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)

I put anything over £100k into pension. Out of my monthly income I then pay £3k pm on mortgage and bills. I put £2k into a school fees pot. I then have about £400pm left on travel costs/ petrol/ birthday gift/ UK holiday fund. This is for one child. I feel privileged and grateful. But the job is stressful (as many jobs can be - low medium or highly paid!) and I am planning to ideally do something else once school fees are paid.

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'

Off the point, but I do hope that means he does all the housework?

Do you not pay utilities, council tax, insurances?

@Captain1 @Mia85 sorry to be thick again - reclaim £60k tax allowance?? What does this actually mean?

Just that the rules on the pension annual allowance allow you to use unused allowances from the previous 3 years if you have used all of your allowance this year. It's called carry forward and is explained here: https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/carry-forward

It could be useful if e.g. you had a suddenly much higher income one year. Sometimes people with incomes a little above those in the OP will use minimal allowance one year and then all of their allowance plus the carry forward in the next to take them down to £100k. That allows them to avoid the 60% trap in one year even if they can't do it every year.

I make over £100k and I don't feel I make enough to save for school fees
.
By the time I put 15% into a pension and £1000-£1500 into savings for other things than school fees (a mix of shorter term goals like holidays and longer term goals), I have enough to live on comfortably, but not lavishly. (My mortgage is £1400 and I pay it alone.)

Inflation has been so high recently that £100k now is what £82k was in 2020. Add to that the fact that the £100k personal allowance taper hasn't changed since 2009 and a £100k salary is not what it was by any means.

I think you need to be on rather more than that, or have a v low mortgage/own your home outright to be supporting school fees on top of other prudent saving plans in this day and age.

Not up to 75 grand they won't. Besides, there are a lot of families who earn way less than that, but whose income is above the benefit threshold.

Me too. This 👏👏👏

Could you start “paying” the school fees now? As in saving whatever they would be as soon as you both get paid? Then have that as the buffer and just get used to your new way of life.

If the nearby state school isn’t great and you only have one DC I would chuck everything at them tbh. I have the same issue with local schools and have just resigned myself to the horrendous tax situation. Re the pension conundrum I don’t put any extra in for various reasons, I just bring home a cool 21p for every pound or whatever horror it works out to be

Yep this is what I have been doing, I have about 3 years worth of fees in various 5 year/3 year bonds and cash ISAs. Just found recently I haven't been able to save as much (probably since mortgage went up tbh!) but there's been some really useful advice on this thread. DH was supposed to use any of his savings to overpay mortgage but seems like it might be better to first fund pension (pre tax) and then save for school fees (post tax from both of us), then use lump sum from pension to pay off remaining mortgage (in 20 years when we retire)
Also going to look at where my money is going and try to budget!!

I think you're answering your own question here - you have a big mortgage, and you send your children to private schools. No wonder that 100k is eaten up so fast - most people on lower salaries will not have these.

I think it's very normal for those earning 100-140k to put any excess over 100k in pension to avoid the 67% tax band. However, only you can decide what is best for you - I don't think people on the internet can tell you whether your house is too big, whether private school for your children is right, or whether you should pay tax now to afford more now or pay less tax now to defer your spending into the future. It's all a matter of personal choice.

But you should make time to build a proper spreadsheet of outgoings, and challenge yourself on them. In addition, I'm struggling to understand your DH's objection to a cleaner post COVID or due to WFH - a cleaner for an hour or two a week is surely a negligible risk? But it's another outgoing, so you should consider if you can afford it.

We earn more than you and it soon goes . Couldn't afford private schools
4 dc none of which went to private school
One is almost a doctor (18 months left)
One works with a very well known racing team
One is a teacher and bought her own house
So it's due then no harm the schools they attended were great tbf
One dd 13 still at home
Our money ridiculously goes on paying someone else do what I now realise I would rather do my self
Cleaner
Ironing
Gardener
Also put all 3 of the DC through university and spent the money providing opportunities whist also ensuring a good work ethos as they each had jobs pot washing ect at 14

I also spend a ridiculous amount on groceries etc as usually don't have time to do anything except trolly dash having working a 12 hour day
The money soon goes on the children and we haven't provided with much to be fair
All had to buy own car for eg
We did always ensure a private tutor was sourced if and when they struggled with a subject at any point . Just an hour or so a week. .
By the time the cars are serviced and cat and dog bills on top there's not much left
I have decided to cut my salary / reduce my hours and be present for the last few years of my daughters childhood
I'd rather mow my own flipping garden !

You don't have a clue.

I think this. Tax efficiency over the longer term vs income in the shorter term. I think you might have to just take the tax hit for now (which I agree is high in this band and a lot of people don’t understand, or care)

You've obviously had a lot of hostile responses so I'll give you a non-hostile one. My income is a bit more than yours, and we haven't sent the kids to private schools, and I'm glad we haven't. I went to a state school, and have done well, and my basic belief is that if kids are bright and/or work hard, they will do okay.

The thing about most jobs that pay at this level is that they are extremely hard work. I do not want to be working in this way much past my mid-fifties, and I feel like the kids going to private school would add another 10-20 years to my working life.

Not sending them to private school has brought peace of mind in different ways - I've paid down the mortage, at one point last year we thought my husband would lose his job and I knew we'd be fine even if that happened.

