses, doctors, etc will fall into this but people say they should move & live somewhere cheaper, helpful!

This is just so incorrect. And this is coming from a single person on one income! I can see that's not what these people are saying. Have you seen the cost of renting??

@candgen625 I agree

When interest rates were low, some people saved like mad to clear debt. Others spent and ctreated themselves to holidays, cars etc

I wince when I hear people on high incomes bemoaning their lot. They have options some people can only dream of

In all honesty, I think MN has lots of Tory HQ posters now, they clock off at 6 to go to the pub...lots of these posts are trying to put everyone against each other, deflection again.

We can't all move to the North. I was born in West London, I now live in the South East City on the coast, I am a southerner and I want to stay here as does my DH who was born in Camden and whose family is in North London and Oxfordshire. There is no way with DH's job in particular Director at Architect's practice he can move to the North, there just isn't enough work. He also goes abroad regularly for work and the London airports are more connected. This article really reflects our situation and we live in a small originally 2 bed terrace which we converted to a 3 bedroom to accommodate our DC. As we are early to mid 40s we have no windfall money from property, last year was the first time we paid for our own holiday as DH had a bonus before then and my DC are teenagers, my Mum has come with us and gone halves. However, we did have a lot less 3 years ago and went out and spent loads more, now we hardly ever go out. Avidly saving for DS uni accommodation as means tested and as we are over 63000 we get the same maintenance loan as a millionaire - go figure!

Yes. Not in term time yes in holidays, No but I have costs the average person doesn't have due to my disability and stuff I can't do myself that need doing for example I have to pay for cleaning, frequent taxis because I can't walk myself home or to somewhere, gardening, ordering food in when I have a flare up around dinner and the kids need feeding, so its not that I get 20k and after bills with no other expenses. Obviously those things are not as expensive as full time childcare.

@Universalsnail a c.28k salary is required to give a take home income of 20k (which is what you receive in benefits so you are on an equivalent to 28k salary).
Where I live (a commuter town in the south 50 miles outside of London) it costs 1.3k a month minimum to rent a 3 bed terrace, add in commuting costs (mine are £400 a month), if I had a nursey place to pay for it is 1.2k a month, breakfast and after school club would be £400 per month and holiday childcare even more. Can you really not see that someone on 60k will have a similar disposable income to you given your rent is £300 a month, and you have zero commuting and childcare costs?

The Guardian lost the plot a long time ago.

No one is going to shed tears over people earning over 50K when we have so many children in poverty, people who can't turn the heating on, feed their family correctly in this country or find a decent, affordable home to rent and disabled and sick people being failed by the benefit system. That's the real meaning of struggling.

The rest need to stop whining because they can't shop at Waitrose every day, afford little Hugo's private school fees or take the usual amount of holidays each year....

There's definitely a bigger picture at play here. The middle classes are shrinking in the UK and the US. Enormous, obscene amounts of wealth are being grabbed by the already wealthy and powerful. Meanwhile, we squabble over the number of holidays, if any, we should consider ourselves lucky enough to have before we feel squeezed.

If I had time, I'd like to ponder on all this more, but I'm too busy working to pay the bills! I rely on many of the often surprising, maverick minds of Mumsnet to keep me informed.

I strongly disagree and none of our friends who are similar age have leased fancy cars, private schools, beauty treatments or fancy holidays, it is Daily Mail hyperbolic bollocks probably peddled by Tory HQ.

Yup. They then complain their local school has a recruitment crisis. Its not a coincidence that the only area without a teacher recruitment crisis is the north east aka the area with affordable housing.

For the vast majority, housing and travel costs are what's eating up their income. I think the single childless earners and the middle are prob having the most difficult time at the moment. There's absolutely nothing I could fall back onto if I lost my job. UC would pay me something like £300ish a month and pennies for housing.

I genuinely think housing is one of the biggest factors in this. I earn 3x what I did in my 20s, as does DH. We have a fair amount coming in to household. We still have a budget and have felt the pinch like everyone else. The thing is we have a huge mortgage because we have a big house. It's a choice we made and am prepared to live by so we don't moan about things being tighter. We could easily live somewhere smaller but perfectly manageable and be much better off. I'm not sure those options exist everywhere in the country though, particularly London.

You'd be shocked how many kids of parents earning 50k a year are living in poverty due to housing, childcare and travel costs. Forever stuck in an unregulated rental market too, paying £2k a month for a mould ridden flat.

I said in my very first post that I replied to in this thread that a family on 60k income down south would be tight. This thread is talking about people ranging from 60k - 120k. I said in my very first reply 60k would be tight down south but people on 120k are not skint. Big difference between 60 and 120k

Also I do have childcare costs in holidays. People are being very assumptious about my expenses in this thread and how much of my money is actually disposable

I think people who have made sacrifices to get better jobs deserve a far better standard of living than those who havn't. That's no longer the case unless you're a much higher earner. That's the problem really.

There's just not much point in working longer hours, taking on more stress, spending years doing further study, if you're not going to be substantially better off for doing that.

if these people don't live in houses with private gardens or drive new cars, who is going to do that? The people on over £200k? I can believe that in London but across the entire SE?

Like i said i am not squeezed on that income but I also don't drive a car and live in a small 2 bed flat. We prioritize holidays and yes go to waitrose. Is everyone going to live like me then? that would be a little strange!

This.

Lots are struggling but the people at the bottom on extremely low incomes unable to feed themselves need the most help not people who just borrowed to much to buy the property they wanted.