2.5 Million Families on £100k/year Don't Feel Rich

mitchaa

I suppose wealth depends on your age and what stage of life you are at. Are you young or old, mortgage or mortgage free, the Waltons or childless?

We are both 26 and in that expensive stage of our lives at the moment, young child with high childcare costs and new to the property ladder with a large mortgage.

On the other hand, we could be in our 50's, mortgage free and childless enabling our income to go a hell of a lot further.

There's also a big difference (career wise) in a couple earning £100k apiece to that of someone earning £100k singularly. I could only ever dream of earning a 6 figure salary, It's just not going to happen. Combined however, we get pretty close and as before it's enough to live comfortably but certainly not extravagantly.

Should be categorized as..

Poor
Average
Comfortable
Wealthy
Rich

And i would say a £100k household income is comfortable

Pobby

I started a thread a while ago, possibly on DT. It was along the lines of if you excluded mortgage/ rent and council tax, what would be a comfortable amount to live on. I was amazed at how diverse the answers were. I think it went from £500 per month up to about £2,000.

Conrad

PasturesNew wrote: »

But still, £100k for a household is probably higher than 90% of others.

This is a myth.

Most years we earn over £100k and yet we are right on the bottom rung compared to the rest of the people around us. Ok I live in a prosperous South East village, but there are hundreds of these villages in all directions taking in tens of thousands of people. I could take you on a drive for thirty miles in one direction and show endless large homes. Sure some will be living on credit, but most wont and many have huge inheritances in the pipe anyway.

As I always say a lot of income is hidden plus there is an awful lot of old money around - tied up in farms and big property, that can be and is released via developments etc.

Conrad

And to add, even if you take a seemingly down at heal place like Barking, take a drive round the back roads and there are plenty of £600k+ homes and these go on and on into large parts of Romford, Stanford le hope, onto chigwell, loughton, buckhurst hill, epping, back down to harold wood etc etc etc. Then bare in mind a lot of people have the villa abroad also. Seriously, wealth abounds.

mitchaa

movilogo wrote: »

PS: I too didn't expect so many £100k/yr earners in MSE forum!

Remember this discussion is household income, I dont think there will be too many earning 6 figure salaries singularly.

Braveheart100

Conrad wrote: »

This is a myth.

Most years we earn over £100k and yet we are right on the bottom rung compared to the rest of the people around us. Ok I live in a prosperous South East village, but there are hundreds of these villages in all directions taking in tens of thousands of people. I could take you on a drive for thirty miles in one direction and show endless large homes. Sure some will be living on credit, but most wont and many have huge inheritances in the pipe anyway.

As I always say a lot of income is hidden plus there is an awful lot of old money around - tied up in farms and big property, that can be and is released via developments etc.

I earned £150K + singularly (my wife is a SAHM) last year and I don't feel in the slightest bit rich either. I live in the SE, my kids don't go to private school and I drive a 10 year old car. There are loads of people around me who seem to have more money than me....no idea what they earn.

I never inherited a penny, so I've had to strart from scratch. I've paid off my mortgage recently so maybe I'll begin to feel rich in the future

ukcarper

I would say someone earning 6x average salary is rich whether they think it or not

trumpton

I have a nice house, no money worries, reasonably good health. I have a lovely OH and two happy, healthy children. I feel pretty rich.

kennyboy66_2

DD5 wrote: »

You could just work within a limited company and pay hardly any tax. I used to pay myself a £12k salary on which I paid tax and national insurance. I then paid the rest in dividends, which were tax free up to the 40% tax threshold and I think they were taxed at 25% above that threshold.


I'm currently working within a normal job and so I can't shield my income via a limited company, however I still shield all of my savings from the tax man by investing in pensions, ISAs and saving within my mortgage offset account, all of which are tax free. Once you learn to tighten up your finances, you rarely let them lapse again. I'd imagine a lot more people will be learning these lessons over the coming years.

This is a bit of a myth, there are real net savings but you save by not paying employers national insurance (and a small bit of employees).

The total corporation tax (paid by the limited company) and additional income tax is higher for a Dividend payment than the income tax on PAYE (assuming a higher rate tax payer).

The total tax charge for a £10k additional dividend done through PAYE for a higher rate tax payer in a limited company is roughly 48% (NI, Ers NI & PAYE). the comparable figure is about 41% for a dividend via a Ltd company (corp tax plus income tax).

A saving all the same but you can't get away from paying most of the tax owed.

mitchaa

Braveheart100 wrote: »

I earned £150K + singularly (my wife is a SAHM) last year and I don't feel in the slightest bit rich either. I live in the SE, my kids don't go to private school and I drive a 10 year old car. There are loads of people around me who seem to have more money than me....no idea what they earn.

I never inherited a penny, so I've had to strart from scratch. I've paid off my mortgage recently so maybe I'll begin to feel rich in the future

There can't be many jobs paying that kind of salary, what do you do for a living? GP with own practice? Banker? Managing director of a worldwide company?

Why do you drive around in a 10yr old car when you have £7-8k hitting the bank account every month? Safety concerns would be my first thought, did they even NCAP test cars 10yrs ago?