How much money do you need to live a comfortable life in London

[minimisa]

I'm a SAHM at the mo and DP has a fairly good job (earns just over 50k) but with our rent and bills we have pretty much no money left over. We run a second hand car; went on a very cheap, off season, UK hol; get lots of hand-me-downs or second hand stuff for our boys and hardly ever buy new clothes and suchlike ourselves. Things like a baby-sitter and a night out are very, very rare treats for us and although I realise that compared to most of the population we are wealthy and I'm not unhappy living fairly frugally I'm interested to know how much you all think is needed to live a comfortable life in London.

Tough question since depends on where you live in London and what fixed costs that can generate. £50k gross is around £36k net assuming only your DH is earning

My DH and I spend more than that just in fixed costs. Currently around £35k/year in rent with council tax, utilities, phone adding another £5k or so. My DH has told me (he has spreadsheets for this stuff ... yes he's a geek) that we couldn't operate on less than £110k/year and this will only increase as we have more children and want to educate them. This sounded very high to me but I remember than before we got married, I was earning about £55k and lived out of London to reduce rental costs etc.

I'm sure you can easily live on £50k/year in London. However, the word "comfortable" is the problem. In my definition it just wouldn't be possible. Sorry

I'm just trying to work out the very same... £110K is a massive amount

Do you guys get any extra help, ie benefits etc? I'm not even pg yet and I'm already stressing out over Nursery costs Vs being a sahm etc! We're going to be moving further North next year (we're currently in Islington) - thinking of Highgate/Crouch End area...

Depends on your definition of comfortable and where in London you want to live.

Not helpful but I can tell you that DH and I made the decision to move out to the home counties when DC2 arrived because we just couldn't make it financially work in London. The main sticking point was that nursery for one was costing £1500 a month and that to buy a three bed house meant increasing our mortgage by £800 pcm - something that we didn't need to do when we moved out

When we added it all up babysitters; drycleaning; takeaways; cinema; theatre; drinks out were all more expensive (although tbh in many cases better!) in London.

£110k seems a massive amount but assuming one person is earning this then it will be £69k net of tax. Since we pay £35k in rent and another £5k in council tax/utility bills thats leaves £29k net/year or abount £550/week.

With car for, tube/train for my DH, food, clothes, bits of furniture, holidays etc etc I can see how my DH calculates we get through this amount.

We live on the outskirts of London on DH's sole income of currently 35k-ish (he's freelance so it goes up and down), I'm SAHM to two DC. Like the OP we live frugally and get by, it's not a luxury lifestyle compared to the one we had on two incomes with no kids, but we are much better off than most of the world's population so I try not to worry!

35k on rent means you must have a huge house or live in a very expensive part of London, around here (not a trendy suburb but nice enough) you could easily get a 3-bed house for one-third of that.

Chelsea & Kensington I'd say £500k pre tax and you would be struggling.

Hm, we do live in a fairly expensive area of London and could move somewhere cheaper and pay less rent (we pay just over 20k a year and that's a good deal where we are!!) or get a cheaper mortgage but this would either mean living in the outer suburbs or going to a very grim area with dodgy schools etc. I'm coming to the conclusion that even if I go back to work part time, I'll earn about 30k and with taxes and childcare costs for two we really can't afford to live (comfortably!) in London. It seems sad to me that middle income families are really being priced out of the capital. Pre-children I really didn't mind living in a tiny one bedroom flat but now I just can't contemplate it!

JudyPink, I only got statutary maternity leave and we get child benefit for two (we've got twins). I think we're due about £3 a week in tax credits but haven't actually got it yet....Childcare costs are pretty horrendous - lots of people seem to rely on family for unpaid help but not an option for us so we look after our boys pretty much 24/7...One reassuring thing I can tell you though is that there are loads of free or v cheap activities you can do with the baby when you're on maternity leave - you really don't have to sign up for those expensive gymboree type things. That's one of the benefits of being in a large city although I suspect lots of this stuff is about to be axed.

My DH came up with the point that the average cost of a house in London is now around £400k. With a £320k mortgage, then a 25y repayment mortgage at rate of between 4%-8% would cost £20k/year to £30k/year. You'd also have to save £80k deposit first. So on £50k gross, £36k net you might have £200/week to live on.

As i said in my first response you can clearly live on £50k/year in London. I just think that if you're finding it difficult then moving further out might be a great option.

