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

My immigrant parents bought a house in a rough part of London with one parent working It gentrified massively & now you would need big money to buy.

Unfortunately, I think this is very complex.

if you live in certain areas people have been caught up with a keep up with the Joneses.

The school gates of the outstanding school are so competitive and the way to fit in is to spend.

People in this income bracket judge others on what they have, because it’s how they judge themselves and partners.

Being middle class and belonging has a high price which has largely been funded through debt. I’ve seen so many friends move into £1mill houses whilst hiding from the credit card company.

It’s fine for people on £25k to say oh look whst I could do with an extra £50k. Yes if you continued in your current life style that would go a long way. Move to a bigger house in a better area, more middle class school and that extra 25k (after tax) would be gone in a heartbeat.

Surely people's wealth is what they have in assets as well as earnings? As pp's have said - people earning £60k+ a year are buying more expensive houses and paying more into savings. If they cashed everything possible in and moved to three-bed terrace in Grimsby with a £1k rainy day fund, I'm sure they would be able to live 'comfortably' on the money leftover.

The media and the politicians prefer it when people punch down to solve their problems.

The people at the top earning millions and the MPs that enrich their friends whilst taking £££ of tax payer cash don't want those on £60-£100k looking up and wondering why those above have more, they want them looking down and wondering why those poorer than them have so much.

And it works too.

Someone once said that we're all drowning, people blame the others desperately trying to swim when they should be blaming the ones filling the pool.

🍿 honestly I’m only here for people like @tiantian1005 saying they don’t spend much on holidays… because they have a holiday home 😭😭😭

I can't help but be a bit eye-rolly about this sort of thing really.

I appreciate I am not in London, I'm in the north, but I am a single person, on my own. I earn £32K Pro rata (four day week) and £150 most weeks from freelance work. That's it.

I have a mortgage and run a car. Also a huge dog to feed.
I still go on breaks, buy luxuries albeit not many but I don't feel I have to go without. I buy wine and nice food and go out-I don't eat out as much as I used to but that is more to do with the last few times I did it was crap, rather than being unable to afford to!

It’s a bit more nuanced than that.

Cost of living varies by location / family size.

£60k after tax is £3323 a month.

£30k after tax is £2,130 Inc child benefit

This is £1,193 a month more. This is less than the cost of an average nursery place.

Do you see where the challenge might be?

@BournemouthIsDepressing why the laughing?

“OECD figures also show that the total number of UK-trained doctors in Australia rose from 3,949 in 2013 to 6,621 in 2021.”

Cannot believe the poster on £300k with a holiday home who doesn’t feel rich 😂

some people have lost all perspective on their other planet.

Maybe the holiday was not bought by us? I just cant stop thinking why people on social media go to Dubai/Maldives all the time I must be doing sth very wrong with our finance.

Keeping up with the Jones is a choice though! I have never in my life derived my self esteem from what I buy and moving house wouldn’t make me start.

I wouldn’t put someone on 300k in the bracket the OP is talking about.

That article is insane! We are in the privileged position of family income in excess of £70k. Life is definitely not as comfortable as it was 5 years ago but to say its hard is completely disregarding and insulting to those families on low incomes. Most of us have had to accept a drop in living standards so those for whom that drop involves less holidays or other luxuries should count themselves very lucky. For many the compromise is in food or heating. That was a shit piece of journalism not worthy of The Guardian.

Without childcare we would have an addition 30k plus per year of disposable income (before all the other costs of children). It makes a massive difference.

yes , I chose to have children and don’t regret it all but we do also need people to have children in order for society to continue and it is large impact on our finances just to enable me to keep working and paying taxes. It does make you wonder what the point in working is sometime but need to think about the bigger picture and hopefully being in a better position in the future.

Fine but had the higher earning middle classes bought the cheap housing, what would the lower earners have bought? Or would they be stuck renting forever? This is such a silly argument.

No offence but you really must be!

We are on mid 90s income but don't have any savings, DH and I only started paying into pensions at 35 we are early to mid 40s now. If we have had more than one holiday in a year it is always because our parents have either paid for them as they want the company or we have split an Airbnb with friends for a UK weekend. Last year was the first time we had paid for all of our holiday due to bonus and was the third time my DC has been abroad my eldest is nearly 17. We now are saving as we have a bright DS who is definitely going to uni but we will like millionaires get the lowest maintenance help due to means tested. Why are we accepting of uni being out of reach for most, the social contract of being rewarded when you work and study hard has died a death. My DH is at director level in a London Architecture practice, I work and have trained for a career in privacy/data security, it absolutely ridiculous that our spending power is so reduced. What is the impact on the rest of the economy and people's livelihoods if we are all being frugal?

Birth rates are super low & one reason is finances but people don’t seem to understand the financial implications of an aging population

"It’s fine for people on £25k to say oh look whst I could do with an extra £50k. Yes if you continued in your current life style that would go a long way. Move to a bigger house in a better area, more middle class school and that extra 25k (after tax) would be gone in a heartbeat."

So the people on 50k could move, change school, cut back to live a lifestyle of someone earning half what they do and then they'd be living within their means and have more spare cash.

If I can have a phone for a £10 a month, why would I suddenly ly.need a phone for £50?
If I can manage with Disney+ for £10 a month, why would I suddenly jump to sky for £100 a month?
If I can have a car loan that costs £50 a month, why would I suddenly ly.need to jump to a car for £300 a month?

Let.me put it this way.

If you've got £5000 and you burn it in a bin, you've no case for claiming poverty, you're just stupid.

Great post @harrietm87

I've just checked an online salary calculator.

Say you are a single parent earning £60k, two children below school age. Nursery is £2k a month (after tax free childcare is taken into account). That still sounds like a good income right?

Taking off tax and the childcare costs, that person would earn the same as someone on 24k.

Would you say that £24k is a good income to raise, feed and house an adult and two children on?

In the north, sure. Otherwise it's going to be a challenge.

Our household income is £100k and we don’t have huge disposable income. We actually had more when my DH was in the military and we received universal credit.

We take home around £5.8k a month after tax, student finance etc… We have a 3 bed semi in the West Midlands, mortgage is £1.5k per month, £2.2k on childcare for two under 4. Just those two things are basically 2/3 of our income. Then we’ve got bills, food, car insurance, children’s clubs etc… There isn’t much left at all. It certainly doesn’t go as far as I imaged when I was younger!

I mean it’s not that hard to imagine someone in the south east may be struggling on those wages, Mortgage, childcare, commenting costs, and for many of those people, no childcare help, no child benefit, may need wraparound to enable them to work either school or child minder after school. It all adds up pretty quickly.

Perhaps its cos i don't have children so i don't relate to this as much. but i go to a synagogue in a fancy area (cos its quite big and i did my conversion there) and live in quite a 'middle class' area in nw london where a terraced house is £1.4 million (i live in a 400k flat though). I meet lots of people with good jobs and probably incomes but I don't feel like the majority are super different from me. They generally have more help with property (know 3 people with gifted houses though that often has to do with grandparents being lucky rather than genuine wealth) so they have larger houses but their lives are not massively extravagant either!

Most people don't care where you live or how you dress tbh. what would be more awkward is far right political views.

Oh my.😂