To not understand how people fund their lives and feel a bit jealous?

[Travelenthusiast]

Just that really. Mid-30s and we have what I have always seen as a healthy income of £180k per annum (obviously been lower when we were younger and increased over time), and had some family help - about £50k to buy our first house several years ago.

And i’m not complaining about our quality of life- I know we are lucky and can afford a good holiday every year, and a more expensive/ luxury holiday occasionally. DS does a few extra-curricular activities, we don’t have to worry about the food shop total (we aren't extravagant at all) and can afford to eat out a few times a month etc. And I know we are lucky as I grew up in a poor family and understand the stress and implications.

But we have a very modest 3-bed house (with a big mortgage), our car is ten years old and there’s no way we could replace it, we can rarely afford to replace clothes and shoes for us (of course do for DS), days out are thought through to reduce cost, would make pack lunches to take into work and don’t buy shop coffees, we could not afford private school, and often we cut out the eating out to add to savings instead- basically £ is not abundant. And we are relatively careful financially and not big spenders generally. None of this is me saying our life is bad- I know we are really luckily, but just trying to give an idea of limitations / life.

We do live in SE commuter belt (not london) where everything is very expensive.

But we are surrounded by families who have so much more, so apparently effortlessly. We are genuinely one of the only local families without a 4x4 (i know cry me a river 🤣). How do others have it all and have the big house, the new car, endless holidays, SAHM often, the new clothes, meals out, lots of savings? Is it simply that they earn much more? I know we are lucky but I just don’t understand how so many can be so wealthy? Could most of our network really have a household income over £200k?!

Oh don’t leave! I’m so intrigued!!

What is it you feel you are missing out on? What do other people have that you don’t?

None of my posts were about me or my lifestyle, despite your personal insults.

And? I don’t understand you point. I’ve expressed myself perfectly clearly and set out how these distortions create perverse incentives at every earnings level. This particular thread is (as often happens) multiple people attacking the OP because she had the audacity to note that everyone in the UK is getting poorer including higher earners who are taxed so heavily that they have nothing like the lifestyle that their salary on paper might indicate would be expected. Posters like you seem unable/ unwilling to comprehend this, even when it’s explained with numbers, and it’s tiresome attempting to speak to irrational people who seem to have a hatred of anybody who isn’t exactly like them. I also pointed out how similar cliff-edges affect lower earners, specifically those who receive Universal Credit, due to the the taper rate being too high. Did you actually read my posts before venting your outrage? It appears not.

Ultimately, while there is a significant proportion of the electorate who think like you and vote for these idiotic policies whereby they think attacking the most vulnerable and disabled like your little friend here, and impoverishing/ resenting the meagre support for disabled children is the answer, and simultaneously think taking higher earners marginal tax rates exceeding 100% in some cases is the answer, everyone in the UK will continue to get poorer. It’s exactly the kind of mentality - searching for scapegoats rather than engaging with evidence, facts and rational debate - that leads to the idiocy of hate for immigrants, Brexit and all of the other nonsense which has hastened the UK’s economic decline in recent years. If you wish to continue to get poorer in perpetuity then carry on as you are and that will be the result.

All that would happen then is that they’d get slightly less universal credit towards their rent, because their rent cost would be lower. In fact, their “rent allowance” from universal credit would be likely to have less of a shortfall compared to what they actually have to pay than they would in London. Their childcare cost might be slightly reduced, however they only pay 15% of it anyway because universal credit will pay the rest, so overall they would likely be even better off comparatives because the other aspects of their earnings, tax, national insurance, child benefit receipts and universal credit remain exactly the same and don’t take into account the differential cost of living in different areas.

Ironically, I provided the example of a couple living in London because it would be the most extreme, with the highest costs, to show that with two children and average housing costs even in that case a couple on minimum wage who are renting would be better off than a lone parent earning £180,000. The point of that specific example seems to have sailed about a mile over your head.

