To have expected more in life from working to reach this salary?

[grethrow]

I’m early forties and earn 75k. I know this isn’t huge money but it’s well above average salaries in the uk. I worked hard to get to this point (I’m not saying people who earn less don’t work hard).

I guess along the way I always thought I would be able to have a really comfortable life on this salary. I have one ds who is 11 but his costs don’t really factor in much as his dad pays for most stuff (ds lives with me so dad pays a decent amount).

I assumed going on holiday would be easy but renting a cottage in Devon in a nice area for a week is around 1,500, then there’s travel costs and food etc when you’re there! Going abroad long haul is extortionate. I guess these things are just about doable for me but it’s not easy.

I am having a privileged whinge. I know that. But I do feel sometimes like maybe at 18 I shouldn’t have bothered. My parents had a similar income (taking into account inflation) and me and my brother both went to independent schools, grew up in a large home and parents had very nice cars. It wouldn’t be possible for me to go and buy a nice car outright. I know people have it much worse but I still feel cheated and like it is a slog for very little, fair of me to feel this? Do others feel this?

I transposed digits. It's even worse.

Your friend earns £9.6k per year, which at £11.44 NMW means she's working 840 hours.

With benefits added, your friend gets £23.8k per year net, which is £28.34 net for each hour she works. (not £23.84 as I wrote)

Whereas the £75k full time earner has £54k net per year, which is £29.35 for each hour she works, down to £27.02 per hour with student debt repayments (which your TA friend doesn't pay, because she earns 'too little')

Your TA friend - with her £1000 per month UC and child benefit and no student loans repayment - actually gets higher per-hour take home pay than the £75k worker.

That is beyond fucked up.

I agree. 'Having a right to something' just means that someone with the strength to enforce their will (the government) gives it to you. There's nothing intrinsic to 'rights'.

We've somehow got into the mindset in the UK that everyone is entitled to the same middle class lifestyle with holidays and nice things, no matter what they do, or how few hours they work.

Why do we think that? That's never been the case anywhere in the world at any time (Not sustainably, anyway. Unless the country has enormous natural wealth... and invests it... and limits immigration so that the investment return remains shared between a small population. So not the UK.)

Technical advances did improve productivity in countries like the UK enormously over the last 100 years, but it's not magic. Work still needs to be done in order for value to be created for people to consume. That hasn't changed.

If some people don't work (or work fewer hours, or in less productive jobs), the ones who do work get to keep less of the value they've created from their work.

If you make people hand over enough that the those who don't work - or work less - get as much 'nice stuff' as them, then (once they realise that) nobody wants to work.

So fewer and fewer people work. Everyone has a lower and lower standard of living, and eventually the whole ponzi scheme collapses.

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy"

Alexander Fraser Tytler

Loving all this economic philosophy today!

I do wonder whether what we are seeing now has been influenced by the time of furlough, when many people were paid to not work, so no value created. Are we seeing something of a rebalancing now?

Worth stressing that despite the higher interest rates then, property costs were lower in real terms than they are now. Which is the most important factor when we're discussing generational housing costs.

I get it, with overtime I make about 60k but I'm a single parent and I feel it just doesn't stretch at all. I know I'm very very privileged and that I can't complain but it frustrates me that I'm really not living a wild lifestyle but still run out of money

You must have some pretty high outgoings if your spending every penny of nearly 4k a month!

Op you can definitely get your budget down for food ect. I think you need to really look at your finances and write everything down as maybe you are spending more than you think.
Also you say 75k but what is your actual take home income after tax and NI ect.
As for grocery spend...meal planning is key. I used to spend £150 a week easy for me, my OH and adult DS. Once my DS moved out I thought oh great I can spend less but found I was still spending the same. We are now on a budget of £80 a week. Yesterday we went shopping and spent £65. 3 lots of meat for £10 to do 4/5 meals and using stuff up from the freezer to make up the rest.
If you want holidays ect you have to find the money you are wasting elsewhere

Yeah, I kind of fell on my feet here, interviewed for 1 job and was offered a better one

I think this is a bit of a red herring. You’ve latched onto the holiday thing because you personally go on very cheap holidays. The OPs point is that on £75k you wouldn’t expect to have to look for bargain holidays. You’d expect to be able to have a comfortable lifestyle with a few luxuries and not worry about money.

My parents (now 70) went to Japan, Hawaii, Australia, the US in their twenties at a time when air travel was relatively much more expensive than it is now. Yet they were in much lower paying occupations then DH and I who could never afford trips like that. And of course they had a bigger house, better cars etc.

My parents (now 70) went to Japan, Hawaii, Australia, the US in their twenties at a time when air travel was relatively much more expensive than it is now. Yet they were in much lower paying occupations then DH and I who could never afford trips like that. And of course they had a bigger house, better cars etc.

