To feel poor even though we earn well?

[erte]

We live in London and have to for our jobs. Even though we earn what most people would consider a very good household income, maybe top 5% nationally, we still feel poor.

Yes we can afford rent but can’t afford much more than a one bed and save. Whereas if you told me 10 years ago how much I would earn, I’d have imagined a far more comfortable existence.

The same goes for children & childcare costs stop you saving so if you have young children while you rent your outgoings can be astronomical. So you wait.

People do wait though hence why the average age of a FTM has increased. But so has the age of a FTB.

I imagine it’s because the price of everything has massively increased since Covid

Yes it's not a life of unbridled luxury but affording entertainment and savings means you're not "poor". I don't think they're living hand to mouth. I'm in a similar situation and pay childcare costs but I feel much more fortunate than most people. Op doesn't mention having children.

But there are loads of people in London without generational wealth or high paying jobs

Probably not in your community

Ralph mctell streets of London

These threads always kick off.
but it doesn’t take away the fact that for most of us, the cost of living has increased.

many on these threads think that a salary of say £60k is untold riches compared to lower salaries: but it’s really not.

the tax is a complete fucker (especially in Scotland), and lower earners may recieve top up benefits. So, yeah, I can get why some feel resentment for it

Yeah I definitely don’t earn in the top 5% (but I also don’t live in London) but I agree that I thought my salary would get me more than it does. Our household salary is about 65k and we have no savings, no hope of buying a house until we inherit (which we hope won’t be for many years yet!) and I’m in my overdraft more often than I’d like to admit. I didn’t think I’d be rich in my career, but I also didn’t think it would be such a struggle.

I feel your pain and I’m sorry for the harsh comments. We live in SE London and on paper are on good salaries. 3 x childcare costs plus mortgage means that on thursday eve (before getting paid at midnight), I had £1.91 in my account. We’ve been abroad once since 2019. Annoyingly, even though DTs start school in sept, childminders are SO expensive, our childcare bill will go up now down!

I think this really demonstrates how rapidly the UK is regressing back into being an asset economy from the wage-based economy we’ve been for the last few generations. A lot of Millennials and Gen X were sold the vision of studying and working hard in order to get a good job, which would then lead to a comfortable and financially secure lifestyle. Our parents’ generation did things this way, and it turned out well for them, so we (and they) assumed that similar input on our end would equal similar output on the lifestyle end. This has turned out to be a false assumption. These days, it is increasingly the case that assets are more important than income when it comes to building real financial security. That is a bitter pill to swallow for those who have nothing but their own wage-earning potential to secure a financially stable and comfortable life for themselves and their children.

If anything, OPs like this should be sounding alarm bells for us all about what is coming on down the line for our children. Everyone whose primary source of wealth is wage-based—high earners and low earners alike—will be on the rubbish end of that shift toward an asset economy. This divide will only continue to get worse as time goes on.

Living in London is a complete money pit. Move somewhere cheaper and you will be surprised how much less money you will need. We did exactly that years ago. Bought an old cottage with land in Lincolnshire. Changed our careers completely and started our own business. We grew all our own vegetables and fruit, got hens. Had log burner stoves and cookers, had permission from a local land owner to remove old fallen trees which in effect gave us free heating and cooking. We started foraging for nuts, berries and mushrooms. Used to swap some of our produce with someone who used to go out shooting rabbits, pheasants and pigeons. All in all really enjoyed the challenge and couldn't believe how much money we saved.

Poverty is a terrible thing. Thoughts and prayers.

But there are loads of people in London without generational wealth or high paying jobs

Probably not in your community

I grew up in a similar community. A cheap, undesirable part of London popular with immigrants where my immigrant parents fit in. Parents working normal jobs, often just with one salary. You need a fantastic job &/or family money to afford to live there now. Demographic has completely changed!

Sounds lovely but not the lifestyle for everyone. Also sounds very frugal, in different ways.

Not everyone can move out and start their own business though? If everyone did that, you would be fucked!

You'll be shocked to hear how the bottom 10% feel and some of them live in London. You all still need someone in the city to be your carers and cleaners.

However if you're struggling to live and only rent a one bed property. I think perhaps rent caps and preventing foreign investors buying up property as a gold brick commodity would be a start.

How will it go up? Are you entitled to the tax free element? We're going to save a lot when DS goes to school even with after school clubs

These are good points.

Amongst my friend group from school, me and the only other woman to skip a stint in London definitely come off better in the lifestyle to earnings stakes.

I have tended to observe also that people who went to London for a few years think that they have a cachet of skills that just doesn't quite translate to local markets - "I had a 100k job in London dontchaknow, surely I'm worth 85k in Manchester" - not understanding that 70k in Manchester gets you an equivalent to 120k in London.

(I've made up numbers here, but you get my drift)

There's also a tendency to want/expect a certain amount to be "on" - and I get that you wouldn't go to London for a quiet life. But if running from paid event to paid event is your normal, then I guess it can seem expensive compared to someone used to doing otherwise. (For example, visiting friends in London for a weekend they wanted to pack the schedule with a £10 spin class - half my monthly gym membership - £50 brunch, £15 at the VA in the afternoon, a bar, a night out all in one day, all pre-booked.)

We live in midlands and aren’t higher rate tax payers but are on above average salaries. We have only recently felt able to breathe when our youngest started school as our child care costs have always been so high.

I think the points about generational wealth and career costs are on point.

Those who I know who are more comfortable have inherited or been gifted money from parents at some point.

Most people can't afford to live in London so they don't. There is life outside London you know.

Was just saying the same to DH. We’re both working, one child. Where we live, the restaurants & bars are packed, sell out gigs, shops are busy… Friends are all off on summer holidays, weekends away, sending the kids in expensive trips. Why aren’t we able to do any of the above? Can’t figure it out…

I do think the money must be coming from parents…

As a pp said, money just doesn’t go as far these days. We earn well, over £100k, but holidays are uk camping trips, eating out/takeaways are a rarity, I buy everything second hand, and we don’t even live in London! But we are lucky to have our own home and nice food on the table. However it’s not the luxurious lifestyle I think our salaries should afford us.

@erte We live in one of the suburbs of London, 25 minutes by train, lovely, lovely area and although not cheap, much cheaper than 'London' for sure.
I'm sure this is not you, but I sometimes come across people who are a bit snobby about moving out but then when I see how they live, the pace, the stress and the much smaller but more expensive housing, I pity them.

Just move further out. I suspect you might be able to get on the property ladder then and can start paying into your own future rather than throwing your money away on rent!

Most people can't afford to live in London so they don't. There is life outside London you know.

But some of us are born and bred and want to stay particularly if we are 2nd gen immigrants and have little family.