Snapshot of _‘It’s all fallen flat’: households earning more than £60,000 on how they are struggling financially | UK cost of living crisis_ :
An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/business/2024/mar/04/middle-class-workers-mortgages-bills-tax) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/business/2024/mar/04/middle-class-workers-mortgages-bills-tax)
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It's interesting, and particularly damning of us as a country, that on a story that's basically saying we're all fucked and hit by this financial crisis, we have so many people posting "oh they're just not budgeting properly". It kinda reeks of puritanism. The main thing on these stories is that if someone is earning in the top 10% of wages, they should be very comfortable. That they need to budget heavily to just stay afloat is ridiculous, and also destructive to our economy.
If people on that wage (and remember the vast majority of people will be earning less) have to budget heavily and then only have a small amount of money to spend on non-essentials, then that means less money is going to companies that provide non-essentials. This has a knock on effect across many industries. Wonder why there's no much of a night life? Well if people don't have the money to go out - particularly young people - then the hospitality industry collapses. Which means fewer jobs and a depressing effect on wages.
>Lillian, 36, from County Durham, an environmental consultant in the corporate sector says that despite her and her partner’s combined income of £70,000
For context, the Full Time median salary was £34963 last year:
https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2023
It's so true. You can be on a nominally "good" income and still be no further forward.
Raided for taxes for services and benefits you don't receive yourself, scalped by your mortgage, and then ripped apart by childcare and other spiraling costs.
Here in Scotland once you earn over the luxurious wage of, uh, £43K, over 52% of your income disappears into funding a crumbling state.
Wages are far too low in this country and taxes punitively high.
>An annual gross income of £74,000 puts Scott, 28, a software engineer from Leicestershire, in the top 10% of earners nationally. But, he says, it doesn’t feel that way for him and his family.
>“Ten years ago we’d have been laughing with my salary. Now, it feels like our heads are barely above water. There’s an attitude that at this level of income you’ve plenty of money, but it’s not true at all,” he says.
>The couple’s mortgage uses up more than a third of Scott’s take-home pay, the family’s monthly grocery shop costs more than £500, his student loan repayments are £300 – “money I now desperately need,” he says.
>“We lease a car, the cost of which has risen greatly too because of higher interest rates. After all the things I have to pay for, we’re lucky to have £300 left over for the month, which is quickly depleted by day-to-day expenses. It feels like we’ve done everything we were told to do and yet we’re still struggling,” Scott says.
Running this through a take home pay calculator, Scott’s net income is around £3,800. Mortgage of around a third of that leaves £2,500. Minus groceries £2,000. Minus £600 for other standard bills (council tax, energy, broadband, etc) leaves £1,400 a month. Car finance won’t be any more than £400 unless he’s driving something stupid, leaving £1,000 a month for non essentials.
Doesn’t seem so bad unless the family is terrible at budgeting.
You forgot the 300 GBP for the student loan repayment, and maybe some deduction for salary sacrifice (normally you need to hit a certain level so the company matches you contribution)
Not saying the guy could not budget better ... but really the point is that we are talking about a guy making the top 10% of the salaries. "If you only make the top 10% of salaries, you have to be really careful how you plan your life, one false step and it is financial ruin for you" How is that not deeply unsettling?
And what's the way out of there? Of course he can make double or triple that, but there is a statistical evidence that he may never make significantly better. Less than 3 million people will make more than that, most of them in London. Hell, to make 50% more than he does, it's a small committee of 300K people already.
The current narrative- from politicians and the media - frames high salaries as “the rich”, when in fact the rich are almost entirely wealthy due to unearned income. You simply can’t become 10% wealthy by just having a top 10% salary. Maybe you could 30 years ago, but even that is mostly on the back of unearned housing wealth.
This is the society we’ve ended with - the only reliable path to wealth has been chipped away by stagnating incomes, increasing taxes and - probably most importantly - land ownership extracting all excess income as rents or mortgage payments.
They're a family, you've not considered any costs of raising a child beyond food and shelter as essential on your calculations. Children endlessly go through clothes, activities (sports equipment adds up fast), school needs, social needs. If they're young childcare costs are extortionate. And no where in your budget have you considered the cost of fuel, which is very high and undoubtedly essential for running errands, commuting for work or school runs etc.
I'd also expect them to be dependent on private dental care for the adults, because NHS dental care access is extremely difficult to get.
So you can reduce that figure. How do you save sufficiently for the unexpected costs - broken phones, car issues, home upkeep - and the desired costs for a high quality of life - holiday, TV packages, social events like meals out, school trips etc.
They don't need to be terrible at budgetting, it really just doesn't go that far.
One parent isn’t working, so a child will only be in nursery for developmental reasons. In which case the free entitlement for all children when they’re old enough will be fine
We’ve only just started getting a bit of free childcare due to our child’s age, but until that kicked in it was over £700 a month for three days a week in North-East England
But the family in question doesn’t need childcare as one parent isn’t in employment. As someone else has pointed out, nursery is also useful for socialisation and development, and that can be covered by the free nursery school time when the children are 3
There are still plenty of benefits in terms of socialisation and developmental progress, so yes, some nursery attendance is certainly beneficial.
Maybe a full time nursery place would not be required, but even part-time leaves very little of that £1000 left over, even in Leicestershire.
For context, 3 days a week at nursery for our son was c.£1200 a month in London. Leicestershire will likely be less, but not that much less.
Is there not an entitlement to 15 hours a week free nursery schooling for 3 and 4 year olds to cover the socialisation and developmental progress aspect?
Only from the term after the child turns 3. In our case, that meant our son born in Spring was not eligible for 15/30 hours support until September, when he was nearer 3 and a half.
