To wonder how people are coping?

[CobbleWobble]

We are very lucky, I know this.

We are "Mumsnet rich" both have professional jobs with good salaries (£170k household income) and yet this last 12 months:

• removed children from private school
• changed how we do the weekly shop to reduce costs
• cut subscriptions (like Disney+ etc)
• reduced what I bought in the back to school shop
• decided against a holiday in October half term
• concerned about our usual Christmas food order

What is going on? I just don't understand why or how prices are rising as they are or how people on less than us are coping!

I'm extremely grateful we have the things to cut that we have but we've also had to remortgage this year which has doubled our mortgage payments and then our utilities have increased and the food shop has just got insane.

We have other things we can cut - a holiday in the UK, Netflix, the monthly takeaway but its just miserable to think we may need to do that just not to be living.

Happy to post spending particulars if people are finding it hard to see where I'm coming from.

So AIBU to think that as a country we cannot go on with prices rising like this? How are others coping?

@limescale lending rules are tighter post financial crash hence why repossessions were much higher in the past. It's much harder to get interest only now & do 100% mortgages even still exist?

£900 a month left over is quite a lot when kids are small.

Yes there are a lot of v expensive 3 bed semis in London, but there are also a huge amount that are 400k plus, zones 4+5.... with garden and parking.

Is this between you and your partner? I guess threshold tax has a huge part to play in this, as it doesn’t seem much considering your combined income is £160k.
I earn £54k and come out each month with £2900 after tax etc.
My partner earns around £27k and comes out with £1800 a month after tax etc.
So our combined income is £81k (SO much less than you) but we still get £4700 after tax etc each month. Which I know is less than your £6998 but I would just imagine you’d end up with so much more each month whilst earning £160k, so that is rubbish for you!

I know nothing I’ve said there is in any way helpful 🙈

I think we all spend within our means, and you’re used to having much more free money to spend. The cost of living at the moment is a joke!

Agree with this!

Brexit is at least most of the reason for food price hikes.

I don’t think so. You now need a sizeable deposit.

We’re on 100k and are in the ‘well off’ bracket. Our mortgage is high and we don’t pay school fees but honestly life is most definitely not difficult.

Why don’t you budget yourself the Rich vs Poor amount from the TV programme and have a go on that, then you might fully appreciate where you could budget further?

It’s 40% tax over a certain amount so that probably is where the difference is?

I don't work school hours only. I work 32 hours over 4 days. So we need after school club 4 days a week at £25 a day which is £325 a month. We used 52 days of holiday clubs last year at £45 per child per day which is £390 a month. Plus school lunches £85 per month and school trips £12 per half term, the termly school disco and fairs (Christmas and summer fairs, the kids go in the afternoon, parents not present), school football club for DC1 and dodgeball for DC 2 at £24 per month each.

DH and I take 2 weeks leave together for family holidays and then 3 days at Christmas as expected by our works. The rest we split for holiday care.

I'm going to talk to him about this. When he took this job it was a pay jump so we agreed he'd put a lot in to pension as he'd only paid in 1% up until then (he was 38) so needed to bump that up.

I do feel that we need to pay in to his pension but maybe not as much as we are (I don't actually know how much). We'll sit down this weekend and do the sums.

The problem you might find if DH cuts back on his pension is that, at his salary level, you might not see that much of the income back. So if he is on £125k and puts £25k into pensions he's keeping himself out of the 62% effective tax rate so you'd only see 38% of any reduction.

Yeah I expect this is exactly the case.

@LoudBrickTiger I absolutely cannot help but laugh out loud at this statement
Tax is high in UK so most of it goes on tax. There is little difference in quality of life between someone on 100k and another on median income of 36k.

Where on earth did you pull that bollocks maths from?

Monthly income from a bang on 100k salary with basic 5% salary sacrifice conts is £5,471.45. No CB or tax free childcare.

Monthly take home on a 36k income (what I earned until 2 months ago) is £2,345.30. Plus CB of £186/month for 2 kids = £2,531.63.
our afterschool club is £10 per school day per child, this month with tax free childcare was £352, for the higher earner this would be £440 (although that higher earner would qualify due to the salary reduction because of the pension but that may be too technical for you)

for clarity - that's a take home difference of £2,851.37, per month. Please do not try to pretend otherwise.

Sympathy has nothing to do with it.

The existence of one shit tax policy that has now luckily been changed is not a reason to leave other idiotic tax policy in place. We couldn't afford to disincentivise parents in the 50-60k bottleneck from working, we can't afford to do that to people in other bottlenecks either. It all needs fixing.

No private school on that money here either!

Probably putting loads into work pensions before tax, so could take home much more but are choosing not to, a bit misleading really. Most of us have quite basic pensions.

Yeah, on Mumsnet, people can put thousands into their pension, so buy themselves a very comfortable retirement and massively reduce their tax liability and pay a huge mortgage on an expensive house in a nice area near where they work while buying themselves a valuable asset and they're no better off than people on NMW because all their money goes on their basic living costs.

So DH has no private pension - he was putting in 1% for 4 years before this job and before that no pension contributions. So if he's now paying in 20% he'll still be low on total contributions.

And if he lets say, stopped paying in £5000 per year, we'd get back about £1900 a year or £158 per month.

Have you seen an independent financial advisor? Might be worth considering.

Your sums are correct and I do know there are ways to reduce your "gross" salary to be below £100k to a certain extent.

My argument is Quality of Life does not change drastically. Maybe 100k would allow slightly better car, house etc as the OP has shown in her calculations. This is why you see politicians take gifts of clothes, glasses and even posh food in the case of Boris. They can't afford a luxury lifestyle on 100-170k.

only someone who has never been poor can possibly say that quality of life differs little if you have 5k rather than 2.5k a month

quality of life = lack of stress over basic bills, ability to shop without having to keep tally as you go round, a bit of savings for a replacement boiler or washer , ability to sub a friend a tenner or pop something into a charity pot without concern. Choices. Flexibility. It’s possible on 5k and much much harder on 2.5k. Although it requires some savvy at any level

quality of life isn’t a posh handbag or holiday to the Maldives - that’s a flash life not a quality one

Yep I acknowledged that in my first sentence, was still just surprised how much of a difference it makes, crazy!

You have £900 per month left after you have paid for everything except adult hobbies, gifts and other niceties? If holidays come out of this I guess that could take a big chunk depending on what type of holidays you like to take. There may be room to cut back a bit there.

Your mortgage is about the same as my monthly salary and has increased massively. You should have probably looked at moving rather than remortgaging if you really think you are struggling. That said, wouldn't stopping the school fees have accounted for a lot of the increase?

Why on earth did you think you needed to cancel Disney+? It's only a fiver a month! It's a drop in the ocean out of that £900.

Your utilities seem high. I live in a 4/5 bed and my gas/elec is about £180 and water about £30. Broadband also about 30 and mobile phones (x2) £18 (sim only). That's about £260 all in. There is less people in my house but I work from home so someone is here pretty much all the time.

Do you need to pay that much for professional fees? Obviously I don't know what you do but it sounds a lot monthly.

You should be able to cut your groceries, particularly as you are accounting for pets separately and your kids have school dinners.

But it absolutely does @LoudBrickTiger that additional 34,000 per year in net income allows for outsourcing of household tasks, vastly increased pension contributions, no penny pinching around the grocery shop, additional extra curricular for the kids, private swim lessons vs council, tutors, savings, it gives the benefit of CHOICE, the option to reduce working hours with no detrimental effect on day to day life.

Of course the quality of life is vastly improved.