What is your household income, how much is benefits, and how are you coping?

[Gabrilla]

Genuinely curious after so many threads on here about benefit changes. Please feel free to name change!

I’ll start:

Salaries for both of us total 90k. Only benefits are £102 month child benefit, though we also get tax-free childcare and 15hrs free at nursery.

Total income is about 6k a month, mortgage and bills 3k, nursery 1k, commuting costs £500, groceries cost £500, husband pays CMS and other bits to his children totalling about £500 leaving us about £500 for everything else.

Feels like we’re constantly penny-pinching.

That’s so true.

Wait until you hit 100k and then you get no personal allowance, no child benefit, no 30 hours funded nursery, no tax free childcare, no tax free interest allowance and to top it all off you pay a marginal rate of 60% income tax + NI + student loans meaning your effective marginal tax rate can easily be over 100%. You are literally paying to go to work at that point.

That's the real issue, so someone sitting in a mortgage free house worth 500k now but who has never earned over 30k thinks the neighbour who is renting on an income of 90k is loaded. And so many do not understand how tax works.

Yes, there are a few people on this thread who are on half my salary but whose household income is twice mine. UC does make work pay, but only for those who also receive UC. If you don't receive UC, then you earn less from working than many people who do and are considered wealthier than they are, to boot.

Tax bands have been frozen pulling far more people into higher tax which again people forget or don't understand.

"In 1991–92 just 3.5% of UK adults paid the 40% higher rate of income tax. By 2022–23 11% were paying higher rates, with that figure set to reach 14% by 2027–28. Of that 14%, 3.1% of adults will face marginal tax rates of either 45% or 60%"

"As a result, while in the 1990s essentially no nurses and just 5–6% of teachers paid higher-rate tax, income tax thresholds failing to keep up with average wages means that by 2027–28 more than one in eight nurses and one in four teachers are set to be higher-rate taxpayers"

I do understand where OP is coming from. My own household income is much higher than I ever thought it would be (though significantly ower than OP's, to be clear!) and yet I'm still scratching around for pennies at the end of the month. My mortgage is low – I live in a cheap area of the country, have a modest 3 bedroom semi and have 50% equity – but by the time I've added in the bills it's over £2k a month gone as soon as it hits my account, then add £700+ on groceries and it really doesn't leave a lot to play with.

So what is the solution?

I feel like I’m missing a trick.

I’m afraid for the children because surely this is just going to get worse? We can’t afford to prop up housing prices, low productivity and low wages with the benefits system forever?

😂😂😂I'm laughing my ass off here. My take home is £2k per month and I'm single. I still managed to save for a deposit on a house which I'm now in the middle of buying and my car is 15 years old. Absolutely laughable.

I have saved for holidays, but I will concede that my kids have grown up but £3k for nursery fees and a mortgage??! My Mortgage will £967 p/mth and I still have enough to enjoy life with. I would look to employ a nanny or find cheaper services if it's that expensive.

Is this a global issue? Are we facing a great international levelling?

Should we be taking our meagre equity and investing in Nigeria or somewhere?

I think I’d be ecstatic on 90k. That gives you choices.

£1100/ month
no benefits anymore which added £400 ish a month.

Commuting £300/month
really struggling.
mortgage and bills £700

We are on about the same OP. 3 kids. Live in the South. We get by just fine but do need to watch what we are spending and can’t afford some house renovations that need doing soon, or fancy holidays. 90k seems a massive amount of money but we don’t exactly live in the lap of luxury. DH and I both came from nothing and worked bloody hard for the jobs we have.

Lot of ridiculous posts about deleting your OP and being tone deaf. We are allowed to discuss our finances on an anonymous forum.

@Gabrilla You're not going to gain anything here.

All you're getting is a kind of competition about who earns what, jealousy over your income, and loads of comments about house prices across the UK.

How is this helping? It's not. It's all meaningless.

As a couple, your income isn't bad but it's not mega bucks either. Not when £500 a month is whizzing out the door for his other children.

If you feel angry and resentful all you can do is try to encourage him to change jobs and earn more, or do the same yourself.

In time things will get easier when you drop the nursery fees, when his kids are 18 and, with some effort, you might both earn more.

You might be better off posting in the money forum to ask for ideas on budgeting because there are bound to be some things you can cut or change.

A lot more people than you might think earn more than that.

I earn more than the PM and am nowhere near the top earners where I work.

The brutal levels of tax at the higher level does mean that the net financial position whilst good is probably not as much as you might think due to tax rates and loss of pretty much all other beneficial schemes.

For example, a single earner on 125k with nursery age children is no better off than a couple earning 38k each who also use nurseries.

Once salaries increase further you lose tax free personal allowance, 30 hours funded nursery, tax free childcare. You get a zero allowance for tax free interest on savings and eventually your pension tax relief is also removed.