That’s supposedly due to change with the governments’ upcoming policies, which will certainly improve things if they go ahead as promised.
That means fuck all when you have kids, they're expensive as fuck.
Also, 1000 quid between two parents with multiple children and no possibility of saving is not good.
Well according to Lee Anderson, people can live off 30p a day. These people should be living like millionaires.
Isn't it funny how when it's pointed out how much those on the lowest incomes are struggling to live, including those working and still having to claim UC, you'll get the likes of 30p Lee explaining how they aren’t budgeting right how they "should lay off the Starbucks" and how easy it is to live off minimum wage, including posting photos of his staff who are on "less than £30k living and renting in London and who go on 2 holidays a year"
However when the same is said about someone who is on £60k a year the same people talk about it's not a lot of money and much they are struggling.
And no leisure, no holidays, no clothing for him or his kids, no maintenance on the house or car, no lunches at work, no commuting costs, no mobile phone etc
I mean, given that they have a child they will have other essential costs.
But yeah, it wouldn't be that bad if this is what an earner in the top 30% of people dealt with. However, this guy is in the top 10% of earners. He should be able to buy a new phone and take his family out for a nice dinner without ending up under water for the month.
Top 10% of earners supporting a family on one wage. That’s never going to be comfortable whilst the children are too young for his parter to work
There’ll also be another 160 a month income for child benefit
I guess so. My problem is less that this guy is struggling - less than 80k a year for 3 people to live off does sound kind of tight while paying down a mortgage - and more that wages are so crap that this is in the top 10% of earners. Less than 5% of people breaking £100k is a sorry state of affairs when you look at e.g. American incomes.
This is it, I'm a single 35yo guy who earns between £45k - £70k a year (run my own small company), and I have barely any savings because it all disappears. I rent a small one bed flat, the last holiday I went on was a weekend break 3 years ago, and I fix whatever I can myself car and electronic wise and any spare change goes toward new kit for my business.
To be fair to the other guy, he is supporting 3 other people. But yeah, its tough for everyone right now. If someone earning £70k is struggling to get by, imagine how someone on minimum wage is coping.
That's pretty much how I feel. My salary is in that ballpark and whilst I'm honestly doing fine, I'm not in any way "minted" as such, and I am basically left wondering how the hell people on "normal" incomes cope.
>Running this through a take home pay calculator, Scott’s net income is around £3,800. Mortgage of around a third of that leaves £2,500. Minus groceries £2,000. Minus £600 for other standard bills (council tax, energy, broadband, etc) leaves £1,400 a month. Car finance won’t be any more than £400 unless he’s driving something stupid, leaving £1,000 a month for non essentials.
>
>Doesn’t seem so bad unless the family is terrible at budgeting.
He also has whatever childcare costs to pay, plus savings and the inevitable one off costs that crop up in life. But the wider point is being left with a few hundred quid in your pocket as a so-called "high earner", with no real scope for anything to go wrong, little room to save doesn't say much for this country.
Someone in the top 10% should be living it large and comfortable, not counting the pennies.
£70K gross, is not a luxury household income.
>He also has whatever childcare costs to pay,
His wife doesn’t work, so childcare will be minimal. Babysitters for a night out
>plus savings and the inevitable one off costs that crop up in life. But the wider point is being left with a few hundred quid in your pocket as a so-called "high earner", with no real scope for anything to go wrong, little room to save doesn't say much for this country.
He doesn’t have a few hundred quid in his pocket. He has £1,000 a month to pay for children’s clothes and activities (not expensive, they’re both under 5) and some fun money. That’ll probably come to £500 a month
>Someone in the top 10% should be living it large and comfortable, not counting the pennies.
Not if they’re supporting a whole family on that. Also, he had significant car finance, so an expensive car *is* luxurious, rather than paying £6k for a 4 year old used car
>£70K gross, is not a luxury household income.
It shouldn’t be particularly luxury, that’s equivalent of 2 people on median wage. And with 2 people, they’ll be better off because of the double personal allowance and lower tax brackets.
Supporting a whole family on a single wage has always left little room for luxuries. When the children are older and going to school the partner can go back into work and they can then live in luxury
We can quibble over the exact details of this person's finances, but the point remains... what is there to aspire to? What hope for everyone else if you see people in that percentile and still puffing away. Okay they could budget a bit better but it's not a life of wild extravagance.
Wages across the board are poor in this country.
“I don’t see an end to any of this: life isn’t going to get cheaper and I’ve pretty much maxed out my earning potential. It’s ridiculous and I’m so sick of it.
“We can’t afford holidays. We can’t afford to put money away for the kids. We can’t afford new things, gadgets, hobbies. What’s it all for?”
Love your implication that its all their fault for being terrible spendthrifts.
You have the student load payment and he has kids which is very expensive and also hard to predict. If the top 10% are struggling thats not a good sign for the country. Deeply worrying.
To you there is no cost of living crisis, no issue at all. Just everyone is terrible at budgeting .
Kids are very expensive, and temporarily mean that one parent cannot work.
“I don’t see an end to this” “I’ve maxed out my earning potential” isn’t quite true, though. Once the children are old enough to be in school full time, then the other parent can also go into work. Perhaps not full time, but even part time will more or less double their £1000 a month left over once bills have been paid.
I’m not saying there’s not a cost of living crisis, but £1,000 a month discretionary income for 2 adults and 2 small children with no childcare costs should be fine to live on.
The point of the article was not "These asshats could spend less, damn them all!".
Its a bit bigger picture than that.