InPraiseOfIdleness - Okay how would you change things then? Would you keep minimum wage? Reduce or increase the earnings threshold before you pay tax? Make child benefit universal? Increase or decrease business rates? Scrap the triple pensions lock? How would you fix things?

I am genuinely interested.

I understood the reason for picking London as the example but the problem is people see a case whereby a low earning family get over £2k a month in UC and then apply that to all low earners. You can understand the nuances but not everyone can.

I see it time and time again on here where people mention 'top ups' with no actual calculations, just a notion that everyone gets them. It is perhaps not a fair comparison but it reminds me of the posters who say everyone who gets PIP doesn't work, despite it being something that many people in full time work can claim.

Well I'm 41, 3 kids (2 ND) Statutory homeless, made redundant after 20 years in my job last year...so if you wanna feel better about yourself and your life, i dare you to live mine for just a couple days SMDH

Hi Roses. This is a good point (and, indeed part of the point I was trying to make: single people and especially single parents are enormously disadvantaged by our tax system in an egregious manner and this needs addressing. It also makes it impossible to judge how much disposable income a household might have based on a gross earnings figure).

I’ve rerun the numbers based on a couple earning £90k each. Their net pay after tax, student loans and 15% pension contribution (so on an equivalent basis to my original examples) would be £4,085 each so a total of £8,170 compared to the lone parent’s £6,549 i.e. they have an additional £1,621 per month.

This is obviously hugely unfair on the lone parent trying to do the work of two people, to be also taxed more on the same household income and is something that our tax system needs to address urgently.

The couple each earning £90k would still have no child benefit, but would benefit from the reduction in childcare costs reducing their childcare cost by approximately £1200 per month with funded hours and tax-free childcare. Overall, this makes them around £600 per month better off after tax, childcare and housing costs than the couple each earning minimum wage and living in rented accommodation of equivalent size (both in London so that costs are equivalent. If the couple on minimum wage lived in a cheaper area of the country there would be an even smaller difference in net income).

It’s not much of a reward for such stressful jobs, working hard for promotions, all of that studying etc, the risk of a mortgage etc.

Later in life when childcare costs go down a bit the higher earning couple will benefit. But I think these calculations highlight very clearly why it is a nonsense for people to state that someone must be rich because they are X amount. The UK system is one of the most redistributive in the world and the taxes on higher earners are some of the very highest in the world. Making certain public services means tested has caused immense economic harm by creating these cliff-edges and the Chancellor’s first priority should be removing them due to the strangulation of economic growth and social mobility that they create.

I would:

1. Reform the tax system so that taxes are levied on a household unit basis like in pretty much every other developed country, reduce the universal credit taper rate to 40%, and make child benefit and childcare funding universal again. These measures would increase economic growth, increase overall tax revenue and reduce skills shortages. I would also strengthen our rules around transfer pricing to ensure that it is more difficult for companies to transfer revenues from UK sales to other lower tax jurisdictions. Implement ID cards to stamp out the black economy and tax evasion so that it is illegal for transactions to take place without a registered tax number being provided.

2. Replace the NHS with the kind of model used in France of Germany. For a very similar percentage of GDP these services have far superior outcomes and patient care. Subsume social care into the NHS service and raise income tax to fund this (the growth generated by 1) would be sufficient to do this in time.

3. Reform the UK’s energy pricing model so that it is not based on the price of Gas. Uncapped energy costs for businesses that are not at all representative of production costs are driving inflation and reducing output across the economy.

4. Reduce the focus on achieving net zero in a short timespan and redirect some of the money being spent on that to climate mitigation measures such as increased flood defences and investment into carbon capture technology. Implement proper strategies for food security, water security e.g. building more reservoirs. It’s utter negligence not to have done this.

5. Implement a proper industrial strategy with Government-backed loans for startup businesses, tax breaks for small businesses, investment into key technologies and areas where the UK already has significant strengths e.g. pharmaceuticals, tech, the arts, defence. Create business clusters. Strength rules to prevent large businesses being able to take over challenger startups. Have a unified source of compliance/ export support for small businesses in different sectors that could manage this administration for them to make it more viable for them to export if lacking internal expertise or resources to navigate the system.