But they didn’t have all the modern things that would be considered essential now. Things like phones, prestige cars, all the household gadgetry we’ve come to take for granted, big screen tvs, Sky, tv screening services. Kids didn’t do multiple extra curricular activities, there weren’t 20 different baby classes to sign up to, clothes were more expensive but were made to last, no fast fashion that ends up more expensive. There weren’t the multitude of grooming services for people (eye brows, nails, fake tan, skin care), people went out to eat as a rare treat, a takeaway was an occasional thing, my parents would never have spent £4 on a coffee.

In a capitalist society there are a million new ways to part people with their money and dress it all up as essential. While many of these things aren’t hugely expensive in and of themselves, they each add up and lead to lifestyle creep. And folk think “I’m on £75k, I should be able to afford my nails done, eyebrows done, my DC to do 5 activities a week, why can’t I afford a £5k holiday”.

Of course house prices have a big influence on disposable income, but that’s not the OPs problem, it’s whatever happens with the £2k+ that’s left over each month.

I think it's partly furlough making a lot of people realise that work is now optional in this country. But I think it's mainly that the global economic downturn - made much deeper by the pandemic - and the huge inflation that followed has made most working people's standard of living drop substantially. That makes everyone look around and say 'hang on a second...'

I think we're unfortunately living through one of those 'interesting' times. I hope the government steers the country through it safely.

They had a Morgan and a Jag…. We have one Volvo. They had a much bigger house in a more expensive area that we could never afford.

No, some of the “gadgets” that exist now didn’t exist then but they had items that were considered the latest gadgets at the time - they were just different things then like a colour TV, the latest record player etc.

They didn’t have take aways but they did eat out and went to the pub regularly. We don’t go to the pub, we spend that money on things like take aways instead.

Lifestyles and the things people buy have changed but that doesn’t mean that people were living more frugal lives in the 80s.

It’s not just houses that are more expensive, it’s utility bills, food shopping, childcare, petrol and the fact that incomes are relatively much lower.

@Jellycatspyjamas my parents are also in their 70s, and when I was growing up we certainly had all the ‘new gadgets’ of the time, both had new cars every couple of years, multiple foreign holidays inc long haul, we had expensive hobbies and partook in multiple of them.

We all had our hair cut in a salon, both parents were a fan of the subbed, members of health clubs, my mum certainly got her nails done etc. We ate out in restaurants and had new clothes. I knew many families with sky tv.

And all of this was supported on one professional wage.

They also think your money goes less far - my dad’s equivalent in the same profession today wouldn’t be able to afford anything like it - the mortgage on the house alone be 15x their income.

People in the 80s had pretty materialistic lives - it wasn’t all coal fires and an annual coach trip.

My parents had very little, went nowhere, never ate out and saved all their money. Maybe thats why I think I am doing well in London on a similar salary to OP and with two DC.

I have no car by choice, forget a fancy one.

Well in the 80’s my next door neighbours had a brand new Mercedes and I can remember to the rush to buy VCRs and the first computers/games consoles (which were actually very expensive at the time). Friends and family would holiday abroad every year and almost all of my friends had a least one trip to the U.S. as a child. By the 90’s my best friends parents were taking her younger brother to the Caribbean or Florida every year first class.

And we definitely did extra curriculars. I danced five times a week and did Brownies and Guides. My brother, did football, rugby, cricket, Cubs and Scouts.

I grew up in a working class/lower middle class suburb of a Northern city.

I think the basic point is that, compared to those in the Boomer generation (their parents), money goes much less far than it used to for today's 20-50 year olds. That's a fact. The main increase in costs has been asset price inflation (housing costs) but it does apply to other essential costs too (energy, food). This is undeniable. Yes, the OP's salary is considerably above the average but it does not afford her the sort of lifestyle that her parents had for the same or less effort.

Apart from that, a greater and greater percentage of the population are reliant on benefits because wages have stagnated or fallen in real terms in the last 20 years, especially since the GFC. Those in higher tax brackets are paying more tax to subsidise those on lower incomes. These people often don't take these benefits into account when quoting their income.

Please tell me that is wrong

People in the 80s had pretty materialistic lives - it wasn’t all coal fires and an annual coach trip.

I think this quote shows utter privilege. Your parents were very wealthy and you expect to be just as wealthy by virtue of the fact you had wealthy parents. What percentage of the population was made up of materialistic yuppy types as opposed to the everyday working man?

In the early 80s I had one friend in junior school who went to Spain once on a plane. Literally nobody else went abroad. There were two cars on the close where I lived and both were mobility vehicles. Your experience is not at all typical of an 80s upbringing.

