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?

If you mean me then yes we get Child Benefit although we pay more tax on earnings then we receive so it isn't an extra but instead is a decrease in tax paid. It comes in handy and the money is used on my child (last month most went on 2 upcoming school trips) but we wouldn't be going to a food bank without it.

We have never claimed free nursery hours although we would have been eligible.

FWIW as a low income family I don't want taxes raises for any PAYE worker. I would rather see the money we already have spent better.

OK henry is stupid and aldi cleaner is smart..

Henry literally pays for 60% of all tax revenue in this country. How smart would aldi cleaner be at budgeting if there was no nhs (have to pay for all healthcare), no state pension, no universal credit to top up her earnings. You need to earn 45k in order to pay more in tax than you consume. Henry would probably be fine without nhs services as he is young and hopefully healthy and most 100k jobs come with private healthcare.

Dh pays £400 for his medication every month (£300 to adjust his dose) and this year bupa has paid out around 15k in healthcare costs for him so far. He earns less than henry (though our mortgage for 2 bed flat in London is half Henry's rent) but am sure henry has similar medical coverage. The nhs waiting list was 3 years long and that is with the contribution of many HENRYs. Imagine if henrys opted out or moved away cos everyone called them dumb. How is aldi cleaner supposed to afford healthcare privately.

Nhs isn't free, it's paid for with the money from taxpayers and aldi cleaner's salary is 50% tax free. Henry pays 2k a month in tax which is more than what what aldi cleaner even takes home .

Hi Henry. Meet Ethel. (Earn Thirtyk Have Empathy Loss).

But Ethel's lifestyle is literally supported by Henry. Ethel can have a good life on a lower income by living in a cheaper area, being smart about her shopping etc but a lot of this relies on the fact she doesn't need to pay for healthcare.

This all falls apart if she has to pay for healthcare at some point in her life and there is no nhs. Heslfhcare is extremely expensive, if you need to pay for scans MRI etc. Bupa has paid out up to 30k in 1 year for dh (health insurance through work and earns less than henry). Poor Ethel is likely to end up dead or bankrupt.

Henrry would always have private health insurance for as long as he is working, jobs at that level almost always do..

The point is to get people like you and I clicking on the article, an article that isn’t that meaningful because they’re framing him as typical of his age and salary. The reality is that someone like him, who has to pay a ton of tax each month as well as chunky-sized student loan repayments, would be very likely sharing with his partner or housemates, paying much less on rent and utility bills than what he does now.

It’s always been expensive to live alone in London - 20 years ago rents were £1K a month for one bedder.

Also…would ETHEL be pleased to see the end of her child benefit, child tax credits, free nursery hours, and housing benefit? HENRY funds those in addition to the NHS.

No, I don’t think it would be typical for a 35 year old man on £100k a year to be living in a flat share for affordability reasons.

And as I said - that you think that’s a reasonable situation for someone at this income level is kind of the point of the article. He’s in the top 4% of earners, he should be comfortably able to buy or rent his own place.

People under 35 will have chunky student loan repayments for most of their careers - it’s crazy to think even high earners need to be living in flat shares to keep costs down (and I disagree that he can only afford a flat share by the way - it’s a fine income for a single man, if not delivering a lifestyle as good as one might expect).

You absolutely do not.

My HHI (married, one nursery aged kid) is £250k and shopping at Aldi/Lidl is material for us. We don't have to but we have significant debts that worry us a lot (mortgage, student loans, private student loans) and we want to save a material amount for our child/ren and retirement because we don't expect any kind of state support in future, as we expect more and more means-testing and limited state funds available.

This might be what PP means by "have to shop at Aldi". In theory these costs are discretionary but it will be expensive and/or risky in the long run to ignore them.

You'll all moan about "rich bankers who didn't bother to save for their own retirements" if we don't do the above...

Or her state pension. Henry probably can survive without the state pension because he will likely have accrued a decent workplace pension over his life time (even if not wow, his private pension will probably at least equal the state pension + pension credits). ETHEL probably needs the state pension to be able to ever stop working.

To be fair it could be my age (early 30s) but people I know on 30k don't have this and they don't have kids. It is the higher earners I know who have kids. I know a guy on 25k and he is single/ owns his 2 bed flat which he bought for 110k after many years of saving and also 2 years living with his mum (though she charged him an amount close to rent of a room). He is due to be mortgage free next year at 40 due to an inheritance from his grandparents (his father died prematurely and his father's share went to him).

Even so what he absolutely couldn't do without is nhs (esp in his later life) and also help with social care once the equity in his flat runs out (very easy if the flat is only worth around 100k). Right now the government will pay for that and that is ££££, care home space 70k per year even outside London! All this needs to be funded somehow and we are already struggling

On £180k or £250k, they literally don't have to shop at aldi. Absolute tone deaf bollocks to say so. It's also super snobby because Aldi is great.

Henry absolutely should be paying more tax to help support Ethel. I don't disagree. But people saying that Henry should just move up North so he can buy a house for 120k are missing the fact that that means Henry will take a big pay cut and be paying less tax. And the UK needs the tax he pays to support Ethel. Plus if lots of Henries identify an area where they can do that, and all start to do that house prices will sky rocket and Ethel won't be able to afford a house, and she'll complain.

If Ethel is going to be saying that a single man on 100k at 34 is 'rich' then Henry shouldn't have to be considering a house share in order to save decently or moving out of London to a low cost income area. Of course he's doing decently, but rich should mean able to buy a decent flat/house a decent distance from your workplace, not having to worry about budgeting for groceries and being able to save decently provided you don't spunk it all away on designer handbags and fast cars. 20 years ago someone in the equivalent of Henry's role may well have been 'rich' in those terms, but wages have stagnated (except for the very very top paying careers where they've gone crazy), expenses have sky rocketed, and the tax bandings haven't kept up.

