Please tell me how you spend £100-150k Incomes

[AkaWho]

I know I am in a very fortunate position to be in this band with my income.
At the moment I basically put anything over £100k in pension, but the increase in living costs is meaning I am spending most of my monthly post-tax income on just living:
Mortgage, bills, petrol and car costs, DC hobbies, gym and pt, the bloody grocery shop! Oh and holidays just seem to be more expensive too. I do have some savings and a DH who also earns/contributes but we were planning on private school for DC in a couple of years and sure we can afford it I just hate the thought of the amount of tax I lose for every £1 over £100k which means for a £20k a year school I could basically have put £50k in my pension.
Do I just have to get over this if I decide on the school fees being worth it? Is there any better way of doing things? Do others with the same salary also feel squeezed? Agreement with DH is my excess income (where exists) goes to school fees and his goes to overpaying the mortgage.
Please don't crucify me, I know I am in a fortunate position and also that there are state school options if I really can't stomach it. I just never thought I would be in a position where I need such a high salary (mainly big mortgage plus the interest rate increase, but also don't deny my family or myself anything)

@Suchardchoccy i guess it is like “hate following” people on social media, but then sometimes people seem really upset by what they read and it makes them feel bad about their own lives - that’s when it feels totally bizarre!

Surely it's your joint income with your partner that's relevant here? You probably can afford school fees but it's your lifestyle choices that make it unaffordable. On every private school thread on MN there are posters on high salaries saying that apparently they can't afford school fees. Then they list their outgoings and it's clear they've made choices on how to spend their money which prioritise things over school fees. And that's fine.
We can afford school fees on a joint income of £160k but that's because we prioritise them over other things.

Putting into your pension may be the most tax efficient and thus financially sensible thing to do over the whole of your life, but if it holds back money from you now that you need it seems silly to me. I could throw more money at my pension but I have children now, I'd sooner have more money now with children than even more money when I am older but without dependents. If private school is a priority for you, and only feasible by reducing your pension contributions (assuming you are still making sufficient ones for your needs) I'd take the tax hit.

I'm sure if you pop along to the money saving expert forums on their site you'll get some excellent responses about how you can use your income more effectively.

How much are your school fees out of interest?

I’ve said we can’t afford them for two kids. Once the youngest is out of nursery we’ll have around 2.5k disposable each month. I just don’t like the idea of maxing ourselves out.

PAYE is the killer I have friends on a lot less that take home more than me as they own their own business and take advantage of the lax tax systems. Capital gains tax is only 20% vs up to 67% for PAYE.

grossly unfair but that’s what it is.

RedPinkPeach DS £12.5k a year due to go up to £16k a year for secondary (but will be higher by the time he gets there in a couple of years).

DD in state and due to go in 5 years (DS started in state too). They will overlap for 3 years in secondary.

Ahh so the gap helps. My two only have 2 years between them. I suppose we could use savings. Like you say. It’s a matter of priorities.

You'd think a genuine ultra high earner could figure trivial shit like this out for themself. Just goes to show, above average salary <> above average intelligence.

Yeah I am quite disgusted with myself for managing to spend so much money but also with busy job and DC, and a chronic illness on top, I feel like I don't have the time to properly budget. Maybe I can set aside some time.
Honestly thought earning this much I would be able to afford a housekeeper 😂but DH doesn't even want a cleaner since Covid because of working from home and not liking 'strangers'

I thought I might get away with this by putting income range in the title so people who didn't fit into what I was asking wouldn't click into the conversation- silly me. But thanks for everyone who has advised. It makes me feel a bit better that it's not just because I am hopeless with money but life is expensive!

This is our household income and as a previous poster says it does just go and we don’t live extravagantly.

Mortgage under £800, 9 year old car paid off, maybe one holiday abroad per year, hardly eat out, just the one DC. I am considering private but I think it would be a stretch. Would definitely not be able to afford it for more than one.

RedPinkPeach there's not actually a huge gap between them (2.5 years) but DS moved out of state primary due to us not being happy with things. DD quite happy there so will stay for the full duration and then we will move her for secondary. Or we might not. In any case we have 5 more years of paying for just one. The 3 years of them together might sting a bit (maybe £40-45k a year) but my DM has offered to help if we're struggling so I do have insurance of sorts.
We live quite a frugal life though. Mortgage but one car, simple holidays etc.

Move to an excellent state school catchment then you won’t have this dilemma. I’m guessing you must have a huge mortgage or debt repayment to be feeling the squeeze at your salary point. Or you are living at the top edge of your means rather than below it.

Your income isn’t the issue. It’s your OHs income of £30k that’s the problem. Can they increase through promotion to £50k+ in the next 3 years?

Reading that you have a chronic condition. For the love of god, do not add more pressure to yourself by adding school fees. Move to a 2bed home in a good catchment. Your OH needs to get a job where he goes to the office because you don’t have the budget for him to faff about at home. If you get sick his income isn’t enough to cover your household.

Does you DH have a similar income? Would you mind saying what your actual salary currently is? Are you currently able to save a decent amount?

@Captain1 I’m showing my ignorance here, but 67% tax? I earn between £100-122k but thought the next tax band started at £125k. Is this why I keep owing so much money every time I do self assessment despite being PAYE?

@Seagrassbasket can we stop with this insane correlation of hard work and high salary! My dh earns that salary, I work in the public sector doing a very stressful customer facing job and earn a fraction of that. He’d admit every day of the week that I work way harder than him 🙄.

Boohoo

I have a totally full life including foreign holidays on a fraction of that, plus when I work, pocket all my income and save it. Not sure what is it you are doing

I’m bit sure what your question is, op. You’ve identified the issue so it’s just a question of using your judgement, surely? There’s no easy fix.

CGT isnt relevant- do you mean corporation tax? You also pay income tax and/or dividend tax and NI- so not just corporation tax. NI is due on earnings over £242 a week and dividend tax on everything over £1000 at differing rates

The benefits of being paid through dividends has been significantly reduced and now only £1000 are tax free
No pension (unless you pay it yourself or through company)
No sick pay

I am 'feeling the squeeze' because I am insisting on putting anything over 100k in pension. I am wondering if this is still the most sensible thing to do. My pension pot is approx what is advised for my age.
My salary is 90k but I get a quarterly bonus which varies but generally between 10 and 15k. DH earns a little over £100k overall, funds his pension and some (I consider) expensive hobbies, and we pool some money in a joint account for mortgage/bills. I pay into pension through salary sacrifice so non-bonus months find myself running out of money and borrowing from savings until bonus months.
My little pension spreadsheet assumes that I will pay a lot less in once DC at secondary school (may be fees, may not, still tbc)
Constantly anxious we don't have a big buffer in case one of us lost our job but I think we would just sell the house and buy a smaller one in a less nice area.
Local state school doesn't have a great rep but I think it would be ok. Local grammars are not local and also my DC isn't super academic so probably wouldn't suit anyway.

It’s because you also lose your personal allowance after £100k. I think it actually works out at 60% but you also pay NI so with that it is 62%. It’s even more if you lose tax free childcare. It’s why people either cu5 hours or stuff pension at £100k

https://www.nutmeg.com/nutmegonomics/how-to-avoid-the-60-tax-trap

Only on MN do poor people struggling to cope with bills earn 6 figure salaries. Some people might suggest such things are unlikely. Or really poor money management.

On 200k HHI you can afford private school for 1 child. Secondary at least. If you don’t want to pay tax on income above 100k take equity out of your house to fund DC private school at least a bigger mortgage won’t mean 67% lost on tax.