What is a good salary?

[bluesince76]

It also depends where you live, 100k goes nowhere in the home counties or Oxfordshire, in greater Manchester it goes much further.

Being well off is subjective and as you earn more, you can start to get tunnel vision when comparing your life to that of others, only seeing those who have more disposable income and not seeing those who are living hand to mouth.

It does come down to what you need to live happily and the less that is, the easier everything else becomes.

Because I'm sad, I've now got monthly spending info for the last 3 tax years. That's mainly been done so I understand what needs to be in our pensions, but has given a good insight.

There's 4 of us living at home, 1 in senior school and another who's working and therefore buys their own clothes but uses food, electricity etc. So nowhere near as expensive as nurseries but a teenage lad eats more than a toddler.

Excluding mortgage, we 'spend' about £3k a month. I say spend, as that includes some short term savings to pay for annual holidays, something for DIY, savings for both car repairs and liner term replacement etc. That figure doesn't include money into pensions, ISAs etc, as that's just to build up the pot for future spending.

I think we live pretty comfortably and don't feel we miss out on anything we want to do. We could definitely live on less and could definitely spend more (the car is 12 years old, don't have Sky Sports or an iPhone on contract), but that figure feels about right. Add a mortgage/rent in, and it becomes more like £4-4.5k a month, which would mean a single salary of about £65k, slightly less for joint salaries due to tax savings but around twice the average salary.

I would expect that our standard of living should be achievable for a single earner, earning slightly above the average, so say someone on £45-50k, but it's a way off that. Think that's mainly a reflection of how bad wages in the UK have become. I'm just reading a NYT article about them offshoring jobs to the UK and it gives the example of a software developer in Cleveland, one of the poorer areas of the US, with an average salary of $124k, compared to London where the same job is $80k. Unless we fix that, those in private sector jobs will rely on handouts, which increases taxes and forces public sector pay lower.

At least we've got brilliant public services, the rivers are spotless, the roads pristine...

 

[Betterdeedthan red]

same here, mortgage is a little lower however. I've no kids so will one day in hte next 10 years look to sell up, move abroad and rent for the remainder of my days and maybe freelance a few days per week to keep some income. Currently 46 but hope to retire by 55. Hopefully...

Similar.
I'm 47 .
I'd love to sell up and live in the gambia

 

[Kompany Car]

Because I'm sad, I've now got monthly spending info for the last 3 tax years. That's mainly been done so I understand what needs to be in our pensions, but has given a good insight.

Dont worry I'm equally as sad with my spreadsheets and retirement cash flow planning. My brother who's retired, keeps telling me I dont need anything near as much as what I'm calculating is needed, but I've always been the type of person who tries to make sure all eventualities are covered.

 

[Phil1]

Similar.
I'm 47 .
I'd love to sell up and live in the gambia

I’m halfway through the process at the same age.
Just going to leave myself a couple of properties as rental income but all business interests are getting sold off.
Be sailing off into the Mexican sunset within 18 months never to return.
Still at the stage of haggling with the vendor selling the place I’m after over there but once my offer is accepted i’m all set to start the process.
I know how much I need to live an extremely comfortable life over there and it’s much less than you’d expect.

 

[bluesince76]

Dont worry I'm equally as sad with my spreadsheets and retirement cash flow planning. My brother who's retired, keeps telling me I dont need anything near as much as what I'm calculating is needed, but I've always been the type of person who tries to make sure all eventualities are covered.

I started with a 4% SWR, then changed it to 3.5%, then decided to add 20% to my income requirement, just in case. And have excluded state pension, just in case it goes.

Wouldn't mind, not sure I fancy retirement anyway!

Most likely the kids are going to be able to get a very good holiday/car/house at my expense when the time comes.

 

[SkyBlueFlux]

Better to have one person on 60k and partner on 40k than an individual on 100k. Once you get above 100k then its a marginal tax rate of 60%, so for every pound earned 60p goes in tax.

It also depends where you live, 100k goes nowhere in the home counties or Oxfordshire, in greater Manchester it goes much further.

Being well off is subjective and as you earn more, you can start to get tunnel vision when comparing your life to that of others, only seeing those who have more disposable income and not seeing those who are living hand to mouth.

It can actually be far worse than 60p. If you have student loans, graduate loans (the things I needed to get a job in that pay band), then the effective rate you are paying is:

40% income tax
20% personal allowance clawback
9% student loan
6% graduate loan
3.25% NI
= 78.25%

If you lived in Scotland, then in April with the new bands that will be 83.25%. So the difference between earning £100,000 and £125,000 is actually just over £4k in your pocket, if you pay into a pension it would be less.

Naturally people will say "well if you're earning that much you can pay off your student loans". Forgetting that many these days have loans in excess of £70-80k and climbing with ridiculous rates of interest every year.

Quite rightly, I would never say somebody earning at that level is not comfortable. You would be very comfortable, providing you don't have kids or something like a mortgage that's beyond your means. The big problem I have with this is it's effectively a huge fiscal drag on people who don't come from a wealthy background.

If you are working class and do well for yourself, there is this pretty substantial affluence barrier that those from wealth don't have to worry about because they don't carry around these whacking great student loans. It's yet another thing that exacerbates the lack of social mobility in this country.

 

[bluenova]

same here, mortgage is a little lower however. I've no kids so will one day in hte next 10 years look to sell up, move abroad and rent for the remainder of my days and maybe freelance a few days per week to keep some income. Currently 46 but hope to retire by 55. Hopefully...

I thought I was really lucky as I work in publishing so have a mix of passive income, and freelance stuff that I can do as much or as little as I want, and nobody has a clue where in the World I am.

AI is already fucking up much of it, and I can see it taking most of my work well before I get to retire.

 

[oldius]

My Irish passport is on the way, and having already lived and worked abroad, I will do the same: the relationship between pay and cost of living is too skewed in the UK, IMO.
My lad is now living and working in China. He is a new graduate on a 35k equivalent salary in a major city. His rent on his lakeside apartment is £300 a month. He eats out for £3, but gets all his meals provided by his employer. In five months he has spent under £100 on bills.

 

[denislawsbackheel]

Not that different to this country.

People who work and don’t have kids pay and pay and pay and are entitled to fuck all.

It feels that way at least being in the “squeezed middle”.

Poor poor you.
Nothing worse than high rate tax payers whining.

 

[Kompany Car]

It can actually be far worse than 60p. If you have student loans, graduate loans (the things I needed to get a job in that pay band), then the effective rate you are paying is:

40% income tax
20% personal allowance clawback
9% student loan
6% graduate loan
3.25% NI
= 78.25%

If you lived in Scotland, then in April with the new bands that will be 83.25%. So the difference between earning £100,000 and £125,000 is actually just over £4k in your pocket, if you pay into a pension it would be less.

Naturally people will say "well if you're earning that much you can pay off your student loans". Forgetting that many these days have loans in excess of £70-80k and climbing with ridiculous rates of interest every year.

Quite rightly, I would never say somebody earning at that level is not comfortable. You would be very comfortable, providing you don't have kids or something like a mortgage that's beyond your means. The big problem I have with this is it's effectively a huge fiscal drag on people who don't come from a wealthy background.

If you are working class and do well for yourself, there is this pretty substantial affluence barrier that those from wealth don't have to worry about because they don't carry around these whacking great student loans. It's yet another thing that exacerbates the lack of social mobility in this country.

Whilst as you say, people are hardly poor at those income levels, it’s also the salary point where people aren’t senior enough to get grant date value options or LTIPs as part of their remuneration. So it’s not surprising that most people just stick it in their pension to mitigate the tax.