To think the problem with wealth inequality is that rich people don't know how rich they are?

[Neeroy]

Article in the Times today saying that people earning six figures 'don't feel rich'.

Because they are surrounded by six figure earning peers they are comparing themselves to people who have more rather than the 90% of the population that have far less. This is why the budget is poorly received in the news, because rich people think they already shoulder too high a burden when in fact compared to everyone else they still have far more disposable income. Even if they have to cut down on the number of holidays they go on. They aren't sitting in the dark under a blanket. Or only making food that doesn't require turning on the oven.

I don't think they realise how so many people have to live.

www.thetimes.com/article/1fb46414-8f65-436f-8f95-451d69626148?shareToken=8061d939633164c0dfbd805240c8e008

You can keep telling me I'm wrong if it makes you feel better too.

Why do you assume I assume this?

Being more financially comfortable compared to someone else doesnt make them rich. Yes they may earn more, live in a more affluent areas and afford a holiday every year but that isn't rich in my opinion. A rich person doesnt need to work. A rich person lives off their investments. A rich person has more wealth than they could possibly need. Those rich people are the problem. Not the lawyers, pilots, head teachers etc who have to work for their money like everyone else. They are more comfortable than you, and maybe aren't living paycheck to paycheck but they aren't rich and if they were suddenly unable to work they would be in the shit just as much as you!

No.

I do think though that in mine and DHs case, our success is due to 80% luck. There is some privileged there - stable home lives for both of us but there's not generational wealth, private schooling etc.

Ha ha ha, I've achieved plenty, I'm just not in a naive bubble.

I didn't suggest that at all, but privilege definitely does contribute. I see it in action every single day.

At least part of it is surely to your work though - there is an aspect of luck which means your hard work got recognised and rewarded with a high salary, but in my experience it's pretty rare for someone with your background (i.e. without very wealthy connections) to just swan in and get a doss job paying £100k+ for doing nothing.

Luck/opportunities are a kind of force multiplier, if you do zero work then the output will be zero. You can acknowledge you are benefiting from the multiplier effect but it doesn't take away from the need to work hard to realise it.

Someone being rich is often defined as anyone earning about 20% more than I am.

But it's also about what you're used to.

Neither of us earn three figures. Between us before tax We're close.

We don't do foreign holidays -holiday is often caravan booked last minute to get a better deal
Our main car is 14 years old. We only have two because dd2 needed an adapted one (and no she hasn't got it on Pip)
Last bit of new furniture was our sofa, two years ago... That was 2nd hand.
We don't have a cleaner, or gardeners
We don't eat out much

But if there is something we need, not want, we can normally get it. I feel rich.

London is a completely different place to the rest of the UK.
@wheresmymojo presumably only earns £120k because of working in London, and already has a four hour return commute.

Buying elsewhere / further out means either an impossible commute, or changing jobs, and finding that the same job but not in London actually pays about half as much.

Map
ONS map of incomes.

Statistics for the whole UK are massively skewed by London.
The average salary for the South East is £47.6k.
For London it is £70.3k.
London Average salary and unemployment rates in graphs and numbers.

IMHO the government needs to do everything it can to level-down London (because levelling-up everywhere else is impossible), starting with moving as many government and civil service offices as possible out of London.
My choice would be to build a new 'houses of parliament' plus associated offices somewhere near Manchester, and turn the current not-fit-for-purpose buildings into a museum. Can't see it happening though.

It depends on circumstances.
Admittedly, they won't have many "low earning" people around them, so the idea about being "rich" may be skewed.

Honestly, I'm just really lucky that I've got in to jobs where I have a natural talent for what I do. And job 1 (social work, then social work management), lead to job 2. Job 2 came about when I chatted to a colleague of a friend. I didn't need to work particularly hard at job 1 to be promoted but I'm naturally good at it (I'm not amazing or a savant, it's just in my personality and natural skill set). Job 2 is in a sector that pays a lot more than job 1. I've just got job 3 (same as job 2 but at a different company) and in the private sector, job moves tend to come with huge pay bumps.