6. Deal with the UK’s self-imposed trade barriers that are costing us 4% GDP per year and compounding. As a minimum, rejoin the single market and customs union as a matter of urgency.

7. Total reform of the dire UK education system. Half class sizes over time - education must be the number one focus of our public spending if this country is going to have any future. Far fewer people should go to university, perhaps 15-20%. This should be funded by grants not loans as it benefits everyone. Re-establish technical colleges with strong links to businesses and meaningful apprenticeships leading to qualifications and proper career routes similar to the system in Germany. Give children more options to focus on their specific talents/ interests with schools specialising in different areas while still doing core subjects from age 15 onwards. Implement a proper regulator to replace OFSTED which prosecutes Local Authorities itself for illegal behaviour rather than leaving it to individual parents to enforce the law through tribunals, and levies fines of sufficient magnitude on Local Authorities to disincentive illegal behaviour denying children access to education. Establish sufficient schools places for children with different needs so that all can learn properly. Make adult learning and retraining available again and highly subsidised if not free.

8. Reform our pension system, which is simply unsustainable as it stands. Australia had similar problems and dealt with them a couple of decades ago. We should gradually move towards something more comparable to their system for state pensions which is fiscally sustainable. We also need to address the public sector pensions which are held off balance sheet (!) and literally unpayable, with liabilities running into trillions of pounds with an ageing population and declining birth rates. Some realism about what is realistically payable will have to be accepted although many will find this unpalatable.

9. On housing I would make it much easier for people to purchase a plot of land and self-build, with Government security making it viable for mortgage lenders to lend on such projects and implement simple planning procedures for self-building and make VAT reclaimable on the building materials/ costs for the individual who is building a property to inhabit as their main residence. This would make housing cheaper because the profits of the big building companies would be removed (approximately 20% of the cost of new builds) and would hugely improve build quality.

All of this is possible and affordable in an economy if you put a rational tax system and industrial strategy in place that will create growth. Not a chance of that happening in the UK though.

I forgot for point 1), also of course the need to remove the withdrawal of the personal allowance. I also think that (like in France and many other countries) there should be an additional tax-free allowance added for each child in a household unit. Again, this will increase economic participation, increase growth, lower the welfare bill, and decrease child poverty and reduce the gender paygap and poverty of women later in life so will more than pay for itself.

I suppose my frustration is really that economic debate becomes entangled with polarised politics and therefore people adopt ever more extreme positions and become so entrenched because of their (understandable) anger at their own living standards declining that they are susceptible to politicians who are selling them fake solutions with slogans that don’t stand up to the slightest economic scrutiny. Turning the UK economy around requires an integrated programme of change with clear policy objectives like I’ve set out in my vision of how it could be achieved, with some measures that would cut unaffordable expenditure, some measures that would cost money but in vital areas where the return on that money would be many times what we spend, and most importantly measures that will increase economic growth.

Nobody minds if their tax goes up 3% if their real-terms income has gone up 10%. The first priority therefore has to be generating growth, creating the conditions where that will happen. All political parties in the UK claim this is what they want to do yet not one has even proposed the very obvious measures that would achieve this despite multiple economists having made it crystal clear to them the first steps that are required in order to do so. Reeves said pre-election that growth was her main priority, yet she has taken measures instead that obviously would have the opposite effect. It’s very disappointing as I thought with her background she might do far better, but sadly yet again we seem to have a Government captured by ideology (just like the last lot) rather than having the integrity to make decisions based on economic reality and what will actually benefit the people who live in the UK.

I wish the population would question why this is the case. These people who claim to be acting in their interests are not doing so. They are trying to create electoral advantage and stay in power by polarising opinion and creating social division, which again undermines any opportunity for growth. A disintegrating society full of resentment and hate and no concept of collective good and social conscience is never going to result in any outcome other than decline and never has, anywhere in the world at any point in history.

