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?

Sorry, what significant methods are there for a PAYE employee to "minimise their tax burden"? Outside of pension sacrifice, which involves locking away a lot of money during the period of time you most need cash, potentially for a single digit tax savings in the end, there's hardly anything.

Relatively few employers provide childcare onsite and if you don't currently work for one of them no luck. (At £100k+ level it's also relatively hard to "just change jobs".)

Student loan debt is real debt at this level, not an indefinite grad tax, and interest rates lately have been extremely high - many people I know have been trying to pay them off actively since they'll have to do it anyway, with extra payments on top of the several hundred a month mandatory ones.

Mortgages - well, let's just say I'm glad my housing costs are no longer inflation-linked, but even for a very modest 2-bed ex-council property with an hour commute to work we're paying over £3k and that's only by stretching the term as high as the bank would let us, which was above retirement age.

I agree with you about the cars though!

Really?! We have an income of 35k and shop at Ocado. Even taking away essential spends (housing, household bills, running a mid range car/travel costs) I can't believe you HAVE to shop at Aldi.

Where do you live and do you have dependent children?

I would be fascinated to see your monthly breakdown of incomes / expenses.

I currently have to earn £35,000 before tax exclusively to cover one nursery place.

Living in London while working in London is not sustainable. We knew it as far back as 2011. Our rent for 1-bed flat was 700/month in a commutable town north of London. Train tickets were ca. 450/month as we were both working out of town. We soon bought a 3-bed flat which we sold 10 years later with 150k profit and bought a house in a village. 100k mortgage left to pay. Both WFH since Covid while our salaries have risen by 60%. We could have never achieved what we have in financial terms if we lived in London. Living there is illogical. BTW we still managed 2 kids and yearly holidays abroad, but didn't splurge on luxuries (not our style).

I think the other thing that feeds into this is that (at the same time as inflation/cost of living decreases real income) the taxes people are paying are going into ever worsening public services.

I’m a socialist and would happily pay more for a great Scandinavian style public service. But the reality is we’re ending up paying more for less.

I can’t get an NHS dentist where I live, a standard GP appointment can take 7 weeks, education is getting worse, there are awful pot holes through the main road of the town I live in, poor regulation/privatisation means I’m paying eye watering (pun intended) rises for water rates while at the same time there’s not enough water for summer... it goes on and on. This all has a knock on effect on people’s standard of living.

I do support taxation, but it’s hard not to feel disillusioned sometimes.

So, not rich yet

But that looks like the goal, to consider himself rich. A lifestyle that is what he wants, and with markers that show him as wealthy within a sample of people. That has earnings at the heart of it, but (as in previous posts) location, family or single status, successful or smart outlay on property, and how that is paid for, working/non-working hours, career opportunities, and possibly even age, all have quite an impact.

The house prices in the home counties in 2011 could facilitate that. But when I was looking in 2019 a 2 bed terraced with the same square footage in a commuter town cost the same as my 2 bed z3 london flat with no access to the faith schools we would have been able to access living in London. Not to mention commuting costs and car costs and time.

@NameChangedForThis2025 I agree on the quality of public services.

It is also extremely galling to pay Scandinavian levels of tax and be actively excluded from benefits like childcare support.

I think the general public needs to stop thinking that 100k is a fantastic salary. According to HMRC a wealthy individual needs to be earning in excess of 200k.

www.gov.uk/government/publications/how-hmrc-collects-the-right-tax-from-wealthy-individuals/how-hmrc-collects-the-right-tax-from-wealthy-individuals

Imagine what it's like for those of us who earn 100k or less to support a whole family?

Read the article. It’s talking about how COL, NI and tax mean that going from £50k to £100k in salary mean the equivalent of a £6k pay rise because of marginal taxation rates etc.

South West and one child.

If you are only left with enough money to shop at Aldi on £180k wages (even after tax) then you are spending money on other things. Gym, holidays, dinners out etc. If someone has literally nothing left after working hard enough to earn those sort of wages something has gone seriously wrong.