When I first came to London from overseas, I came with express intention of working to save money to pay off my mortgage on my house at home. The cost of living in London shocked me (this was 10y ago!) and I wasn't saving anything so i moved out and commuted. I found myself much happier because I new I had enough money to live comfortably and save for my future.

The only reason I live in London now is because my DH earns a lot more than i do!

I don't think moving out of London is really an option for us. We looked at places like Milton Keynes etc and the rail cost was £400 a month! We cycle at the minute (work is a 10 minute cycle away atm) so we don't pay anything for a commute... although our rent is reflective of the location.

minimisa - It's also difficult on the family front for us too, we're both originally from 'up north' and moved to London just over 2 years ago for work. Both of our parents have a 6 hour drive down here, so I don't think they'll be able to help where childcare is concerned!

I was reading about 'childcare vouchers' and 'employers help towards childcare' on the Direct Gov site earlier this evening, how common are the vouchers and help from employers towards childcare? Is there a massive list of credentials you need to meet for these benefits?

Vouchers are the only way childcare was affordable for us when I wanted to go p/t. Approach your HR dept to find out the name of your provider or get them to set it up asap. And you can both claim upto £1200 each a yr if both work places offer it. You can also claim whilst on mat. leave and store them up until you need them, since work claim back the money.

Yes, good advice from DinahRod on the vouchers. We too would be eligible for them and I think most big employers do them. Also I read on MoneySavingExpert that if you want to claim the higher tax rate you need to register for them this tax year as the govt. is putting a stop to that.

Not sur what you mean by"work claim back the money" Dinah.

Most vouchers are paid for by salary sacrifice but the employee does not pay tax and NI on the voucher value (and the employer does noy pay e'ers NI).

I have heard about the loophole while on maternity leave that, if you are getting vouchers before mat leave, employers must continue to give you the vouchers but are not allowed to deduct the cost from your SMP as this is a protected payment. This means the employer has to bear the cost of the vouchers and as you can imagine most are not happy about it and try to wriggle out of giving the vouchers. They can claim it as an expense to set against taxable profits for corporation tax, but they cannot claim back the whole cost of the vouchers.

I think it is doable. we live fairly central (zone2) and pay 1500 pm for rent and bills for a largish 2 bed flat. we have a car but only use it about once a week for the main shop or to go away at weekends + it*s handy as a shed.
we walk alot and take public transport. employer helps towards nusery costs for the dc. we are able to save and go to europe for our holidays a few times per year.

depends where in london!

We live in a 3 bed place in a nice north london suburb, v good schools etc, DH earns 30K I earn around 10K and we are very happy, but not 'comfortable', in your terms anyway.

we rent, we go on holiday, but not abroad, we eat well but watch the bills carefully. We have some money left at the end of the month.

We live a much simpler life than the one we had before DD.

We live happily on around £28k gross, in a nice area. No car, no foreign holidays, no music lessons etc for the kids. We all just have hand me downs and charity shop clothes. Of course I'd like luxury now and again. But, as for life in general, its manageable on this amount, just. We live in a nice area, we have fun. Dh works v hard and I do easy work but with alot of juggling to make it fit round the kids.

charity shop clothes are just as expensive as the big supermarket clothes in our area. I could have written the start and we don't live in London.

I think it really depends on the area. We live in NW London, zone 5, and it's a nice place for families and housing is much more affordable than closer in. South East London is also cheaper with some nice places.

NW London here too, I do agree it depends on the definition of 'comfortable'. We have 3 children to support, own a flat and have no debts on a combined salary of just over 60k, But then we run a 17yr old car and don't holiday, have sky, mobile contracts etc which many view as essentials.

We gave up Sky when I got pregnant and yes as you all say it does depend on your definition of comfortable and mine certainly wouldn't include living in a two bedroom flat with toddler boys!!

We don't have sky/a car etc etc either, and my daughter gets some 2nd hand things for birthday/christmas presents which some people would be at

but, our way of life is mostly through choice, we both work in the arts so chose to not earn the big bucks. That's what makes me feel comfortable, knowing that we have freedom and choice.

I get £22k which is for me and DS only, no housing or council tax costs and we live in central London (zone 1). It's fairly comfortable as I get a free travel pass as well so no travel costs. We don't have Sky or a car, but could probably afford it, there isn't much need to have one where we live. We do have foreign holidays but that's generally cheaper than a UK one these days.

DS goes to a boarding school now with all costs paid so I don't have to pay out for food, activities etc for him during term.