The only way out of this situation would be for people to be objective, take a step back, realise that everyone has been screwed over, and instead of taking that (justified) anger out on each other, press the politicians to implement evidence-based policies that will actually improve the situation.

I become more pessimistic daily that the UK population will actually do so, unfortunately, and so the decline continues.

I suspect you fritter it away, don’t invest .

If you earn almost 200k and can't afford new shoes then you really do need to take a long look at your outgoings!

@DustyMaiden and @WickWood I presume you have posted those ridiculous comments without having read the thread.

The level of economic illiteracy in the UK is so disturbing and is the primary reason why we are in this situation with perpetually declining living standards at all levels of earnings: clueless people keep voting for policies that will ensure the continuation of this because they can’t be bothered to do basic maths.

Well, we had this throughout the years. However, we only put airfare on credit cards for protection purposes but saved up for our holidays so the card was paid off same month. We took the stance that if we didn’t have the money for things, we didn’t buy/spend.

we have driven nice cars and bought only a few new - using car allowance when we had it. Thereafter always sold car to buy another, always 1 to 3 years old and didn’t keep them but 5 or 6 years, selling on before major services, before car troubles would start.

overpaid mortgage when we could.

always put money into various savings pots when we could - towards next car, towards next holiday, towards house repair fund etc.

Years down the road now, this has left us in a much, much better position now than our friends who were spending like there is no tomorrow. We are in track to retire in a few years without a mortgage, with savings / annuities/ pension to have a good monthly “income” and do some reasonable travelling once a year. Our friends are heaped in debt, had interest only mortgages, little savings etc.

don't begrudge playing the long game as you’ll eventually reap your rewards.

Oh come off it. If only one of them was earning the whole £180000 that would equate to just over £107,000 take home a year.

Thd vast majority of people csn only dream of that amount of money.

My take home (and I’m full time employed by a local authority) is less than £22000.

Give it a rest with ‘the big earners are SO POOR’

No. Only if they had no student loan (highly unlikely to get a job paying that with no degree) and were making no pension contribution at all (which would be hugely irresponsible). I provided all of these figures in my like-for-like comparisons. If we add a sensible pension contribution of 15% (far less than than made on behalf of most public sector workers which is generally in the 25%-30% range - and can you imagine the outrage if someone earning £180k got to retirement and hadn’t provided for their own pension?) and a student loan on plan 2 then their net pay per year is £78,593, or £6,459 as I stated in the examples that I provided.

Sorry, £6,459 per month. Then I factored in additional benefits (child benefit, additional funded hours of childcare, tax free childcare) for lower earners. I also provided a comparison to those renting and earning minimum wage who will receive universal credit, have most of their rent paid for them, and have 85% of their childcare funded for them. Given that the two largest outgoings by far for working parents with young children are housing and childcare costs, the fact that a two parent family have both of these costs almost fully funded by the state even though they have 48 hours per day to do what the lone parent is trying to do in only 24 hours means that the lone parent working full time has less money after tax, childcare and housing costs than the couple earning minimum wage. This is a fact.

It is so boring to go over this repeatedly. Our tax system and our entire economic system needs to be changed, and this can be done in a largely fiscally neutral manner on a gradual basis which will then enable rising living standards in the UK again, for all of us and our children.

If people don’t vote for such policies, or pressure politicians to even propose them (there’s not been anybody to vote for in the last 4 or 5 elections who has a sensible manifesto - all totally politically motivated and devoid of any economic reality) then nothing will change, and UK living standards will continue to decline, and any talented/ ambitious young people will continue to leave making the situation progressively worse.

I don’t understand why anybody would want or continue to vote for policies which will hasten such an outcome, as all policies proposed by all political parties in the UK currently will do.

You've already been told by myself and other posters on household incomes 30-35k that we don't get any "top ups" except child benefit (you know it's only 25 pounds right?).

