Is £70,000 a year rich?

Wednesday, June 21st, 2017 03:35 pm
miss_s_b: (Fangirling: Arachnia Janeway)
[personal profile] miss_s_b
I think the argument boils down to two things: what you earn, and what you picture in your head as a rich person's lifestyle.

£70,000 is in the 95th percentile for personal income. This means that if you earn £70,000 you earn more than 94% (or thereabouts) of people. If you're earning more than 94% of your fellow countrymen, you ought to be rich, right? Like, if you're better off than the vast, vast majority of people, you should feel well off, or else how must the poor buggers on less than you feel?

The problem is, of course, that £70,000 doesn't actually buy that much these days. Like, it won't get you a mortgage on a decent house anywhere in the home counties. It won't buy you a new car and a couple of holidays every year after housing costs. It won't pay school fees for your little ones to go to private school once you've paid for housing costs either. £70,000 a year doesn't feel rich; and that's what the problem is.

If you look at the lifestyles our parents had, well, this is what my parents did in the 80s:
  • owned a home
  • bought a new car every two years
  • didn't go on foreign holidays but DID send me to private school
  • were in the pub three nights a week
etc., etc.

Now, I'm not saying they didn't work for that: they did. My dad had two full time jobs (mild mannered biology teacher by day, superchef by night) and my mum worked 9-5 too. They worked bloody hard. But the same amount of work in the same jobs these days would get you, if you were lucky:
  • a rented house that is one of three poky little Barratt boxes built in the back garden of the kind of house your parents owned
  • a second hand banger that you run till it dies, or a bus/rail pass
  • a cheap holiday for now, but only until brexit happens and then we have to pay visa fees and the exchange rate is knackered and oh look we can only afford Butlins
  • Pre-loading because the pubs are so bloody expensive, thank you alcohol duty escalator
Now most of the people I see arguing about this are either saying "£70k is mega rich, you're in the 95th percentile FFS" or "£70k is not that rich when you consider what you can buy" but not many are following both thoughts through.

How bloody scandalous is it that even if you're in the 95th percentile you are still struggling, and you are well worse off than your parents would have been on an equivalent income adjusted for inflation etc.? If 95% of the country is not getting a good enough income, that's a bloody disgrace and somebody ought to do something about it.

Anybody know any politicians?

Date: Wednesday, June 21st, 2017 03:59 pm (UTC)
legionseagle: (Default)
From: [personal profile] legionseagle
I thought the best riff off this was in Lost in Austen when the heroine Amanda absentmindedly mentions her salary (which puts her as "white collar scraping by for London" and Lady Catherine or whoever practically faints.)

Part of the problem is also the cumulative effect of middle-classness. That is, if you have been middle-class since forever there's often an accrual of loot (houses inherited or bought out of inheritances) and people who became middle-class in the previous generation just got on that escalator, but their offspring have fallen off it, so it looks like failure.

Date: Wednesday, June 21st, 2017 06:04 pm (UTC)
hilarita: trefoil carving (Default)
From: [personal profile] hilarita
True. Also, geography really matters. If I were living where my parents live, I could (just about) afford a mortgage *on my own*. I could certainly trivially afford it with my partner. That would put us as comfortably middle class. However, I live somewhere much, much more expensive, so my 50th percentile-ish income looks rather indifferent. However, I have far more job opportunities in the expensive south, compared to the cheap Midlands. There's something deeply fucked up about being able to afford a house if only you could get a job, or having a good job but being unable to afford a house. I mean, both sets of my grandparents could afford houses (eventually), despite being working class.
And I can only afford a nice lifestyle courtesy of the NHS. If we had an insurance-style system, I'd be completely Doooomed, what with lifelong conditions for which I take Quite A Lot of medication...

Date: Thursday, June 22nd, 2017 08:47 am (UTC)
po8crg: A cartoon of me, wearing a panama hat (Default)
From: [personal profile] po8crg
And if you'd inherited a house from your grandparents, you'd be very comfortable indeed.

One reason that non-London cities are good places to live is that the house prices are affordable at the salaries available - I bought a two-bedroom flat within walking distance of my office on an ordinary mid-ranking programmer's salary and can afford a decent holiday every year.

Date: Wednesday, June 21st, 2017 04:33 pm (UTC)
lilysea: Serious (Default)
From: [personal profile] lilysea
I think it also depends on what your outgoings are.

I remember when I was earning a decent salary[1] by Australian standards, but between regular physiotherapy appointments [plus sleep Dr for sleep apnoea and sleep apnoea equipment; and lots of GP visits with big out of pocket gaps per visit; and Ear Nose Throat surgeon for sleep apnoea, and Dermatologist for really bad psoriasis, and...]

and regular psychologist appointments and rent on a small, somewhat run-down flat (Canberra has expensive rents), I was barely scraping by.