It really depends what your priorities are. I do understand why parents prioritise their kids' education but as someone who has done more than fine from a really bog-standard state comprehensive, I'm not personally willing to sacrifice everything for it.

my basic belief is that if kids are bright and/or work hard, they will do okay

I would love for that to be the case - not least because it would have saved me about £100k - but unfortunately it’s not always the case.

Kids get bullied, have additional needs that the school can’t cater for, can’t learn when the school routinely can’t get a teacher, can’t learn in an environment where that are not physically safe …

The “a bright kid will do well anywhere” trope is quite disingenuous.

@user143777534 absolutely. My child is deaf and simply being in a classroom with 15 kids vs 30 kids makes a huge difference to her ability to hear her teacher and learn. Being “a bright kid” alone is not enough for her to be able to learn anywhere.

Sorry @user143777534 @Mumsanetta those are both fair points. I was obviously speaking generally and accept that there are specific kids for whom state school just doesn't work.

Equally, I know many children who have been miserable and bullied at private school, especially girls in single-sex private schools (this may be just a coincidence).

I was making a more general point about the reasons I didn't go for private school despite theoretically being able to afford it.

I feel you OP. I am in exactly the same position. Self employed and will actually struggle to raise the cash for the pension this year as my mortgage has gone up so much. I've chosen to stop worrying about it and suck up the loss of the tax free allowance this year, although I have just taken out an interest free CC for the first time since my early twenties which gives me an extra £8k to play with.
Very fortunately I am a gimmer and will be able to take 25% out of my pension in 3 years time (at 55) which will either pay off the mortgage or cover the school fees.

I do appreciate all the responses!
Played with the MSE budget spreadsheet earlier today and pulled all my bank and credit card spending since 1st Jan into a spreadsheet, categorised and made a pivot chart 🙂 interesting to see what I have been spending on apart from household bills- DD's hobbies, theatre/gig tickets, meals and drinks out (not as much on coffees as I was worried it might be while categorising!) and even more on groceries than I expected due to many top up shops. I will do more analysis but good to have it all down.

On the private school thing- I also did very well at a state comprehensive (all As at A level, All A*/A s at GCSE, Russell Group university, good degree) but I was very different to DD who doesn't put much work in and has difficulty following instructions and understanding things at school, doesn't enjoy reading or writing and isn't especially gifted at anything- but is a wonderful confident girl who has lots of nice friends (in and out of school), enjoys her hobbies and is relatively sporty. I feel a nurturing independent school would support her better than a big comprehensive to achieve her potential, whatever that may be.

so after tax would be £5600 + £2000 = 7600
and the mortgage is only £1300....
that would be appreciated if you could tell us where to spend £6300, and feel could not afford private school?
I am too poor and cannot imagine. 😭
I remember another day an op thinking send her DC to a private school, while her income is 35K.....

@AkaWho Good luck with it all! FWIW your DD sounds like my DS who we are moving to private after the summer. I know we've made the right decision as his current class is now in chaos with the teacher resigning...I just want to reignite his passion for learning which was there when he joined school but between Covid and a disruptive class he's lost his way educationally.
Our DD is very different - driven and passionate about school with a big group of friends - she's only 7 but it's highly likely she'll stay in state. Do what's right for your child and find a way to afford it if you think it'll change her outcomes.

OP not sure if I’ve missed this in your original posts but the big question here is how much is currently in your pot (s) and your husbands, and have you calculated how much you’ll receive as income when you want to retire if you both continue putting in at your current rate? Obviously if you’ve only been putting minimal amounts in previously and you are now catching up this is a higher priority than if you already have hundreds of thousands each and you’ll both be looking at big incomes in retirement when the money is needed more now.

It's only in the past couple of years I have started saving seriously into pension (previously it was nornally the minimum I could pay to get the maximum match from employer) I am up to £200k DH has about £150k. I put in about £3500/month (mostly salary sacrifice.) I plan to reduce this in a couple of years and am aiming to have at least £900k in my pot when I hope to retire in 20 years, but this will still be nearly a decade away from state pension. I am not planning on depending on DH pension and his savings plan isn't as aggressive as mine. He also probably won't retire as early.
We have no other income for retirement- have considered buying properties to let out in the past but it doesn't seem like a very good plan at the moment (we were also accidental landlords for a bit and it was not fun)
I do have an IFA who I will chat with a bit more at the end of the tax year.

Thats very similar to us, same amount in the pension per month and we didn’t start putting in properly until recently so it’s a huge jump up from the 3% company contribution / 5% voluntary as standard. We had a sudden realisation mid-30’s that this was going to be a big problem if not addressed now. Coupled with the fact that my partner went into the 100k plus salary band.

If I were you I would continue to contribute as you are, with a plan to take out 25% at 57 to pay off the mortgage / travel / give your children a deposit / save for house renovations etc / top up your income/ even by a flat to rent. To have the security of a big pension pot by 50 is essential for us. (Currently doing all this on x1 wage and when I go back to work will be a fraction of what he earns, you will be in a much better position with shared bills). The power of compound interest should reward you with a brilliant early retirement (I would just carry on with the budgeting and monitoring spending now to ensure you can afford what you want / need with regards to private schools, holidays etc )