You're so hell bent on your narrative that a household with 180k income is worse off than a household on 30k income it's actually laughable.
And like I said it's not just rich people who have mortgages I've also got a mortgage to pay and benefits do not help out with mortgages. You haven't addressed this though probably too busy deliberately misinterpreting my comments to claim I hate and resent disabled people and rich people it's actually irritating which I'm sure is your intention.

But if you seriously think anything I've said is "attacking disabled people" feel free to report my comments and I'm sure they'll be deleted

And then pension is for them in later life and is a choice. They won’t be scrabbling around on a pittance when they retire.

No one is buying this.

Also, I have a student loan, which I have to pay.. 2. And I don’t get childcare costs. Maximum additional benefits I would receive if I claimed them would be less than £800 pcm. Which would bring me to around £2700 pcm. (Not including the student loan I have to pay)

It doesnt even come CLOSE to someone earring £180000.

@Samslaundry here, again, are some direct quotes from posts you made about disabled people and disabled children in particular, which had nothing to do with this thread and nothing to do with the numbers that I posted because, again, no disability allowances for disabled children or adults or non-working parents were included in my calculations at all, and the main post had nothing to do with disabilities, so it was very strange that you went off on these rants about disabled children when they had nothing to do with either the OP’s post or the numbers that I’d provided. I think perhaps someone’s been reading a little too much Daily Mail or Daily Express to be able to have a rational and objective view of the economic facts and I am bemused why you continue to keep bringing this up when nothing in any post I’ve seen on this thread other than your own said anything about disabled people. It’s very unpleasant for you to have made such comments and I think you should apologise because people who are disabled or who have disabled children may well be reading this and you made these totally irrelevant attack on vulnerable people for no reason whatsoever.

You keep saying that people have made comments about your personal situation but I’ve read back through the thread and can’t see any at all. You are the one who took comments about economic policies personally and said that examples provided were “horse shit” alongside many other instances of swearing, personal attacks and unpleasant language, simply because the situations being discussed for comparative purposes weren’t identical to your own. I can’t see where anybody has attacked you for your personal situation or told you that you’re better off than other people who earn more, though you’ve claimed this in several comments. I may well have missed this in the thread as it’s now rather long.

Can you repost the comment where somebody told you that you personally are better off than somebody earning significantly more than you? If you do so - and it’s untrue - I’m quite happy to provide an analysis with actual numbers based on the tax and benefit rates to prove the case for you that you’re not better off than whatever posted you’re saying has claimed that you are despite them earning significantly more than you are.

There really is no need to be so rude and unpleasant to people as you have been, but no, I haven’t and won’t be reporting your posts as I think it’s better to leave the thread in tact so that people can see exactly what different posters have said and who has been reasonable and rational, or not.

Do you not understand this is the point I am making?

I don’t know your situation but the tax system is completely irrational and harms economic growth, lowers tax revenue and discourages work and therefore makes everyone poorer.

Student loans should not exist. Lone parents shouldn’t be being taxed more than another household unit with the same income. It makes no sense for taxes to be levied on an individual basis and benefits to be administered on a household basis and creates huge economic distortions.

I don’t know your personal financial circumstances and have made no comment about them and am not in a position to do so because I don’t have sufficient information. You are quoting numbers about net income but without knowing how much of housing or childcare is funded also no meaningful comparison would take place. £2,700 net income with barely any housing costs or childcare to pay would be a very different situation to those being largely funded for you. Headline gross earnings, or even post-tax and NI and pension earnings, do not provide a basis for meaningful comparison unless essential housing and childcare costs (without which work could not happen) are also factored in leaving the “real” net income figure of disposable income that people have to cover their other living costs.

In some cases, yes, someone earning a far higher gross salary will as I have shown end up with a lower income than people earning minimum wages because of these distortions. I didn’t say that was the case in every possible circumstance. The situation disadvantages single people and lone parents in particular. If you’re a lower earner and a single parent you’re screwed over just as the higher earning single parent is. I can’t provide an example for every possible circumstance that exists, especially without knowing people’s individual details. The point is that for there to be economic growth, incentive to work more, and therefore higher tax revenues and better funding of services huge reform of the tax system is essential so that 1) households with the same income are taxed the same amount and have the same subsidies; and 2) that when people do work more hours/ study more/ get promotions their net income after essential expenses rises by a sufficient amount that they are incentivised to do so, otherwise at all levels of earnings obviously they will not bother to do this.

