Meet the Henry- High Earner not rich yet

[Ontobetterthings]

This was a very interesting read about a man who earns 100k but struggling financially working in London. After doubling his wage to 100k with inflation costs he is only 6k better off a year.

https://www.cityam.com/100k-isnt-a-big-salary-and-we-need-to-talk-about-it/

I can believe 100k salary in London is a struggle. Aibu?

We moved. It only works because I commute only 1 day a week to London and my partner 2-3. I often worry I have severely limited my job prospects if I need to move from my current role. We try not to go in on the same day because trains are too unreliable and we can’t risk both being stranded in London and being unable to collect our son!

We spend £600 p month on travel.

I often wonder whether we should have stayed in London and put that money in a bigger mortgage.

There’s no doubt we live in a more pleasant environment by moving out.

I don’t think there’s any easy answers. For my partner, he’s had no doubts it was the right move, for me it’s more 50/50 and I have less certainty.

Big trade offs either way.

You managed to miss all the other context in the post - there’s limited (and possibly no) value to moving out and spending £1000 extra a month on travel.

You aren’t getting much more house, you’re spending far more time travelling, and you are £1k a month down on travel costs. How does a 8-6 nursery work if both parents are doing a 90 min commute twice a day?

‘just move out’ isn’t as simple as it sounds.

Yep agree with this. I’ve done everything “right” in life - child of single parent, grew up on benefits, made it to Oxbridge and got a first class degree, now work in a high paid job in the city (more than double what Henry is paid). Yet I live in a smaller house than the one I grew up in, in a fairly dodgy area (because the commute is short, so I can see my kids), kids are at state school and we can’t afford lavish holidays.

I don’t expect to live the life of a millionaire but I do feel that my kids should have a better lifestyle than I had as a child. And the fact is, other than I can afford to buy them new clothes rather than hand me downs, they don’t and they won’t.

Yes I am grateful for what I have, but as a top 1% earner I don’t think it’s unreasonable to expect a normal middle class (not luxury) lifestyle. The only way to have that in London now is if you have had massive handouts from mum and dad (which I will never have).

As a result I’m considering checking out completely and moving to a cheaper part of the country and working a lot less. I’m paying £100k a year in tax atm and if I and others like me stop doing that then the country is going to suffer.

Isn’t that the whole point though. At 35 and on £100k, it isn’t unreasonable or irrational to expect to be able to live in both a grotty flat (not even a nice one) AND eat lunch at itsu. (Which isn’t even good!). At that age and on that salary you don’t expect to be in a flatshare.
I earn a bit more than him but DH is a much higher earner which allowed me to cut to 4 days a week and put almost the max tax fax free into my pension to keep me at £100k taxable income.
if I was single and didn’t have children and earned what I do, I’d definitely be looking at Asia or the US.

not buying it and especially not buying the ‘everyone will leave’ thing.

In London have a bunch of friends on £80k+ and despite variations in circumstance (some single, some coupled with kids, some sole earner etc) every single one of them is having a perfectly nice time. We’re not all flying business class to Antigua constantly but we eat, drink, shop and live very happily.

Other friends are more £30-£50k and that is tough going. Manageable but tricky.

Also where do the people who used to rent the Croydon flats live if a guy on 100k (who is probably going to move the girlfriend in) is expected to live there.

If all the Henry's on 100k and their partners (men on that income level are more likely to get a girlfriend) all moved to places like Croydon that would just drive up the prices. My london suburb basically became gentrified when all the yuppies could no longer afford highgate and moved one station down. In the 50s it was apparently working class..now the houses are 1.3 million plus for a tiny terraced but as there are a lot of flats the flats are on average 450k (I paid 400k) which is affordable by london standards and why we were able to buy. A lot of high income or wealthy types don't think of the areas as a good place to rent or buy flats for which I am grateful (other than as buy to lets and that is dead in the water since osborne tax reforms).

They mainly buy houses here when their kids are of school age as it has good state schools and good access to hampstead/highgate for the private schools.

@cimena how many of the people you refer to live in nice houses because family have helped with a deposit? I’ve also got lots of friends in London on those salaries but they can only afford to “live very happily” thanks to family support.

Another thing I’d say is that often the very high paid jobs come with very high demands in terms of hours and availability expectations. Eg I regularly work until midnight and am expected to cancel holiday and work on holiday if required. If you are making those kind of sacrifices in your personal life and not seeing much “return” in terms of standard of living then you do start to question the point of it all.

100k is not as much as it sounds. However, majority of people have to live on less in the same location while working equally hard. It is a lot easier with a 100k salary than 45k salary.

People should afford basics with their salary, high earners should be able to afford luxury. It is messed up that you work full time and still have to live in a house share. Or move away and be miserable living somewhere you dont want to. Or pay insane commuting costs. But still 100k is more money for the basics than lower salary.

I am a HENRY and so are most of my friends. The scenario in the article is fictional but it accurately describes our experiences. We do spend a bit too much on brunch.