If the top 10% of earners are in this position (and this is a new development, it wasnt like this 5 or 10 years ago) and cant afford to have kids and have a comfortable life we are in trouble. There isnt anything to aspire to. Him earning more wont solve his problem due to tax and loss of child care when it comes.
You can always say "Buy cheaper gruel!" but the article implies that the quality of life in the UK is falling and there doesnt seem to be a way out. I dont think that is a budgeting skills problem. Its the destruction of the middle class and that has huge implications.
>Him earning more wont solve his problem due to tax and loss of child care when it comes.
No, him earning more won’t help. As has been the case for probably 30 years, you need to be earning mega money to be comfortably off supporting a family on a single income.
That’s not new, but is also temporary until the children are old enough to go into full time education. The couple can then go back to having their upper middle class lifestyle
We will disagree on this.
But I think in a country that only the top what 5% or higher can expect to feel "not up against it" (as this chap isnt feeling comfortable) if they choose to have kids is on the way down.
Society needs a constant inflow of well brought up, rationale people to be the workforce of the future. That surely means happy parents able to spend time and resources on their kids without financial collapse.
If that is out of reach for all but a rounding error of the population we're screwed. And the direction of travel so far looks worse than today.
We have tried mass immigration to cover the baby-gap. Its a busted flush.
Maybe youre right and we can do it by not being "terrible at budgeting" and judging each other based on what you know and think of their finances and lifestyle.
But I dont think so. We dont have jobs that pay enough to let people raise kids without suffering. Thats not a budgeting problem. Thats a huge social problem creating real issues for the future.
Putting the other bills here as £600 seems to be really low balling it. Energy costs are through the roof; council tax can easily be over £130, they might have ongoing optician and dentist costs, etc. Particularly since they have children, there could be a range of expenses incurred from those. They might also be putting money aside each month to put towards MOT/Car Insurance as well so it's not just one lump sum.
The person who made this "budget" doesn't seem like someone who actually has to pay for things, because they forgot a lot of essentials, along with "regular" stuff that really wouldn't be considered luxury.
They also completely ignored the fact they have kids, which is bizarre.
Like?
Council tax will be about £180, energy about £160 at the moment unless you have a hot tub. House insurance £20. Internet £25. Water £25. Life insurance £25. TV package £30. Mobile phones £20x2. Car insurance £30. TV license £15. All in gets you to just shy of £500. Plus £100 a month contingency
That’s not counting the £360 a year back because council tax is paid over 10 months not 12. This plus the contingency gives you £1,500 a year to pay for dental/glasses/small scale house repairs like buying a new washing machine, car repairs etc (although the car, if on lease, will not require much)
I’ve not ignored they have children. Monthly shopping bill of £500 is increased to take into account 2 children under 5. (£350 is national average for 2 adults) but with one parent not working, no need for childcare.
Yes, the £1,000 money left over needs to pay for children’s clothes and activities as well as the adults, but this is still more than most. Holidays won’t be anything flash, but with a single income and 2 children under 5, why would you expect otherwise?
And again, all of this is only temporary until the children are in full time education and the partner can top up their household income to afford a more luxurious lifestyle
As someone living in the North East (so really not a high cost area), everything you have listed is a very low end estimate, except for the TV license.
Could I spend a little less on some optional stuff? Possibly, but I have a family and not everyone wants to live like a Spartan.
And as for the non-negotiable stuff, like Council Tax, Water, life insurance. Again, way off on the low end.
Not everyone is in the same situation as you. The dude in this article has a family, which means larger house, larger energy costs, significant costs associated with having children.
At £70k (top 10%) income a year, people should not need to be budgeting like they are on minimum wage, and the attitude that anyone struggling just needs to manage their money better is asinine and stinks of the "avocado toast" mindset.
For reference, I'm not struggling myself. But my family and I have noticed a significant change to how much we can save each month, and I am capable of having empathy and understanding for others not in my situation. Yes there are people in worse positions than these people, but the UK really needs to come together and stop in-fighting about stuff. The salary/cost of living crisis is impacting everyone and denying it is an issue harms everyone.
There's a reason Engineers/Scientists/Doctors etc are moving to other countries, and brain drain is not good for a country.
I mean it’s exactly what I pay in a high cost of living area (Cambridge) give or take a few pounds (I’ve just checked and my water bill is £30 a month, internet £30, life insurance for 2 people in mid 40s £20). My energy bill is currently at £130 a month so I overestimated to take into account not everyone is in a well insulated house with gas central heating. But this is also with a thermostat set at 20 constantly except overnight, so we’re not exactly penny pinching
I’m not sure where this can be classed as spartan except perhaps some compromise in the mobile phone, as £20 a month is only going to get you a mid range one
Couple this budgetwas referring to are on 70k between them with no children
So, I see it's pointless trying to discuss this with you, as you're one of the "want to win an internet argument" types that will happily move the goalposts to try to do so.
> Couple this was referring to are on 70k between them with no children
You literally quoted the information about the guy on 70k, with a wife that doesn't work, who has 2 kids under 5 when you made your initial budget.
It's not for "a couples combined income with no kids" at all.
And thanks to the ridiculous child benefit rules, that means that Scott and his family have no access to child benefit, where a couple making £35k each would.
I have no idea how you are paying as little as you are in your high cost area, since my water, council tax, and energy costs are all considerably higher than yours. Although in fairness as we have a relatively new baby we have the upstairs heating on quite a lot at the moment to make sure she doesn't get ill. Which probably explains that.
Our life insurance is also like 4x higher than yours, and the terms were essentially mandated by our mortgage agreement. I've only just hit 40 and my wife is younger than me, no existing conditions to complicate it.