People who complain that they can’t continue to live the lifestyle they grew up with always fail to grasp that they were exceptionally lucky and extremely unusual to have that upbringing and those experiences in the first place.

Even today, most people won’t inherit from their parents, and if they do it’s not going to be enough to pay off the mortgage like everyone on MN seems to feel they’re entitled to. Not everyone has rich parents.

@Anonym00se I expect to have a similar quality of life to my parents because my income is not only equivalent to, but far higher than theirs, even accounting for inflation.

I had a privileged upbringing. To afford the same quality of life today is vastly more difficult to achieve. My parents were not extremely wealthy - middle class and a professional income. A professional in the same job as my dad today couldn’t afford anything like the lifestyle we had - even just affording the house we lived in would be totally out of reach.

It’s not about ‘entitlement’, it’s about the current generation of young adults having a worse quality of life than their parents on a variety of measures. That is well documented.

Every generation has their ‘luxuries’, and just because you didn’t have eg streaming services, doesn’t mean there wasn’t an equivalent expense of the time.

The decrease in living standards is not because people are buying coffees - it’s because wages have stagnated while prices have increased, and most importantly asset prices (ie housing).

I went abroad once as a child in the 80’s but I was definitely an outlier amongst the kids I went to school with (at a Northern comp). Most of my friends travelled abroad at least once a year.

Worth stressing that despite the higher interest rates then, property costs were lower in real terms than they are now. Which is the most important factor when we're discussing generational housing costs

I got curious at this, after someone mentioned earlier that you do need to include interest paid as part of the total cost of buying a house. The unfairness in housing between generations is certainly a trope...but when you do the numbers, it turns out that's wrong.

Average house price 1980: £19,273
Average salary: £6000
Multiple of salary: 3.2

Average housecprice 2010: £167,500
Average salary: £25,890
Multiple of salary: 6.4

BUT, the total price you end up paying for the house depends on the interest on your mortgage over it's lifetime (weighted to the early years)

Here's a list of how many times the original price of the mortgage you pay over a 25 year repayment mortgage at different interest rates:
0.5% -> 1.05 times
4% -> 1.58 times
6% -> 1.93 times
12% -> 3.15 times

The 80s averaged about 12%
The 90s averaged about 6%
The 2000s averaged about 4%
The 2010s averaged about 0.5%
2 years ago, it went back up to 6%, and will probably stay about there

https://www.mortgagestrategy.co.uk/analysis/historical-interest-rates-uk/

So you can see that someone who bought in 1980 got a house valued at 3.2 times salary, but ended up paying roughly 8 times salary for it in total.

Someone who bought a house in 2010 got a house valued at 6.4 times salary, but die to lowervinterest rates will end up paying roughly 10 times salary for it, less if interest goes down to 4-5% in a couple of years as predicted

Not very different.

(The picture is a bit worse for people buying a house in 2024 - average 7.7 times earnings - if we assume rates will stay at 6%. That would give a total cost of 15 times salary in 25 years. But it's likely that either rates will fall over the nextv25 years or house price multiplier will, bringing it closer to the same balance)

Every generation has their ‘luxuries’, and just because you didn’t have eg streaming services, doesn’t mean there wasn’t an equivalent expense of the time.

My point is that luxuries have become must haves. Yes there were equivalent expenses but they were acknowledged as “nice to have” rather than can’t live without. We didn’t have a tv for a good part of my childhood - we couldn’t afford it. There was no suggestion of being deprived, or needing entertainment, we couldn’t afford it and that was that. Our car was a company car that came with my dad’s job, otherwise we wouldn’t have had one. Holidays were a week in a caravan owned by my dads boss. I was far from out of the ordinary in my social circle. The idea of a foreign holiday wouldn’t have been in reach of most of my friends.

House prices are an issue, but there would be a national outcry if hour or your parents house lots half its value overnight to allow others to get onto the market.

Your own numbers have proved that I'm right. The 1980 purchaser is paying less in real terms than the 2010 purchaser, who in turn is paying less than the 2024 purchaser.

Sure, things might change in the future. In which case, it'll stop being true then. It's true in 2024. It is more expensive to buy a home in real terms.

@Jellycatspyjamas in 1980 17.5m brits travelled abroad on holiday - so about a third of the population.

You are using your childhood as the definition of the norm - someone earning an equivalent wage to their parent in 2024 shouldn’t expect a far lower quality of life than in 1984, 1994, or 2004!

@strawberrybubblegum what your calculations ignore is that today’s buyer can’t actually buy the 1980 house at all, because it might be 15x+ their income in 2024. So they have to have a smaller home, or rent.