What do you think is a ‘good’ income these days for…

[Greenlp]

Two adults and one child?

I am constantly being told that our income is very good (from online sources, media etc, small talk with friends who don’t know our earnings but make general comments on income/standard of living). I feel like our income is not good enough for a good standard of living. We constantly have to cut back.

Exactly. The avg house price in London this year was £708,081. On 60k you can borrow 240k max. Clearly there is a disconnect to think 60k is livable in London unless people bought 20 years ago or live in a house share with 4 other people.

“Good standard” is different to “can afford private school”. The latter is more “very high standard”. So YABU.

I would say 35k is a good income, not sure how much that would be as income per month after tax and NI

As is usually the case with these posts, there's nothing wrong with your income. You are just living above your means.
Your £1k mortgage payment is perfectly reasonable and is 20% of your net income. It's the school fees that are making you poor.
I'm sorry but I refuse to accept that you could not possible move somewhere where there are better state schools.
Also intrigued about your housing situation. Only paying mortgage for 3 years and have £400k in equity? Did you have a lot of financial help to purchase it in the first place? Seems really unusual to have that much equity based on your salaries
We've been on the ladder for 20 years and don't have anything like that much in equity but then we haven't really had the massive increases so much where we live

Those on the median income have housing costs too. Many have childcare costs. Of course it isn’t pointless.

Yes of course it’s a good income. You are choosing to spend residual income on private school.

You've chosen to spend £1,700pm which you could spend on holidays, days out, posh clothes, a new car (or whatever else floats your boat) on private school fees. You could have your children educated for free, like most people, but you've chosen not to. Move to an area where the schools are better, spend £700pm on the extra mortgage payments and enjoy the leftover £1000 each month.

This! My home in London is now 8 times my salary……and I am on 150k! It isn’t a massive home, it’s just that this area of London is unaffordable now, unless you have generational wealth or are a banker/ in funds etc……..

Exactly this. 100k wouldn't even touch the sides of anything where I am.

This article gives more context to what is going on. The vast majority of people on higher than average income won't feel well off because wealth is concentrated in the hands of the very top percentages. But of course paying private school fees which significantly impact the disposable income of any household. https://theconversation.com/getting-shorter-and-going-hungrier-how-children-in-the-uk-live-today-238364

Not an especially good income.

@cardibach but lots of people don’t have housing costs or childcare costs which was my point.

@Redlettuce that calculator is really interesting, thanks for the link. Apparently we’re in the top 6% of the country. Which does surprise me a bit, but maybe that’s because MN seems to be full of people earning far far more. I think often MN isn’t very representative of real life.

We bought 5 years ago, a 2 bed flat for around 400k. On £121k combined which is £61k each. Our mortgage is 1282 which is less than 20% of take home. I think dh on 75k could fund our mortgage payments himself esp once his student loan is paid off in a few months on £4400 take home. No kids yet due to infertility.

That is tight. But the schooo fees are the issue. I am a single parent in London with a big mortgage. 3k is the minimum I feel able to live on without making serious cuts..

So if you look at the graph with the 7 centiles in the article above, technically your disposable income after housing is 4k which places you in around the top 7th centile in the UK at around 48k. But taking into account your schooling costs means your disposable income falls to around 28k putting you more in the top 25%. As the article explains it's only the very richest 6% of families, above the average middle 7th centile child, that wouldn't typically be worried about affording a family holiday.

400k is not the average cost for a home though, I would say that's incredibly low for London. I also imagine a 2 bed in London would be quite small, esp for a family. We are a married couple with no kids and a few pets and would really struggle in a 2 bed apt.

Kind of proves that it’s totally dependent on lifestyle and perspective

@Childfreecatlady 700k is an average though because some houses are multi millions. You can buy houses in London for less than that.

It's a decent area though. Families do live in our development including some young families with 2 children. The rent is 2k per month for a flat like ours! It's ridiculous

Not my block as we only have 3 floors but around the same kind of area and same layout. Our residents also own the freehold.

I found this property on the Rightmove Android app and wanted you to see it: https://www.rightmove.co.uk/properties/152693141

But my point is we do live in London and we don't live in a flatshare and we own our 2 bed and are saving 2k to 3500 per month (which we also use to overpay the mortgage). I guess we could get a bigger flat but given our infertility issues would prefer to wait and see as we don't need the space if we didn't have a child and would prefer to stay put.

Dh even thinks we could probably live here during the maternity/childcare years even though I do have pets in the second bedroom (baby could sleep in our room). We shall see what happens.

I am v risk averse and would want to be able to cover costs on one salary and have a buffer in addition. But at the same time, not sure how our living situation is unlivable.

I didn't say you couldn't I said that was the average, that's what average means, it takes into account outliers, like the cheaper homes and multimillion pound homes.

Either way, when the average house cost is almost 12 times the salary, it's not a good salary for that area.

Do you mean £60k total household income? Or each partner? Or for a single person with/ without kids?

that's what average means, it takes into account outliers, like the cheaper homes and multimillion pound homes.

And that’s exactly why it isn’t a good measure because there is so much variation. The median makes more sense & is about 500k I believe.

It entirely depends on your outgoings and lifestyle and what part of the country you live in.

Appreciating you want to do the best for your child, I honestly think saving the £20k a year for them for 10 years instead of spending it on school fees would given them a better start in life - nest egg for uni, buy a place, even start their own business etc. Alternatively have you looked into scholarships and bursaries?