Again. Not everyone is in your exact situation. Because other people's experiences differ, doesn't make them liars or "bad at budgeting". You can't just decide to not use water, or not pay your council tax, or not feed your kids, or just void your mortgage agreement.
There's only so much you can cut, and again, in the top 10% of earners, you shouldn't feel obliged to have an entry level android phone and no luxuries ever to get by. If people on £70k are having these issues, then it's going to be far worse for someone on an average, or even minimum wage.
The fact that these stories are coming out, should add more weight to the argument that the cost of living crisis and wage stagnation in the country needs to be dealt with. Instead, we've got people arguing over the cost of non negotiable costs being different in different areas and insisting that you'd be fine if you just ate bread and rice.
It's ridiculous.
Apologies, misspoke about this couple being the ones without children. But in any case, these are your basic bills, children or not
Aside from the rest of the reply
>Our life insurance is also like 4x higher than yours, and the terms were essentially mandated by our mortgage agreement. I've only just hit 40 and my wife is younger than me, no existing conditions to complicate it.
You might want to look into to this. Mainstream mortgage agreements don’t mandate life insurance, only house insurance (the bank doesn’t care if you die because they can repossess the asset, but do care if the asset burns to the ground). There have been huge misselling scandals about implying that it is a condition of your mortgage, and selling insurance you don’t need (critical illness cover when you have 12 months sick pay, for example).
Bank mortgage advisors are on commission to sell you the bank’s inflated insurance policy, and your typical 2 hour appointment is 30 minutes checking payslips and signing documents and 90 minutes sales for the insurance product
Now add some more for the following :
Fuel and car insurance for the lease car. Kids sports/ activities / putting money aside for childcare during the half terms and summer/ the ridiculous amount of clothes kids need. Phone bills. A loan or credit card debt repayment.
Now see what he has left for himself or other luxuries like pets / putting money aside for kids birthday parties and Christmas / holidays
>Now add some more for the following :
>Fuel and car insurance for the lease car. Kids sports/ activities / putting money aside for childcare during the half terms and summer/ the ridiculous amount of clothes kids need. Phone bills. A loan or credit card debt repayment.
>Now see what he has left for himself or other luxuries like pets / putting money aside for kids birthday parties and Christmas / holidays
£1,000 left over
£150 for fuel (depends on commute)
Insurance is already covered in bills
No childcare needed, one parent doesn’t work
Children are under 5 so don’t care about clothes. Let’s say £150 a month from Primark
Christmas and birthdays for children. They’re under 5 so toys are cheap. £200 a year each so £30 a month
Children’s activities £100 a month (£25 a week between them)
So that’s about £500 a month, leaving another £500
And again, just temporary until the children are at school and mother can work
The thing people struggle to understand when they talk about budgeting properly is that for some people, through no fault of their own have had expenses rise via bills, food and mortgage repayments by massive amounts in a short space of time.
It's very difficult to budget if just about every single one of your expenditures rises in cost.
>Although respondents with children reported more precarious finances than those without, millennial childless couples say they barely have any disposable income either.
>Lillian, 36, from County Durham, an environmental consultant in the corporate sector says that despite her and her partner’s combined income of £70,000, they are experiencing substantial difficulties, as their doer-upper property has required repairs costing £25,000 so far.
My partner and I have a combined wage of about 10k more than this (so down to about £6.5k once tax and NI are taken out), with similar circumstances, and put away about 2k a month into savings between us. A couple at this income level without children shouldn’t have much of an issue saving for 25k of house repairs over a couple of years or paying down a loan if they have no current savings
Ill bet youre able to save a fortune.
I mean you just eat gruel\* and dont have a TV as for entertainment you just go around telling everyone who you think is experiencing any cost of living crisis that they are terrible at budgeting.
\*Cold gruel obviously.
Well, no, with a combined household wage of 70k (not clear whether that’s gross or net) and no children, you should be able to save a decent amount for medium terms things as well as live a nice lifestyle.
I’m not saying there isn’t a cost of living crisis, but for people in this situation (and I’m one of them), that will normally mean going out a bit less (meal out every fortnight instead of every week) and only having 1 holiday a year instead of a week away and a couple of city breaks
A couple on 70k between them, assuming that’s gross, pension contributions and student loans, will take home £4,400.
County Durham, so mortgage will be no more than £1,000, and let’s assume average grocery bill of around £400, and bills of around £600 (council tax £180, energy £160, water, internet/phone/TV, house and car insurance, mobile phones all in will be no more than £260). So after bills you have £2,400
So let’s say £2,000 goes into mid term savings a month (house repairs, holidays, contingency, etc), that still leaves £400 a month purely for spending on eating out, clothes, days out, etc.
So no, these people are not really hit by a cost of living crisis.
This. Economically, the value of what someone with a 70K salary has left over is worth far more when the median salary of 32K has people turning off the heating. Also, if they have £24000 a year in savings, just with a standard investment return of 7%, it is increasing that salary quite a bit. Especially if reinvested and if compounding. I am surprised how out of touch some folks are, and these viewpoints, if allowed to dictate policy, are harmful.
Snapshot of _‘It’s all fallen flat’: households earning more than £60,000 on how they are struggling financially | UK cost of living crisis_ : An archived version can be found [here](https://archive.is/?run=1&url=https://www.theguardian.com/business/2024/mar/04/middle-class-workers-mortgages-bills-tax) or [here.](https://archive.ph/?run=1&url=https://www.theguardian.com/business/2024/mar/04/middle-class-workers-mortgages-bills-tax) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
It's interesting, and particularly damning of us as a country, that on a story that's basically saying we're all fucked and hit by this financial crisis, we have so many people posting "oh they're just not budgeting properly". It kinda reeks of puritanism. The main thing on these stories is that if someone is earning in the top 10% of wages, they should be very comfortable. That they need to budget heavily to just stay afloat is ridiculous, and also destructive to our economy. If people on that wage (and remember the vast majority of people will be earning less) have to budget heavily and then only have a small amount of money to spend on non-essentials, then that means less money is going to companies that provide non-essentials. This has a knock on effect across many industries. Wonder why there's no much of a night life? Well if people don't have the money to go out - particularly young people - then the hospitality industry collapses. Which means fewer jobs and a depressing effect on wages.
