'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 find it ironic that apparently an "immigrant value" is living close to family. Havent immigrants literally moved across the world to set up home away from family?

Its sad that social mobility is being stunted by needing family wealth (be that time, presence or money) to be able to aspire to something different.

And I'm saying that as a Londonder who moved to Yorkshire as I prefer it to the city. And our 70k family income means a nice (not fancy) house, good school catchment, one foreign holiday a year plus smaller UK trips etc... the sort of better side of average life you would expect really.

This.

@Universalsnail you did say that about 60k,my apologies, I should have reread your specific post before responding.

Policy makers have done a disservice to this country there has however been a huge seismic shift culturally and that is single person households.

In the late 1960’s 16% of households were occupied by a single person it is now close to 30%. That’s a mix of people living longer and people breaking up more freely. Nobody wants unhappiness and to stay in an awful relationship. I have three friends currently divorcing, one is because of an affair and the other is because my two friends are dissatisfied with their husbands. So my friends are very much is this it and are doing something about it. I see a future where people will divorce less in these scenarios. We are older GenX so they bought property just before the ensuing madness so will be ok once assets are divided. Plus they both have decent careers.

some do, some already have family here. for example an aunt or a cousin they can live with or they marry someone from an immigrant background but who was born here.

Some also have their relatives from their home countries come here to stay as tourists for up to 3 months in rotation. They can save on a lot of childcare during the baby years. MIL 3 months, Mum 3 months, SIL 3 months, Dad 3 months etc. That is a year of free childcare!

We live quite close to each other and in similar situation!

I agree that it’s crazy because I think it comes down to expectations. We live in a small flat, but many in London expect to live in a three bed house with garden as a
minimum. That’s almost £1m now in my not very posh area.

You are in the North, we can't and don't all want to live in the North. Why can we not live within 2 hours of our families anymore? Where are the jobs for us all in the North. Commute from the North, yeah because the train infrastructure is so good.

What happened in my case is that my aunt and uncle moved to the UK for economic opportunities and a better, more comfortable country in general. My parents wanted to move, they were trying to choose between UK and Australia, they chose UK literally because my aunt and uncle were there and they felt they would be more comfortable with family nearby to help. Then my aunt and uncle on the other side did the same. Where we lived at first (I've moved now) there was little enclave of immigrants from my country, this is very common and then infrastructure grows up around that immigrant community.

So yes we do tend to live near family, although I appreciate your point and it does sound ironic when you put it like that!

if you’ve been able to overpay your mortgage at 2%, this would absolutely make a difference. A percentage increase on a mortgage will impact some people quite considerably.

if we assume that those with larger incomes will generally have larger mortgages, the % increase may be difficult to manage for those that have not been in the position to overpay.

it’s a race to the bottom to not be sympathetic to those who say they are struggling. Different people will have a variety of different circumstances They are juggling.

I feel very lucky in my current position not be able to keep my head above water for now, but things can change all too easily. I have an awfully small pension at the moment due to stupidly not paying attention to tongs like that in my 20sand 30s so things will not be so rosy in the future!!

The real divide isn’t achievement/education anymore but between those who inherit/get help onto the ladder and those who don’t and that is utterly demotivating for all really

yep

In what way? Please elaborate? Do you mean people have tried to pay for housing to you know, actually live in so they are not homeless? Such a big fking ask these days to have a home to live in!

We're on £160k and we have nothing left at the end of each month.
We have a £500k mortgage and 1 car.
2 kids.
Our money goes on childcare and extra curricular lessons.
1 camping holiday a year.
I just got my annual bonus of £6k. I take home less than £3k of that...
We pay so much tax.
No cleaner either but I did buy an overpriced coffee today.

You bought a coffee- well no wonder you don't feel that well off, I can only dream of such indulgences!

when we moved house we found some boxes of old paperwork in the attic so we have been using it in the log burner as kindling.
We found payslips of DHs from when DS1 was a baby (so 17 years ago) and DH was earning £800 a month- I had basic maternity so another £400 a month. We weren't living the high life on that but we did ok. Now £800 wouldn't even pay our mortgage!!

We now have 3 teenagers and earn substantially more - middle of the bracket in the original post. We dont live near london but do live in an expensive area of wales. We have a good life, can afford our bills, dont have to worry about turning on the heating or paying for school meals etc. Kids do extra curricular activities but we dont really buy designer clothes or all inclusive holidays etc.

You could always move to the North. If you live in the North already then cut back on the coffee!

But what is actually more expensive in the South? Housing? I could afford to go to a £500k mortgage which might not buy us the same four bed detached in the South but I imagine would buy us a three bed terrace within a 2 hour commute of most places in the South.

I didn’t at any point say everyone should live in the North. I also wouldn’t want to live in the South, but my point is that I wouldn’t be starving if I chose to.

The more relevant criticism of my post would be that I don’t have childcare costs or the general cost of children to contend with which is actually what would change my financial position considerably.

Take home 8 k
Mortgae 3k

Wft are you doing with the rest !

Or lament that it is what it is, we are literally powerless to do anything and hope that you have a close family (that you like) to fall back on with good old fashioned values like women staying at home or men being the boss of the house.

I hate to tell you but everyone has suffered from the cost of living increases. Many many private sector employees get no pay rise whatsoever when times are tough. It really does sound tone deaf to hear public sector employees bleating on about not getting a ‘real terms’ pay rise, when they did infact see their pay go up. And they face limited threat of redundancy. Tone deaf.

We are finding that £1000 on university for our 2 DC is very difficult each month on top of £1300 mortgage.

Gross income means nothing. If you look at our gross income we are on £67k (together...I work part time) but after tax it's considerably less. DH has a company car that sucks £000's of tax off his personal allowance among other benefits (health insurance for us both) and pensions. We have barely anything for "fun" costs. Our mortgage repayment is going up 50% in June. We've no credit/loan debt and not made silly decisions. DD is under two, so nursery fees are crazy high and they just emailed to say they are going up another 12%. We are pressed, but we know we are fortunate to own our own home (granted, it's mortgaged). I think my middle earners are squeezed and we do be careful what we spend money on. I buy basic ranges of food now. Then I see my friend who stays home, doesn't work, claims benefits and her DH is self employed, but works only enough to not earn over the threshold to repay his student loan. They get takeaways 4x a week, council tax is reduced, rent is covered by benefits, they take the kids out all the time and buy designer clothes....on benefits. We work our backsides off and we live paycheque to paycheque. So, in SOME cases people on benefits are better off. However, I know that is not always the case and there is a lot of people who need help and don't get it. The people who know how to play the system get away with it. It's a sad state of affairs right now for so many people

I think the killer for middle earners, alongside childcare costs, is when any children go off to University. The minimum student finance payment doesn’t even cover half the average annual accommodation cost any more. You suddenly have to find around £1k per month to subsidise a reasonable standard of living for your child.

Yes
Yes
mine is reasonable (I worked for a charity for many years and have only been on my higher salary for 18 months in the private sector) freelance husband no way
no car
a couple of mid-level holidays a year and a few one night away stays
eat out or takeaway maybe once or twice a month
spend probably £350-400 on food a month

Not sure what your questions are trying to get to, I acknowledge that compared to many I am very privileged. But I still worry about our finances all the time and buying this house is my biggest regret.

120k household sounds a lot to me I can't imagine struggling on that!
Our household income is in the 60-70k range but we have 2 kids, we aren't panicking about paying the bills but do have to be a little careful about spending and often dip into overdraft by the end of the month. Affording holidays is a challenge.

Uni is just not an option for most of those kids anymore tbh. It's tough going even for those eligible for max loans.