I can't work out if we're meant to try to live below our means in the areas we can control day-to-day or not? Many people on high headline incomes have a lot of fixed costs, including tax, mortgage, student loans and nursery fees, which can't be changed on a whim and are the direct cost of earning the high salary in the first place. So are we only allowed to shop at Waitrose? But then you'll say we need to cut our cloth and stop whining...

And (I'll stop soon :) ) on top of all of the arguing and bad feelings between Henry and Ethel, we have BRI(I)AN (Bloody Rolling In (It) And Noiseless) who is super rich, has a lot of political influence, has everything tied up in tax avoidance schemes meaning he pays a far lower proportion of his income in taxes than Henry and even possibly Ethel.

Plus whatever we can come up for for someone sitting on substantial house equity that has come from house price increases, but decides that they're poor because their salary income is only at Ethel's level (coming up with BRIAN took it out of me for now).

I know quite a few single female henrys who buy in poor areas in east London as they grew up near there and think its perfectly fine and want a house with garden for cats/dogs. They can easily afford to borrow 400k to 500k from the bank.

This has meant that rents for a 2 bed flat in these previously cheap areas have now ballooned to a similar level as my leafy nw london suburb. Families are now living in rooms rather than flats in tat area now. People on 30k now have to live in flat shares in east London where the neighbouring room has a nhs dietician with her husband and baby. Presumably she can move to a cheaper place up north if she gets a transfer to a nhs hospital there.

What is happening to the northerners then, would landlords prefer to rent to a single mum with 3 kids and part time income supplemented by uc when they could rent to a couple on nhs salaries from abroad (many landlords nowadays like to rent to nhs staff from abroad as they have stable incomes and very unlikely to stop paying as this will affect their chance of getting ILR). This is probably how people become homeless in very cheap Northern towns.

Henry absolutely should be paying more tax to help support Ethel. I don't disagree. But people saying that Henry should just move up North so he can buy a house for 120k are missing the fact that that means Henry will take a big pay cut and be paying less tax. And the UK needs the tax he pays to support Ethel. Plus if lots of Henries identify an area where they can do that, and all start to do that house prices will sky rocket and Ethel won't be able to afford a house, and she'll complain.

Yes, speaking as someone whose household income is less than 100k and still lives a pretty nice lifestyle up north, actually it's very much in my interests that Henry and co stay exactly where they are, eat up the batshit housing costs and marginal tax rates.

If he were my friend, I'd tell him unless you really love London or are getting something out of it that you need and can't get elsewhere, get on your bike and look for work up here/do the job remotely. My loved ones deserve that advice. But actually, I wouldn't much like the consequences if enough of him did that and I suspect neither would a lot of the people suggesting it.

Of course you can shop where you like. But drop the faux we don't have any choices bollocks. You can shop where you like and barely feel the difference and you know it. Everyone has fixed costs.

Good point. This did happen to some desirable pockets outside of London when WFH happened and I recall that those local residents weren’t best pleased with the knock-on effects to their housing supplies.

I didn't say I didn't have a choice. I said that I feel the difference at the end of the month and it's material to my savings goals because after my fixed costs, I've got "hundreds" rather than "thousands" of discretionary spends.

My situation isn't comparable to someone who isn't saving at all for retirement/children's house deposits, and I'm certainly not pleading poverty - but then again, me and my children have increasingly closer to zero hope of ever accessing state support so I don't see these costs as optional.

Earlier in the thread everyone was falling over themselves to tell us to cook with beans and lentils more and we'd be grand... I thought you'd be pleased to know that we do indeed have Aldi beans in our pantry cupboards! And not a Chanel bag in sight!

I think they are called boomers. My MIL tells all her children she is poor as she earns 17k. She is a mortgage free owner of a 3 bed terraced house in z3 nw london. Of her children, only dh owns a small flat, the other 2 live with their in laws (abroad) and in their 30s. Youngest lives at home with no prospect of moving out.

They actually believe it too, my sister in law's fiancee told me oh she doesn't have much money. This is the same guy who has been on the social housing list in netherlands for 14 years and is living with his parents though he has a graduate role and is due to get married . He feels his job is highly paid. I don't want to tell him the truth cos the truth is too cruel. The problem is global.

If you've only got hundreds left on a £250k income, then you've made some rather silly choices. We're a high income household (though only about half of yours), and we manage to save and invest and chose which ever supermarket we fancy. Where's all your money going?

Was she not on £180k not £250k?

Probably the London mortgage - two child childcare horror of £4k a month on each childcare and mortgage.

£100k less tax = 5.5k a month
£80k less tax = £4.5 a month.

Less potentially £8k on childcare and mortgage.

Usually several people on these threads who have found themselves in this situation. Insane I know but not uncommon.

If ETHEL is a pensioner on a taxable income of 34k then she will receive winter fuel allowance. She may have a comfortable life and own her property outright. Henry may be paying a lot to rent a cold; damp flat; and paying a large share of income in tax to support Ethel.

Older people should not go cold or hungry. We are a society and need to look out for each other. But Henry may feel that no one is looking out for him; and a generation shifts towards Ayn Rand style Objectivism rather than social democracy

No, he shouldn't be to afford to comfortably buy or rent his own place, when atypical Henry chooses to live alone in one of the most expensive cities in the world at this current time. After tax, NI, student loans and minimal pension contributions he would have £5,200 left. About £2.9k would go on rent and bills (would be about £900 all in sharing with two others in a decent part of the city), £800 for travel and food, so £1.5k disposable which isn't much on that salary but understandable when that person chooses to live alone in London. I don't feel any sympathy for 'Henry' or anyone else in this position, but like I said it just rarely happens.