Yup

oP I kind of agree the rich don’t realise how rich they are. But the rich aren’t the people who earn 100k 😂 no way

Oh, I’m not talking about me. Why did you think that? I can understand the position that some other people are in. I don’t just scream “rich, rich, rich”.

The figures I gave were for a two bed terrace. The sort of house that most reasonable people would not associate with being rich. And the £2k for childcare is at the lower end of the scale. Some of my colleagues are paying £3k for one child.

Wealth and income are two different things. You can be high income but low wealth - e.g. families with high outgoings living in high cost areas. You can be low income but high wealth - mortgage free, lots of assets, working part-time or retired and living off savings/investments/pensions.

Currently, the high income person is the one paying most, if not all, of the tax in the UK in the above situation.

I previously lived in Switzerland, and they have a wealth tax as well as income tax, VAT etc. It is not just for very wealthy people - e.g. if you own your home, you are already going to be liable for wealth tax. Depending on which canton and municipality you live in, the amounts and allowances (deductions) are different, but it is usually progressive, and covers your worldwide assets minus debts. The wealthier you are the more you pay. Housing is not assesed at market value but to a formula well below this level. Pension savings and certain personal possessions are excluded. The rates are from less that 0.1% to just over 1%. Some rich people move canton/municipality to minimise this tax, e.g. Nidwalden or Schwyz, but if you're not from those areas, the main attraction is tax saving tbh.

Switzerland does not have IHT (abolished some time ago), but does charge income tax on bequests if you are not direct line related - so, children no tax, parents no tax, friends and extended family taxed by degree of relatedness. Before Covid I did a back of the envelope estimation on what a 5 pro mil (0.5%) wealth tax would raise in the UK . I came up with approx £45 billion per annum. Even if generous deductions reduced that by half it's a big chunk of money - annually!

The very wealthy would not leave if it's 0.5% per annum charge that everyone with wealth is expected to pay. It's charging multiple percentat arbitrary starting points (£10 million, £20 million, £50 million) that scares off the very wealthy. Switzerland is discussing this problem now, since the Young Socialists (far left) propsed having a referendum on bringing in IHT of 50% on people with over £50 million. The vote is at the end of this month, and the Young Socialists are likely to loose (barring a major upset), since the Swiss are very pragmatic, and do not want to kill the golden goose! Imagine the wealth tax those people pay every year! A few have been spooked and left already, so let's see what happens!

Agree on having another non-London hub - but it really should be Manchester as a focus rather than lots of random places. There need to be options if you lose/leave the job you moved there for. There have been real talent issues by moving departments like DVLA and the ONS to small towns that don't have anywhere near the same density of opportunities that London has.

Maybe Manchester and Edinburgh.

I feel like you're not giving yourself enough credit honestly.

Any fool can spend all the money they have, and more, and then complain about having none left.

I have never paid for childcare and I have two (now adult) children.

Well that’s great for you. Some of my friends who stayed in the area that we grew up in haven’t paid for childcare either as their parents have looked after their kids. But it’s very naive to think that is an option for everyone.

Are you rich but 'don't feel rich' so are deserving of all the sympathy in the world? | The Daily Mash https://share.google/gVE3rt5IhoO1eyC9P

Exactly - especially if we are talking about people on 6 figures, which is very disproportionately going to be in London, with a job that requires childcare until 6pm, i.e. costs continuing after school age (that includes knocking off "early" to be able to make that, so you look like a non team player not being able to take the 6pm calls...).

Well the mantra aimed at UC recipients is " don't have children you can't afford". This is clearly the situation here. Having only £900 a month left to pay all bills including food, toiletries, cleaning products, heating, broadband, CT, clothing, etc means they are living well beyond their means.

It’s because 6 figures is not ‘rich’.
Is it more than most? Absolutely.
But just look at inflation & the income tax threshold freezes. £100k is worth what about £60k was back in 2010. So that’s why people don’t feel ‘rich’. Because at best it is now enough to be ‘comfortable’. But even that depends on what other income / outgoings a household has.

I think being upset about how others feel about their income level is misguided anger.