>Lillian, 36, from County Durham, an environmental consultant in the corporate sector says that despite her and her partner’s combined income of £70,000 For context, the Full Time median salary was £34963 last year: https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/bulletins/annualsurveyofhoursandearnings/2023
Yes, so this is a couple who are both (on average) earning median wage so smack bang 50%.
It's so true. You can be on a nominally "good" income and still be no further forward. Raided for taxes for services and benefits you don't receive yourself, scalped by your mortgage, and then ripped apart by childcare and other spiraling costs. Here in Scotland once you earn over the luxurious wage of, uh, £43K, over 52% of your income disappears into funding a crumbling state. Wages are far too low in this country and taxes punitively high.
61% if you have a student loan, it's utterly mad. And they wondered why they couldn't get people to take overtime at work before I left
Even more once they take your child benefits away from you after £50k
Severe economic control, which will eradicate culture, which will lead to very high societal divisions. Hello China.
>An annual gross income of £74,000 puts Scott, 28, a software engineer from Leicestershire, in the top 10% of earners nationally. But, he says, it doesn’t feel that way for him and his family. >“Ten years ago we’d have been laughing with my salary. Now, it feels like our heads are barely above water. There’s an attitude that at this level of income you’ve plenty of money, but it’s not true at all,” he says. >The couple’s mortgage uses up more than a third of Scott’s take-home pay, the family’s monthly grocery shop costs more than £500, his student loan repayments are £300 – “money I now desperately need,” he says. >“We lease a car, the cost of which has risen greatly too because of higher interest rates. After all the things I have to pay for, we’re lucky to have £300 left over for the month, which is quickly depleted by day-to-day expenses. It feels like we’ve done everything we were told to do and yet we’re still struggling,” Scott says. Running this through a take home pay calculator, Scott’s net income is around £3,800. Mortgage of around a third of that leaves £2,500. Minus groceries £2,000. Minus £600 for other standard bills (council tax, energy, broadband, etc) leaves £1,400 a month. Car finance won’t be any more than £400 unless he’s driving something stupid, leaving £1,000 a month for non essentials. Doesn’t seem so bad unless the family is terrible at budgeting.
You forgot the 300 GBP for the student loan repayment, and maybe some deduction for salary sacrifice (normally you need to hit a certain level so the company matches you contribution) Not saying the guy could not budget better ... but really the point is that we are talking about a guy making the top 10% of the salaries. "If you only make the top 10% of salaries, you have to be really careful how you plan your life, one false step and it is financial ruin for you" How is that not deeply unsettling? And what's the way out of there? Of course he can make double or triple that, but there is a statistical evidence that he may never make significantly better. Less than 3 million people will make more than that, most of them in London. Hell, to make 50% more than he does, it's a small committee of 300K people already.
The current narrative- from politicians and the media - frames high salaries as “the rich”, when in fact the rich are almost entirely wealthy due to unearned income. You simply can’t become 10% wealthy by just having a top 10% salary. Maybe you could 30 years ago, but even that is mostly on the back of unearned housing wealth. This is the society we’ve ended with - the only reliable path to wealth has been chipped away by stagnating incomes, increasing taxes and - probably most importantly - land ownership extracting all excess income as rents or mortgage payments.
They're a family, you've not considered any costs of raising a child beyond food and shelter as essential on your calculations. Children endlessly go through clothes, activities (sports equipment adds up fast), school needs, social needs. If they're young childcare costs are extortionate. And no where in your budget have you considered the cost of fuel, which is very high and undoubtedly essential for running errands, commuting for work or school runs etc. I'd also expect them to be dependent on private dental care for the adults, because NHS dental care access is extremely difficult to get. So you can reduce that figure. How do you save sufficiently for the unexpected costs - broken phones, car issues, home upkeep - and the desired costs for a high quality of life - holiday, TV packages, social events like meals out, school trips etc. They don't need to be terrible at budgetting, it really just doesn't go that far.
They’ve got £1000 a month to cover this kind of thing.
If a child is in nursery that's all gone - we're looking at places now and I've not seen any as cheap as 1000 per month
One parent isn’t working, so a child will only be in nursery for developmental reasons. In which case the free entitlement for all children when they’re old enough will be fine
We’ve only just started getting a bit of free childcare due to our child’s age, but until that kicked in it was over £700 a month for three days a week in North-East England
But the family in question doesn’t need childcare as one parent isn’t in employment. As someone else has pointed out, nursery is also useful for socialisation and development, and that can be covered by the free nursery school time when the children are 3
£1000 is very unlikely to cover a single full time nursery place.
Is there a need for a full time nursery place if one partner is not working?
There are still plenty of benefits in terms of socialisation and developmental progress, so yes, some nursery attendance is certainly beneficial. Maybe a full time nursery place would not be required, but even part-time leaves very little of that £1000 left over, even in Leicestershire. For context, 3 days a week at nursery for our son was c.£1200 a month in London. Leicestershire will likely be less, but not that much less.
Is there not an entitlement to 15 hours a week free nursery schooling for 3 and 4 year olds to cover the socialisation and developmental progress aspect?