I think there are two points which are under discussed:

1. Timing: it's quite common (as in the article) to reach £100k via a couple of big promos near age 30 after you finish post-grad studies, qualify after your traineeship, etc. So you enter the expensive years of wedding, house deposits (could be £100k+ inc stamp duty in London), young kids, daycare but without much of a savings buffer - but people see your salary (that you just started earning) and judge you for not having masses in the bank yet.

2. Generational wealth. The social divide in my circle is increasingly along this line. I'm not talking Duke of Westminster levels, but the ability to contribute 5-figure sums to a house deposit goes a long way. I genuinely believe that the last few generations, where a single person not from wealth could join a professional middle-class occupation just by going to university and doing well, were a historical blip and we are returning to an age where family wealth means more. Even in my very well-paid City job, there is a divide between those who have funds to go on ski trips with each other, etc, and those who are still spending huge amounts on student loan repayments and the like.

Well, increasingly the ones who aren't insulated from the worst of the costs because of a higher earning partner, family help, SH or having bought a long time ago... don't. That's the problem. People who are actually fully exposed to 2025 London housing costs often can't afford to live there.

I'm up north, so its not really any skin off my nose. But it would worry me a great deal if I lived in London.

I assumed it was to explain how £100k lifestyle in London wasn't as lux as most people seem to assume. Did you read it?

Also age. Dh on 75k but did his masters in Europe where it was free and his undergrad fees was 3k per annum (one of the last cohorts). I had no student loan as an international student.

We were able to overpay 10k on the student loan while also overpaying 30k on the mortgage (on 400k flat) which will help with the daycare. So no student loans for either of us
Asian background so made money on the wedding due to cash gifts.

I still don't get how people afford 2 kids. We are one and done and dh even got a vasectomy cos we don't see how we can ever afford a second even if we got massive pay rises.

£500 every month on toiletries, clothes and a haircut? That's far higher than it needs to be unless they guy is buying new pairs of Nike Jordans every month. Many men in London don't even seem to wear proper suits these days!

Remember that if someone is spending £4 on a coffee every morning (which is a cheaper end of things for a take-away coffee in a city, that amounts to over £1,000 per year just on a coffee!! And many people buy more than one every day, and do so even on the weekend/when they are on holiday. Given the starting salary for many teachers and other public sector workers is under £30k per year (and the average salary for all workers isn't much higher) it's astonishing how many people fritter away money on things like a coffee or regular consumption of booze (which is way more expensive than coffee) and then complain that they don't have enough for rent or to save up for a house deposit.

Those kind of "per year" figures can be very useful to drive home to people just how costly these "little" expenditures are. It's particularly helpful to underscore to younger people just how much they are throwing away on things that they can easily either avoid, or can replace with far cheaper alternatives. Sadly it seems that "influencers" and the desire to "look rich" on social media are making this situation worse: people are spending money so they can take selfies showing them spending money.

The figures on normal household bills underscore the dramatic difference having flatmates/housemates can have. Sharing the electricity and water bills would immediately save a lot of money - bearing in mind that adding a person to a household (especially when everyone is out at work all day, and typically sharing appliances) will typically not double bills, but will immediately be a cost saving for anyone who is then only having to pay half the service chages. Council tax is a good example too: the single person discount certainly is not half the amount of the regular bill, so going half and half with a person on a full bill will be an immediate saving.

The housing prices have actually fallen 20% in real terms. Which is a good thing and I say that as a 2019 london flat buyer.

But people still can't afford the deposits, mortgage interest rate so they rent. And people want henry to move to Croydon with his 5500 disposable income to rent a 2 bed flat so god knows where the young families with 2 kids and no deposit on average salaries are going to live. I suppose they will just move up north but what happens to those on housing benefits in the north. Landlords will surely prefer to rent to 2 newly transferrred public sector workers than them.

I do believe that in part the rental crisis is caused because a lot of Henrys hold off from buying due to cost of stamp duty, leasehold and cladding issues, not wanting to commit to a share of freehold maisonette in zone 3/4 (which would be the alternative to newbuild leasehold), not being settled with a partner yet, wanting to keep the option of moving abroad open, higher interest rates mean return is better on investing than buying etc etc. They then rent and this drives up the price of rentals for everyone else.

Yes, it's about private rents as much as purchase price.

This is it. Apparently 100K salary now is equivalent to a 50K salary in the noughties.

Fiscal drag and inflation are a bitch. I'm seeing it directly in my own family - sister is a doctor in that bracket.The problem is, between the withdrawn allowances and the surplus tax, you don't see anything back. Realistically, you (at best) treading water until 120k after which the tax anomaly starts to smooth out again.
Obviously, if you have a family you will want to spend time with them. Which is why so many GPs are on 4 day weeks. Why work 6 days for less money in your bank account when you can do the same for four? Its not any different from people doing 16 hours on UC and not a minute more because their top-ups will be cut.