[1] Around $50,000 AUD to $55,000 AUD per year, which converts to 29,790 GBP to 32,770 GBP.
Edited (clarity) Date: Wednesday, June 21st, 2017 05:48 pm (UTC)

Date: Thursday, June 22nd, 2017 04:16 am (UTC)
lilacsigil: 12 Apostles rocks, text "Rock On" (12 Apostles)
From: [personal profile] lilacsigil
Yes, and the gaps in the NHS are getting vastly bigger. In my first bout with cancer, I ended up something like $500 out of pocket over 18 months. Bulk-billing GP, low or no co-pays on the eleven trillion scans I had, and small co-pays on the visits to multiple specialists. Ten years later, I was $140 out of pocket to see a single specialist, $55 out for every ultrasound, and $25 out for every GP visit. The CAT scan was over $100, too. Blood tests and biopsies were bulk billed, at least. It's a huge burden on those least able to pay, and many places, especially in rural areas, don't bulk bill.

Date: Friday, June 23rd, 2017 09:01 am (UTC)
lilacsigil: 12 Apostles rocks, text "Rock On" (12 Apostles)
From: [personal profile] lilacsigil
The sad thing is that it was entirely based on the NHS and up until the early 2000s it was working pretty well, with the exception of dentistry. Unfortunately, that's when the federal government started to starve it for funds, and at the same time funded private healthcare, and we all know how that story goes.

Date: Wednesday, June 21st, 2017 07:29 pm (UTC)
flaviomatani: (OBrien1984)
From: [personal profile] flaviomatani
Although I hear they're increasing the chocolate ration from 75g to 50g, so not all is bad, Winston...

Date: Wednesday, June 21st, 2017 11:27 pm (UTC)
alatefeline: Painting of a cat asleep on a book. (Default)
From: [personal profile] alatefeline
I appreciated the way you laid this out. Thank you.

Date: Thursday, June 22nd, 2017 02:12 am (UTC)
rosefox: Green books on library shelves. (Default)
From: [personal profile] rosefox
and somebody ought to do something about it

If only half the population were excluded from the workforce and we could get a huge productivity boost by bringing them in! Unfortunately that trick only works once. :/

Date: Thursday, June 22nd, 2017 06:29 am (UTC)
almostwitty: (Default)
From: [personal profile] almostwitty

I remember begging my parents for two video recorders back in the 1980s, which probably cost about £300 each.

If my kid went begging to me for two games consoles costing a total of £600, I'd laugh him out of the room.

(And my parents worked far harder and ruined themselves than I do in my comfy air-conditioned IT job)

Date: Thursday, June 22nd, 2017 09:44 am (UTC)
anisiriusmagus: (Default)
From: [personal profile] anisiriusmagus
Thanks for posting this. I don't think enough is made of the increasing divide between the "haves" and the "have nots", and although I'd love to see how I'd get on with £70,000 a year, I'll never be able to hope of earning/being paid that. I also appreciate how that amount still does not make you "rich".

I don't know what the answer to this is, and I wish I did. SG and I don't work any less hard than our parents, but by what seems like sheer luck of when they were born/grew up, they've had more opportunities than we'll ever have. I know that's not their fault any more than it is ours, but it is maddening.

I take each day as it comes, and appreciate what I do have to try to keep things in perspective.

Date: Thursday, June 22nd, 2017 10:31 am (UTC)
cesy: "Cesy" - An old-fashioned quill and ink (Default)
From: [personal profile] cesy
Thank you, this is a good summary of both sides - £70k is mega rich compared to average, and yet not rich in that you can't buy much, and that sucks.

Date: Thursday, June 22nd, 2017 01:33 pm (UTC)
danieldwilliam: (seven legged spider)
From: [personal profile] danieldwilliam
I agree with this and the commentators who point out that whether £70k feels rich depends on your outgoings, whether you already own your own home, where you live, are you single with four kids and a parent who had dementia or in a partnership with no kids.

And you are right, it's not a great sign that even someone earning in the 95th percentile might still feel under financial pressure and that would not be unusual.

I think there are some other considerations. Firstly, I think a lot depends on what the source of the £70k income is. If you have £3.5m in cash tucked away in a gilts that's a different experience than if you are GP or a headteacher or a professional on a partnership track.

There's also for me a question about what we mean by rich rather than affluent or financially independent. For me rich means the abiltiy to exert political influence in your community because of your wealth, even if that's on relatively modest scale of being able to easily contribute £50k to pay for the refurbishment of the local church hall. I'd describe someone earning £70k from employment as affluent and someone who had investment income of £70k as financially secure, perhaps rich.

Date: Friday, June 23rd, 2017 03:20 pm (UTC)
vampwillow: I don't have time for this SH*T! (sh*t)
From: [personal profile] vampwillow
I've been rich* and I've been poor** and I know which I prefer... but yes, it is the comparative thing which makes the difference. When I was on {a nice little earner with low outgoings} I was happy to pay for others who had less; it felt right and made me happier that there was some benefit to it *even though* in the larger scheme of things my nlewlo was actually less moolah than other companies paid for the same task set. In a similar manner, even though I'm now solely in receipt of ESA (support) I can continue to manage *because* I have low outgoings, haven't got kids or other dependents, and haven't had a holiday for around 20 years.

* fsvo. I had two jobs where salaries were £75k package (55k basic) and £90k package (80k basic) but between them they only lasted four months (meh.)
** zero income from _any_ sources for about two years, living off of savings then credit cards. Needless to say that all ended when I declarated bankruptcy. NOT a recommended option, btw.

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