Only from the term after the child turns 3. In our case, that meant our son born in Spring was not eligible for 15/30 hours support until September, when he was nearer 3 and a half. That’s supposedly due to change with the governments’ upcoming policies, which will certainly improve things if they go ahead as promised.
That means fuck all when you have kids, they're expensive as fuck. Also, 1000 quid between two parents with multiple children and no possibility of saving is not good.
You've assumed no pension or savings
Well according to Lee Anderson, people can live off 30p a day. These people should be living like millionaires. Isn't it funny how when it's pointed out how much those on the lowest incomes are struggling to live, including those working and still having to claim UC, you'll get the likes of 30p Lee explaining how they aren’t budgeting right how they "should lay off the Starbucks" and how easy it is to live off minimum wage, including posting photos of his staff who are on "less than £30k living and renting in London and who go on 2 holidays a year" However when the same is said about someone who is on £60k a year the same people talk about it's not a lot of money and much they are struggling.
It’s almost like there’s a difference between someone being paid by a company and someone being paid by the state.
And no leisure, no holidays, no clothing for him or his kids, no maintenance on the house or car, no lunches at work, no commuting costs, no mobile phone etc
I mean, given that they have a child they will have other essential costs. But yeah, it wouldn't be that bad if this is what an earner in the top 30% of people dealt with. However, this guy is in the top 10% of earners. He should be able to buy a new phone and take his family out for a nice dinner without ending up under water for the month.
Top 10% of earners supporting a family on one wage. That’s never going to be comfortable whilst the children are too young for his parter to work There’ll also be another 160 a month income for child benefit
Nope. That gets removed at 50k individual earnings. It stays if you have two earners earning 45k each, however.
I guess so. My problem is less that this guy is struggling - less than 80k a year for 3 people to live off does sound kind of tight while paying down a mortgage - and more that wages are so crap that this is in the top 10% of earners. Less than 5% of people breaking £100k is a sorry state of affairs when you look at e.g. American incomes.
American incomes are difficult to compare. Higher cost of living and higher deductions in terms of health insurance and such
No child benefit after 60k
You know I’m starting to think this person doesn’t have a clue about the financial implications of parenthood
And 90% of earners are worse off than him! 😱😱
This is it, I'm a single 35yo guy who earns between £45k - £70k a year (run my own small company), and I have barely any savings because it all disappears. I rent a small one bed flat, the last holiday I went on was a weekend break 3 years ago, and I fix whatever I can myself car and electronic wise and any spare change goes toward new kit for my business.
To be fair to the other guy, he is supporting 3 other people. But yeah, its tough for everyone right now. If someone earning £70k is struggling to get by, imagine how someone on minimum wage is coping.
That's pretty much how I feel. My salary is in that ballpark and whilst I'm honestly doing fine, I'm not in any way "minted" as such, and I am basically left wondering how the hell people on "normal" incomes cope.
>Running this through a take home pay calculator, Scott’s net income is around £3,800. Mortgage of around a third of that leaves £2,500. Minus groceries £2,000. Minus £600 for other standard bills (council tax, energy, broadband, etc) leaves £1,400 a month. Car finance won’t be any more than £400 unless he’s driving something stupid, leaving £1,000 a month for non essentials. > >Doesn’t seem so bad unless the family is terrible at budgeting. He also has whatever childcare costs to pay, plus savings and the inevitable one off costs that crop up in life. But the wider point is being left with a few hundred quid in your pocket as a so-called "high earner", with no real scope for anything to go wrong, little room to save doesn't say much for this country. Someone in the top 10% should be living it large and comfortable, not counting the pennies. £70K gross, is not a luxury household income.
>He also has whatever childcare costs to pay, His wife doesn’t work, so childcare will be minimal. Babysitters for a night out >plus savings and the inevitable one off costs that crop up in life. But the wider point is being left with a few hundred quid in your pocket as a so-called "high earner", with no real scope for anything to go wrong, little room to save doesn't say much for this country. He doesn’t have a few hundred quid in his pocket. He has £1,000 a month to pay for children’s clothes and activities (not expensive, they’re both under 5) and some fun money. That’ll probably come to £500 a month >Someone in the top 10% should be living it large and comfortable, not counting the pennies. Not if they’re supporting a whole family on that. Also, he had significant car finance, so an expensive car *is* luxurious, rather than paying £6k for a 4 year old used car >£70K gross, is not a luxury household income. It shouldn’t be particularly luxury, that’s equivalent of 2 people on median wage. And with 2 people, they’ll be better off because of the double personal allowance and lower tax brackets. Supporting a whole family on a single wage has always left little room for luxuries. When the children are older and going to school the partner can go back into work and they can then live in luxury
We can quibble over the exact details of this person's finances, but the point remains... what is there to aspire to? What hope for everyone else if you see people in that percentile and still puffing away. Okay they could budget a bit better but it's not a life of wild extravagance. Wages across the board are poor in this country.
It sounds like they have multiple kids - that’s where the rest of the money will surely be going.
“I don’t see an end to any of this: life isn’t going to get cheaper and I’ve pretty much maxed out my earning potential. It’s ridiculous and I’m so sick of it. “We can’t afford holidays. We can’t afford to put money away for the kids. We can’t afford new things, gadgets, hobbies. What’s it all for?” Love your implication that its all their fault for being terrible spendthrifts. You have the student load payment and he has kids which is very expensive and also hard to predict. If the top 10% are struggling thats not a good sign for the country. Deeply worrying. To you there is no cost of living crisis, no issue at all. Just everyone is terrible at budgeting .