We need to reward hard work and ambition in this country. We don't. People in the top 5% should feel well off, but when you can't afford to buy a house or that second child because of nursery fees...you don't.

There's a similar theme on the small business side (and SMBs make up the majority of business in this country). The 90k threshold on turnover is ridiculously low and the paperwork complex enough to put off most owners. As a result, people will pause trading for a month, rather than go over it.

Rather than talk about diamond shoes, we need to talk about economic growth. Because, when NHS and social care costs increase (over 70s are the biggest service users and they are set to double), who is going to pay for it all?

Finally; yes house prices and energy costs are insane. We need to fix both of those things, but also find a way to increase the economy.

@Primrose86 the problem I’m seeing now among my 30-something friends is that the mortgage on a ‘family house’ in an ok area might be £4k+ a month (that would allow you to borrow about £700k).

I think a lot of people are quite disillusioned as a result - they’re being told they’re the super rich and hitting a 60% tax threshold… and even spending a massive sum on a mortgage can live in a very ordinary house (in London - and many commutable areas of the south east).

And then the nursery fees will be min. £2k per child on top of this.

I appreciate other people are worse off, but it’s bizarre the top 2-3% of earners are in this predicament.

Of course you can if you using it to be representative of a person in a real-life scenario and want the general public to understand or relate to all the given info.

You may want to do a bit of day to day budgeting to see what you are spending your money on. You may also want to try to maximise the methods available to lower your tax burden if you aren't doing so already. There are also ways to save significant amounts of money on childcare - doing a nanny-share for example can save alot. There are also employers who provide childcare benefits and even have childcare onsite.

Mortgage and student loan debts tend to be "good debt" in terms of credit ratings and value. You might want to consider the other things you spend money on: do you own a car(s)? Did you pay for them, or do you lease them? If you own them did you take out a loan? Sadly lots of people throw away vast amounts of money on new car loans and leases. A family member spends hundreds of pounds each month just so they can have the "newest" model of what is, frankly, a rather dull car. All of that money is thrown away - they never have any equity in the car. I buy preowned cars with warranties. Over the course of the last 5 years I've only "lost" around £3k-4k in value on my delightful car...whereas the family member has spent - and thrown away - £30k: the cost of a far nicer car than the one she has been leasing. The amounts of money that are spent every year on new/nearly new car loans and leases is extraordinary. Very few people buy their cars outright - indeed over 95% of purchases involve leasing/loans/finance of some sort - which means huge numbers of people are throwing away money on interest payments and lease payments - and getting no equity value whatsoever.

Yup which is why I have given up on second child and 3 bed house. Not worth moving to a larger flat either due to stamp duty. Will stay in 2 bed flat and invest in that 1 child.

Most family homes in commuter towns are more expensive than my 2 bed flat in z3 London and I would have to commute far longer. Also not much appreciation potential and possibly would endanger retirement. Also state schools in my area are quite good.

If i can't afford private school at any stage of my child's education ( even private secondary), there isn't that many advantages I see to salary increases. Of course now it helps with the 2k childcare fee but in the long term...

I don't have a car (live in zone 3). I bought at 26 with dh and my mortgage is 1282 for a 2 bed flat. Zero student loans (paid it off). If I had a second child I couldn't live there and would possibly have to upsize to a bigger house which would mean at least 2k more in mortgage costs plus another set of 2k childcare fees. I don't want to spend 5000 a year on rail fees either.

No thanks. I will be happy with what I have which is 2 bedrooms and a son.

I know someone young that lives and works in a nice part of London on less money than that, they have a nice lifestyle renting a decent flat, and still manage to save a bit for a house deposit.

Clearly earning a high salary doesn't mean that you're also good at managing money, resourceful or have cooking skills or any othrr practical skills or common sense.

I am a NHS doctor (consultant level). My partner works in the city. Both high earners. We have two children - the smallest is about to start nursery. This will increase our nursery costs to 4k a month. Our mortgage is around 5k a month for zone 3. We brought in Covid. We have a 10k old car brought outright.
Our mortgage rate has jumped through the roof. Nursery used to be £1200 a child when we were looking at starting a family. Living costs such as food and energy have gone up a lot.
We have zero disposable incomes after bills are paid and have had to resort to credit cards, especially while on maternity leave.

We resent being in the UK. We are told we are high earners but we have zero luxuries in ours life. No family help and are scraping by. What’s the point of working hard? We are taxed to the hilt (and public services are a mess) and we do not get any benefits in childcare which would help us immensely.

A lot of my doctor colleagues are part time as they cannot afford childcare so earn under 100k. There are lots of shifts in work but no one can do them. So clinics get cancelled etc.

We are looking to leave the UK. It’s not going to get any better. I understand everyone is struggling. But what’s the point of bettering so yourself if we are struggling so much?

Unfortunately that kind of salary is not considered very high anymore by London standards especially if you work in the City. Son’s friend is on £500,000 pa. Junior managers like my youngest son are earning £50,000