All of these hit you one after another until you reach a point where you feel you might as well work less.

So what is the solution?

There isn't one. We already over more over 65s than under 15s and we know immigration isn't particularly popular!

I feel like I’m missing a trick

I’m afraid for the children because surely this is just going to get worse? We can’t afford to prop up housing prices, low productivity and low wages with the benefits system forever?

Dc will likely only get on the ladder through inheritance (although I think the gov will have to come for that in some form).

They haven't fixed the productivity puzzle in 17 years, low interest rates just masked a lot.

The thing is, I don’t even think that earning more would make much of a difference.

If I earned 100k, in order to not lose the tax free childcare and funded hours I’d need to salary sacrifice down to under it. At 99k I’d take home 2k more a month than I do currently. 24k a year. I’d have to be in London twice a week which would require a season ticket of £12,500, we’d lose CB of £1200 a year too so that leaves £10300. Id also realistically need to dress and look sharper so say £200 a month That leaves £600 a month. At least twice a week I’d be leaving before my daughter got up and getting home after bedtime so more childcare needed and / or DH would need to change his hours and work less to accommodate.

When I look back on my childhood, we were poor, but my mum didn’t work until I was 12. I had so much time with her to read, for her to attend assemblies, to walk to school and back.

It doesn’t feel like earning more is even worthwhile.

So we have gross income of £120k between us including child benefit.

Monthly of that 10k our big chunks we have to spend are:

Tax/NI 1,700
House cost. 1,500
Pension 1,300
Shopping 600
Utilities. 350
Car/transport costs 200
Childcare 150

So to me the above are really non discretionary but that leaves us about £50k a year that we can choose what to do with. We have about half that earmarked for regular monthly spending on cleaner/gardner, kids activities, entertainment, charity donations, new clothes, weekends away, theatre tickets and similar. The rest goes on a mix of longer term savings, holidays, home improvements and similar.

Our kids are a few years older now and between pay rises and their childcare going down we are definitely better off than when we paid full time nursery fees but we are not noticeably better off now than right before Covid when youngest had free hours and our joint income has gone up by close to £30k in that time. Cost of living is noticeable for everyone and I really feel for people who have seen costs go up while their salaries haven’t. Whatever you earn that’s hard.

@Spooky2000 my kids have grown up but £3k for nursery fees and a mortgage??! My Mortgage will £967 p/mth and I still have enough to enjoy life with. I would look to employ a nanny or find cheaper services if it's that expensive.

Nothing says you have zero awareness of the current economic climate more than thinking a mortgage and nursery bill totalling £3k is laughable and suggesting a NANNY to save money on childcare!!

I'm on about £1600 a month (net). All bills and food etc come from that. DH is technically self employed and earns about £4-5k a year, just trying to cover his costs and keep the car running, while working around DS.

£400 a month DLA for DS.
£102 a month Child Benefit.

So approx £30226/year

We have no rent or mortgage to pay, and I WFH so have no travel costs or we'd be struggling a lot more. As it is we end most months in our overdraft and DH often has to use his credit card to buy petrol.

We need to try and claim Carers Allowance, but want advice as DH tends to get paid in a lump sum irregularly and we've not had time to do that.

I feel like earning more can be very worth it long term but it’s a balance and it’s also ok to decide you’d rather live with a bit less money and a bit more time. In your kind of income bracket it’s probably good to review your budget and spending every now and again and stop spending on anything you are not getting good value out of.

DH is a sales director on £150k and I’m an accountant on £80k. Both in London so higher salaries than the norm. To be honest, neither of us add much value to society through our jobs, bar taxes.

Way outside of London!

I have 3 friends who all have nannie’s, it’s much cheaper than nursery.

Your DH probably needed to consider whether he could afford more children in addition to the ones he already had. A large family is a luxury and yes most people with 3+ children are watching the pennies a bit.

It's not a minimum wage salary. Minimum wage at 37.5 hours a week (not taking into account any pensions contributions) is around £1700 a month. My partner brings home £2200 a month after pension contributions. So not minimum wage at all.

I get it OP similar income (both public sector workers), our outgoings are slightly less so have more disposable but on paper £90k seems a lot and like we should be jetting off on foreign holidays twice a year, the reality is different.

To all those who think £45k per annum per person is pauper money and sneered at and should have more ambition to to increase their earnings…. Let’s see your stance when there aren’t
Teachers, police, nurses, care workers, social workers, physiotherapists … the vast majority of public sector workers because that’s literally the pay of the experienced members of those professions, which are usually in some form of banding which is capped and then they get the 2% or whatever the government decides that year.

Usually pay above is management posts, not frontline therefore a) limited posts and b) not everyone wants to do management (and we would be buggered if they did)