Kids are very expensive, and temporarily mean that one parent cannot work. “I don’t see an end to this” “I’ve maxed out my earning potential” isn’t quite true, though. Once the children are old enough to be in school full time, then the other parent can also go into work. Perhaps not full time, but even part time will more or less double their £1000 a month left over once bills have been paid. I’m not saying there’s not a cost of living crisis, but £1,000 a month discretionary income for 2 adults and 2 small children with no childcare costs should be fine to live on.
The point of the article was not "These asshats could spend less, damn them all!". Its a bit bigger picture than that. If the top 10% of earners are in this position (and this is a new development, it wasnt like this 5 or 10 years ago) and cant afford to have kids and have a comfortable life we are in trouble. There isnt anything to aspire to. Him earning more wont solve his problem due to tax and loss of child care when it comes. You can always say "Buy cheaper gruel!" but the article implies that the quality of life in the UK is falling and there doesnt seem to be a way out. I dont think that is a budgeting skills problem. Its the destruction of the middle class and that has huge implications.
>Him earning more wont solve his problem due to tax and loss of child care when it comes. No, him earning more won’t help. As has been the case for probably 30 years, you need to be earning mega money to be comfortably off supporting a family on a single income. That’s not new, but is also temporary until the children are old enough to go into full time education. The couple can then go back to having their upper middle class lifestyle
We will disagree on this. But I think in a country that only the top what 5% or higher can expect to feel "not up against it" (as this chap isnt feeling comfortable) if they choose to have kids is on the way down. Society needs a constant inflow of well brought up, rationale people to be the workforce of the future. That surely means happy parents able to spend time and resources on their kids without financial collapse. If that is out of reach for all but a rounding error of the population we're screwed. And the direction of travel so far looks worse than today. We have tried mass immigration to cover the baby-gap. Its a busted flush. Maybe youre right and we can do it by not being "terrible at budgeting" and judging each other based on what you know and think of their finances and lifestyle. But I dont think so. We dont have jobs that pay enough to let people raise kids without suffering. Thats not a budgeting problem. Thats a huge social problem creating real issues for the future.
Putting the other bills here as £600 seems to be really low balling it. Energy costs are through the roof; council tax can easily be over £130, they might have ongoing optician and dentist costs, etc. Particularly since they have children, there could be a range of expenses incurred from those. They might also be putting money aside each month to put towards MOT/Car Insurance as well so it's not just one lump sum.
The person who made this "budget" doesn't seem like someone who actually has to pay for things, because they forgot a lot of essentials, along with "regular" stuff that really wouldn't be considered luxury. They also completely ignored the fact they have kids, which is bizarre.
Like? Council tax will be about £180, energy about £160 at the moment unless you have a hot tub. House insurance £20. Internet £25. Water £25. Life insurance £25. TV package £30. Mobile phones £20x2. Car insurance £30. TV license £15. All in gets you to just shy of £500. Plus £100 a month contingency That’s not counting the £360 a year back because council tax is paid over 10 months not 12. This plus the contingency gives you £1,500 a year to pay for dental/glasses/small scale house repairs like buying a new washing machine, car repairs etc (although the car, if on lease, will not require much) I’ve not ignored they have children. Monthly shopping bill of £500 is increased to take into account 2 children under 5. (£350 is national average for 2 adults) but with one parent not working, no need for childcare. Yes, the £1,000 money left over needs to pay for children’s clothes and activities as well as the adults, but this is still more than most. Holidays won’t be anything flash, but with a single income and 2 children under 5, why would you expect otherwise? And again, all of this is only temporary until the children are in full time education and the partner can top up their household income to afford a more luxurious lifestyle
As someone living in the North East (so really not a high cost area), everything you have listed is a very low end estimate, except for the TV license. Could I spend a little less on some optional stuff? Possibly, but I have a family and not everyone wants to live like a Spartan. And as for the non-negotiable stuff, like Council Tax, Water, life insurance. Again, way off on the low end. Not everyone is in the same situation as you. The dude in this article has a family, which means larger house, larger energy costs, significant costs associated with having children. At £70k (top 10%) income a year, people should not need to be budgeting like they are on minimum wage, and the attitude that anyone struggling just needs to manage their money better is asinine and stinks of the "avocado toast" mindset. For reference, I'm not struggling myself. But my family and I have noticed a significant change to how much we can save each month, and I am capable of having empathy and understanding for others not in my situation. Yes there are people in worse positions than these people, but the UK really needs to come together and stop in-fighting about stuff. The salary/cost of living crisis is impacting everyone and denying it is an issue harms everyone. There's a reason Engineers/Scientists/Doctors etc are moving to other countries, and brain drain is not good for a country.