@waryclam
Yup.... But the howls of protest at that approach would be off the scale.
In the south east elderly home owners say on housing assets of 300k and upwards and let's face it their kids or relatives would be taking to the streets if you suggested that their assets should be used to pay for care because

1. I've paid in all my life (like they're is a pot of money they are entitled to)
2. I've worked hard and I want to leave it to my kids/it's already been taxed.
3. What's the point on working hard, saving and paying for a house if the state is only going to take it all off you to provide a service when Gladys down the rd whose never worked a day will get it paid for.

Paying for a service (care) whether you pay for it after death or when your alive is not another tax. It's just paying for a service. And yes Gladys will get it free because we are a compassionate caring country who won't leave Gladys homeless or without care even if she may have made shit life choices No one/ no government will push through taxing assets equitably because there are huge vested interests with access to lower and influence....We are approaching French revolution era levels of inequality and wealth hording. Tinkering with taxation on earnings is pissing in the wind compared to the vast transfer of wealth and assets that has occured in the last 30 ys....I know it's a long read but Pickety was on to something...

@MidnightPatrol
We really aren't paying Scandinavian levels of tax
https://taxfoundation.org/blog/scandinavian-social-programs-taxes-2023/

Those of us earning over £100k are.

And it’s even worse if you’re losing out on 30 free hours and tax free childcare.

Depends who you mean by "we". Because most people aren't, but high earners absolutely are.

PP gets government subsidies that you don’t qualify for, @MidnightPatrol .

I always say it but it's incredible how these thick idiots get to earning six figures. Henry had £1500k a month spare at one point, but feels like he could never own a house anywhere in the UK? You can get two up-two downs, up north, for under £120k. As said, he spends as much on socialising as in Aldi. There's much lower paid workers with better budgeting and thinking skills. He needs to grab (not literally) the Aldi cleaner and she'll sort his life out for him, bless his cotton socks. Wasn't we told by Boris that we are all in it together? There's sections of society who need to get their heads around that they, to have to do without and budget. If they are struggling, there's many, sink-estate-bright-but-never-had-the-same-opportunities WC who'll swap with them and they'll be much more capable than poor Henry.

As soon as I saw the headline, I knew he’d have one huge cost be it childcare, a big-ish mortgage, or he’s living alone in one of the most expensive cities on earth. It is unusual for people in London that are his age and earning his salary to be living alone, so he needs to go back to house sharing. Ultimately if you don’t live within your means, you’re screwed, whatever your income.

Yeah that's more than £10k per month so suggests huge outgoings.

I know the early childcare years are expensive but they are also temporary.

The next ‘step up’ is huge isn’t it? 2 bed flat to 3 bed house is £££

Exactly. Assuming it doesn't go on care fees / any of our parents looking to piss all their money up the wall enjoying life (which we encourage them to do!), DH and I stand to inherit around GBP1m. Because of the way the different pots all work out, there will be very little if any inheritance tax paid on any of that.

We're very lucky and this is not something we are in any way counting on (and I try my best to tell my mother in particular to spend it on fast cars and holidays not horde it), but that's an insane advantage out of pure chance of birth. Of course I could independently decide to give it all to charity, but that's not human nature and of course I (with my own priorities) will use it for what I want to use it for. But the government should be working on levelling the playing field.

I am a high earning professional and so also work with other high earning professionals. The difference in actual wealth is amazing and it comes down to generational wealth. It's becoming more obvious actually as I get older because you see the clear differences in lifestyle for people you know are earning the same amount. It works both ways, I was often wondering how on earth some of my colleagues could afford the houses they had or the cars they drive until they happened to mention some family circumstance and I realize quite how much non-salary income they have. Then there are others who probably think the same about me.

The other big differentiating factor is how young you were when you met your partner (or if you never did / are divorced). There's a big difference depending on when people could afford to buy their first house, or what house they could buy then, which seems largely dependent on whether they were buying on one income or two.

I mean - that’s the point of the article isn’t it.

Someone earning £100k which is ‘rich’ and they should be living in a house share for affordability reasons?

If you don't think that a top 2% salary earner should be able to have that lifestyle (no flatmates, no lentils) - who do you think should?

People with generational wealth already? Since apparently we're excluding people who've earnt their own money...