The tax system we have in this country is regressive - you only need to peruse the ONS for the figures as to who pays yhd most tax relative to their income (and it isn’t people earning six figures plus) . But to argue that the system isn’t working for big earners is laughable.

But if we REALLY want to do something about our taxes perhaps we should be looking at the fact that the Uk is a tax haven for the Super Rich - the likes of Rishi Sunak getting away with pays almost nothing.

@Travelenthusiast on an international level we are so lucky , I’m very , very aware of this.
We seem to be outliers where we live though , absolutely zero help financially from parents/ family ( my ils could even take money off us given half a chance) , zero practical help, no one has even minded our 4 kids for 5 mins and they certainly have never wanted to. Fair enough , absolutely their choice🤷‍♀️
I mean you even mention you’ve had some help financially so have plenty others . We won’t get a penny in inheritance but I know plenty who have and will so that can be a big lump sum so helpful I guess…
I think loads of people have family wealth that they don’t talk about. We have friends revocating a huge barn in a very expensive part of the uk and they are both freelance but in very much hobby jobs, they are not bringing in much money and both are from extremely wealthy backgrounds, they never talk about where they are getting their money (and they absolutely don’t have to tell anyone ) but do allude to saving and that their recycling and upcycling is making savings for them to renovate , I mean 😂
They also don’t have a mortgage, it speaks of their privilege that they don’t seem to realise that everyone would know how much of a mortgage and money the project which I image will be in the region of 700k really once don’t entails !!! Lots of people have help and won’t say and them there are those who have deph , other people might live very frugally really and actually save.

Everybody needs to be contributing to a pension. Criticising people for doing this, which is basic responsibility, is crazy. I’m sure you’d be the first to criticise someone who’d been earning £180k per year if they got to state retirement age and had made no provision for themselves.

One of the main reasons our economy is screwed and all public services are trashed now is because so much money is being spent on the irresponsible generation who came before us - who despite knowing about the demographic shifts that were happening and living through the biggest economic boom in history - didn’t bother to save for their retirements, voted for tax cuts based on stripping national resources and now expect working-age people to fund early retirements, healthcare and social care for them rather than making provision for this during their working lives.

We need to direct public spending away from the elderly and towards the young and education and infrastructure. We have to address the state pension and public sector ponzi schemes as the “promises” they’ve made are literally unpayable. Meanwhile, we have declining birth rates due to such family-unfriendly tax policies which will exacerbate this situation even more. No Government wants to be the one to deal with the hot potato which is now hotter than the Sun so they all try to pass it on, but the longer this is left unaddressed the more painful it’s going to be when finally the large grey animal with the big ears and trunk has to be acknowledged.

Look at current UK Government spending. £314bn on welfare, 42% of which is the state pension, so that’s £132bn per year. £202bn on health 85% of which relates to the elderly so £172bn per year. Debt interest (that the generation in question ran up during the longest boom and period of peace in history by overspending on themselves) is now £105bn per year. That’s £409bn per year spent on this cohort. That doesn’t even include social care costs, btw, or public sector pensions. As well as Council tax, a further £87bn of Government funding goes to Local Councils the vast majority of which goes on social care for the elderly.

Meanwhile total education spending is only £94bn. Defence is £56bn. Science and technology is only £13bn. The whole justice department is £13bn and housing receives just £12bn.

It doesn’t take an economic genius to see where the problem lies and that the piranhas have and continue to bleed the country dry, so rather than attacking other working-aged people who are also working very hard to improve living standards for their own families and children and for the future of the UK, and driving them out of the workforce with penal tax rates or to move abroad to escape them, it might be more productive to engage with and support a programme of change redirecting public spending from the old to the young so that living standards can rise and this country has a future.