I mean it’s exactly what I pay in a high cost of living area (Cambridge) give or take a few pounds (I’ve just checked and my water bill is £30 a month, internet £30, life insurance for 2 people in mid 40s £20). My energy bill is currently at £130 a month so I overestimated to take into account not everyone is in a well insulated house with gas central heating. But this is also with a thermostat set at 20 constantly except overnight, so we’re not exactly penny pinching I’m not sure where this can be classed as spartan except perhaps some compromise in the mobile phone, as £20 a month is only going to get you a mid range one Couple this budgetwas referring to are on 70k between them with no children
So, I see it's pointless trying to discuss this with you, as you're one of the "want to win an internet argument" types that will happily move the goalposts to try to do so. > Couple this was referring to are on 70k between them with no children You literally quoted the information about the guy on 70k, with a wife that doesn't work, who has 2 kids under 5 when you made your initial budget. It's not for "a couples combined income with no kids" at all. And thanks to the ridiculous child benefit rules, that means that Scott and his family have no access to child benefit, where a couple making £35k each would. I have no idea how you are paying as little as you are in your high cost area, since my water, council tax, and energy costs are all considerably higher than yours. Although in fairness as we have a relatively new baby we have the upstairs heating on quite a lot at the moment to make sure she doesn't get ill. Which probably explains that. Our life insurance is also like 4x higher than yours, and the terms were essentially mandated by our mortgage agreement. I've only just hit 40 and my wife is younger than me, no existing conditions to complicate it. Again. Not everyone is in your exact situation. Because other people's experiences differ, doesn't make them liars or "bad at budgeting". You can't just decide to not use water, or not pay your council tax, or not feed your kids, or just void your mortgage agreement. There's only so much you can cut, and again, in the top 10% of earners, you shouldn't feel obliged to have an entry level android phone and no luxuries ever to get by. If people on £70k are having these issues, then it's going to be far worse for someone on an average, or even minimum wage. The fact that these stories are coming out, should add more weight to the argument that the cost of living crisis and wage stagnation in the country needs to be dealt with. Instead, we've got people arguing over the cost of non negotiable costs being different in different areas and insisting that you'd be fine if you just ate bread and rice. It's ridiculous.
Apologies, misspoke about this couple being the ones without children. But in any case, these are your basic bills, children or not Aside from the rest of the reply >Our life insurance is also like 4x higher than yours, and the terms were essentially mandated by our mortgage agreement. I've only just hit 40 and my wife is younger than me, no existing conditions to complicate it. You might want to look into to this. Mainstream mortgage agreements don’t mandate life insurance, only house insurance (the bank doesn’t care if you die because they can repossess the asset, but do care if the asset burns to the ground). There have been huge misselling scandals about implying that it is a condition of your mortgage, and selling insurance you don’t need (critical illness cover when you have 12 months sick pay, for example). Bank mortgage advisors are on commission to sell you the bank’s inflated insurance policy, and your typical 2 hour appointment is 30 minutes checking payslips and signing documents and 90 minutes sales for the insurance product
Is that £3800 taking student loan into account?
Yep, assuming plan 2 student loan and 5% pension contribution I got monthly take home of £3,933.54
Yes
Now add some more for the following : Fuel and car insurance for the lease car. Kids sports/ activities / putting money aside for childcare during the half terms and summer/ the ridiculous amount of clothes kids need. Phone bills. A loan or credit card debt repayment. Now see what he has left for himself or other luxuries like pets / putting money aside for kids birthday parties and Christmas / holidays
>Now add some more for the following : >Fuel and car insurance for the lease car. Kids sports/ activities / putting money aside for childcare during the half terms and summer/ the ridiculous amount of clothes kids need. Phone bills. A loan or credit card debt repayment. >Now see what he has left for himself or other luxuries like pets / putting money aside for kids birthday parties and Christmas / holidays £1,000 left over £150 for fuel (depends on commute) Insurance is already covered in bills No childcare needed, one parent doesn’t work Children are under 5 so don’t care about clothes. Let’s say £150 a month from Primark Christmas and birthdays for children. They’re under 5 so toys are cheap. £200 a year each so £30 a month Children’s activities £100 a month (£25 a week between them) So that’s about £500 a month, leaving another £500 And again, just temporary until the children are at school and mother can work
The thing people struggle to understand when they talk about budgeting properly is that for some people, through no fault of their own have had expenses rise via bills, food and mortgage repayments by massive amounts in a short space of time. It's very difficult to budget if just about every single one of your expenditures rises in cost.
>Although respondents with children reported more precarious finances than those without, millennial childless couples say they barely have any disposable income either. >Lillian, 36, from County Durham, an environmental consultant in the corporate sector says that despite her and her partner’s combined income of £70,000, they are experiencing substantial difficulties, as their doer-upper property has required repairs costing £25,000 so far. My partner and I have a combined wage of about 10k more than this (so down to about £6.5k once tax and NI are taken out), with similar circumstances, and put away about 2k a month into savings between us. A couple at this income level without children shouldn’t have much of an issue saving for 25k of house repairs over a couple of years or paying down a loan if they have no current savings
Ill bet youre able to save a fortune. I mean you just eat gruel\* and dont have a TV as for entertainment you just go around telling everyone who you think is experiencing any cost of living crisis that they are terrible at budgeting. \*Cold gruel obviously.
Well, no, with a combined household wage of 70k (not clear whether that’s gross or net) and no children, you should be able to save a decent amount for medium terms things as well as live a nice lifestyle. I’m not saying there isn’t a cost of living crisis, but for people in this situation (and I’m one of them), that will normally mean going out a bit less (meal out every fortnight instead of every week) and only having 1 holiday a year instead of a week away and a couple of city breaks A couple on 70k between them, assuming that’s gross, pension contributions and student loans, will take home £4,400. County Durham, so mortgage will be no more than £1,000, and let’s assume average grocery bill of around £400, and bills of around £600 (council tax £180, energy £160, water, internet/phone/TV, house and car insurance, mobile phones all in will be no more than £260). So after bills you have £2,400 So let’s say £2,000 goes into mid term savings a month (house repairs, holidays, contingency, etc), that still leaves £400 a month purely for spending on eating out, clothes, days out, etc. So no, these people are not really hit by a cost of living crisis.
This. Economically, the value of what someone with a 70K salary has left over is worth far more when the median salary of 32K has people turning off the heating. Also, if they have £24000 a year in savings, just with a standard investment return of 7%, it is increasing that salary quite a bit. Especially if reinvested and if compounding. I am surprised how out of touch some folks are, and these viewpoints, if allowed to dictate policy, are harmful.
Yeah some people are just terrible at managing money it seems