'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.

When you earn more you will spend more I know this will be hugely unpopular but i do not feel rich at all with household income 300K - mortgage itself is about 7K a month thats BEFORE interest rate changing in a month so we would be looking at 9K a month. After that its nursery and there is always sth to pay. No cleaner, no designer bag, we have a holiday home so dont even spend much on holiday.

It sounds ridiculous doesn’t it, but the cost of childcare + housing is astronomical in the South East.

£500k mortgage at 5% (that’s a small house in zone 4 / two bed flat) = £2,500pcm

Two children in nursery at £1.5k a month each (Inc tax free childcare and free hours) = £3,000pcm

That’s £5,500pcm a month to live in an average house in the South East plus two kids in childcare.

Two people earning £60k each would have £800 a month left after paying the above - without having paid council tax, energy, food, transport etc.

So owning a holiday home counts as frugal? 😂

my answer would probably be incredibly rich! The reality is quite different.

money is a constant source of worry

This is the type of thing I mean when I say people quote "struggling" when they could reduce their savings, access their savings, they have good pensions, could reduce their holidays. This isn't struggling or "quite different to rich". People forget that all of the above are luxuries. You don't need to constantly worry about money, you just need to make different choices if you want more money in the bank. It all boils down to choices in this situation.

@Lulubo1 - your “friend”s DH that will be some cash jobs. The shadow economy is into the hundreds of billions.

Where I live, there are pockets of run down housing with top of the range cars on the drive. Quite a few actually. Nobody is checking up properly. Lots of drugs, cash restaurant and car cleaning businesses, prostitution, people trafficking, gangs, county lines etc all on the outskirts of a nice area in London. It is all very obvious and the police must know, but they don’t have the resources to deal with most of it.

I live and work in SE London, earn approx £35K a year, am single no kids, but bought property years ago, have investments and also family investments which technically bring in income. More asset rich than money rich. Yes, sometimes we all struggle.

An ex-GF of a friend of mine has moved back up North with her young DD, as life is cheaper there and she has family childcare options there which aren't there when she lived London/South apart from her ex-SO.

I agree with what a PP says about housing and childcare being astronomical in SE/London. DB/SIL have just had their second child (baby) and SIL has already mentioned nursery costs have gone up. Add in breakfast/after school club costs and it's a lot. Partly why they're looking to move near where me and DM live so we can help out with childcare more. She's also been paying an interest only mortgage. But they manage. DB has started looking for permanent work as he used to work in TV/Film but lots of this work has dried up and as he's aged (he's now 50) he doesn't want to work away from home and do long days/nights anymore like he used to do.

Oh wow I've heard it all now. You know rich doesn't just mean what's in the bank right? Your mortgage alone in a year is 4 years salary to someone. Completely tone deaf.

£200k in Southampton...must be a ropey bit.

We're on a joint income of ca 85 k a year.

We're a bit hard up, because I'm on mate entity leave at the moment with our 3rd child.

Obviously nursery fees are very expensive when they are young. When I'm working, I have to send my children full time, and nursery fees are more expensive than our mortgagem

I agree with a pp that said living in London is a choice. It's one of the most expensive cities in the world.

We live in Birmingham. We would love to live in London, we love the city, but we know we can't afford itm

I think part is due to expectations/wants, not needs.

I think the other problem is large childcare bills, and high mortgage payments (e.g. over £1300 per month) for first time buyers who bought in the last couple of years. Plus the cost of commuting which can be hundreds of pounds a month. These three things can quickly eat up a lot of money.

Someone on £100,000 cutting back might mean shopping in Alidi not Waitrose, only holidaying once per year - maybe in the UK. Only going out to eat once or twice per month. Only having the heating on a few hours a day. Buying a small 3-bed semi. Drive an old car.

But, they expect to be able to be a lot more frivolous. Maybe a few holidays a year, shopping in Waitrose, a cleaner, a leasehold car, beauty appointments, serval takeaways/meals out/pup trips per year, large detached home. And doing this while still paying student loan, saving, paying into pension.

In other words, people on 100k don't "feel loaded", they just feel normal. However, the "real normal" are cutting back on meals, going cold, haven't had a holiday in years, haven't bought clothes/hair/beauty in years. Aren't going to the dentist. Are in rent and energy arrears. Have no car. Walk to work or get the bus.

But why is the baramoter for a good life or not whether you are starving/on the bread line. Don't we need people to be spending money to provide jobs.

There’s quite a lot of distance between starving or on the breadline, and going on less expensive holidays and eating out less often than you would like.

So many of these posts on here lately. I haven't RTFT just skimmed and read OP's comments/responses but WTAF. I am sick of seeing this and very worried because people on £60k+ really DO seem to believe they are hard done by. Is this because the media tells them they are?

Meanwhile posters on £20k, £30k etc come on and say hang on, get a grip, only to be told they are just jealous. I saw one on another thread where someone had posted (in response to a mum saying she was struggling on £20k) "envy is a terrible thing".

Where have I said people need to be starving? Reducing your multiple holidays down to 1 or 2 is still spending money. Saving a bit less each month = more money to spend. Going out for meals sometimes is still going out. The poster above is far from struggling when they earn £120k, save plenty on top of their likely already plenty, you get the idea.

Fellow Londoner with a young family and this sounds very familiar.

Childcare for two kids might be £4k+ a month.

Mortgage at todays rates might be £4k+ a month.

That’s £8k a month out the door before you’ve started paying for food, transport, bills, council tax.

Just nuts.

Exactly

@GoingDownLikeBHS What is apart from envy though? Why the race to the bottom? My neighbours earn more than me but I can’t argue they are better off, they didn’t pay what I paid for housing. I couldn’t afford my house on todays prices….

Were you born in London? There's wanting to live there because it looks fun and then there is a sense of connection you have to the place. DH and I were both born and grew up in North and west/south London have family in North London but we don't live there due to affordability, we live in the South East though and for DH's job in particular and mine we need to be. We can't balance children with 2 hours commutes. Everyone moving to the Midlands or the North is not a solution anyway!

Makes me really angry. I pay my taxes and my way in life (like the majority of people!), and then there are people like that. You articulated it really well. There just isn't the resources to do something about it

I don't know how anyone survives on £20k, with three kids, that's £1600 a month, and rents for a two bed around here are about £1000 and that's not London or anything. I don't get how you could get food, bills, internet, even school stuff out on that wage, it must be terrible.

If rents/mortgage are much lower, then it might free up some income. It's rents/mortgages that are crippling people.

I’d like to point out to those on £30k-ish doing just fine that if they earned double that through one salary they’d be surprised how little more they’d get. Take off any benefits and a load more tax.

and those living in London paying 2 x childcare and one parent on £100,001 and one on minimal wage will be on their knees.

i am very lucky lifestyle wise but i can't shake off a nagging feeling that my lifestyle is because I was lucky to have family who helped me when i needed it and also cos I don't need a car where i live and i also live in a modest flat. not cos of the £120k household income.

Its £120k plus nice MIL plus no student loans for me (dh only has 4k left). this kinda means that despite us trying so hard, we still have to rely on family

not everyone would be that lucky. Also its 60k to 120k household income.

We will just see an increase in young skilled people going abroad & then people moaning about a lack of a GP or a shit state school.

It's threads like this that make me wonder why people think MN is populated by the privileged middle class.

😂😂