‘Everything has plummeted’: Families earning over £60,000 hit by financial hardship

Scott, a 28-year-old software engineer from Leicestershire, earns a total annual income of £74,000, putting him in the top 10% of earners nationally. But he and his family didn’t feel that way, he said.

“Ten years ago, we would have laughed at my salary. Now, it feels like our heads are just above water. There is a perception that at this income level you already have a lot of money, but that’s simply not true,” he explain.

The couple’s mortgage accounts for more than a third of Scott’s take-home pay, the family’s monthly grocery bill is more than £500 and his student loan repayments are £300 – “I desperately need the money right now ,”He said.

“We rented a car and the cost of the car had increased significantly due to rising interest rates. We were lucky to have £300 left this month after everything I had to pay, but that was quickly used up by day-to-day expenses . It feels like we’ve done everything we’ve been told to do, but we’re still struggling,” Scott said.

“I studied hard at university to get a valuable degree, I jumped jobs to significantly increase my salary – but it wasn’t enough. I considered reducing my pension contributions so we could have more money.

“My wife has stopped working to care for our two children under the age of five, and she has been looking for work for months, but the kind of work she needs doesn’t exist—remote flex hours. We actually considered moving To another country because this country feels bad for families and young people.”

He believes taxes have become punitively high: “I pay almost £2,000 a month in tax, but I can’t actually afford it.” UK Chancellor Jeremy Hunt faces pressure from voters such as Scott and his There is pressure from many in their own party to use Wednesday’s budget to announce personal tax cuts, most likely to national insurance contributions or the basic rate of income tax. But the chancellor’s scope for such a move has been limited in recent days by tougher-than-expected forecasts and warnings that public services cannot afford further austerity to pay for pre-election giveaways.

Scott is pessimistic about the future: “I don’t think this is ever going to end: life isn’t going to get cheaper, and I’ve pretty much maximized my earning potential. It’s ridiculous and I’m tired of it.”

“We can’t afford vacations. We can’t save money for our children. We can’t buy new things, gadgets, hobbies. What is all this for?”

Scott is just one of dozens of middle-class earners who have revealed to the Guardian how they are struggling financially and can no longer afford comfortable homes despite household incomes of between £60,000 and £120,000. standard of living.

A last month’s report abrdn A report from the Financial Fair Equity Trust highlights how the UK’s unstable job market and high housing costs are leading to the growth of a precarious middle class. With a combined income of up to £60,000 a year, these families are struggling to maintain a decent standard of living. By comparison, the median annual gross earnings of full-time employees was £34,963 in April last year.

Many of the readers who got in touch earn much more than that, but say they are still struggling to afford bills and a decent standard of living as mortgage, rent and childcare costs soar and household bills rise. Highest tax burden in 70 years.

Parents and singles in particular feel that their relatively high incomes are not enough to maintain a reasonable lifestyle when taxes are so high. They include Chloe, 38, who owns her home with an outstanding mortgage of £180,000 and earns £57,500 a year in a senior role at a Sheffield charity.

“For the last six to eight months, I’ve really found myself struggling to make ends meet while also living a life that’s completely devoid of any joy,” she said.

Chloe said she stopped drinking, eating takeaways, buying new clothes and downgrading her and her dog’s food to save money. “I also borrowed money from my parents, who were concerned that I rarely turned on the heating at home and were worried it would cause dampness.”

Single Chloe said she worried about being able to afford raising children and a social life. Her current contract expires in six months. “The social activities I can do are very limited, and I don’t even work for a month. When you hear the government say: ‘You can get out of poverty through your own efforts.’ ” you feel very frustrated.

“When you tax people so high, jobs are not an answer. I definitely think tax brackets should be rethought.”

Matt, 32, who works in housing policy, said he and his partner have a combined annual household income of about £80,000. “We live outside Newcastle upon Tyne and are not struggling, but I know that’s because we are – I hate this word – DINKs: double income, no children, relatively cheap to live in this country area.

“Right now it seems that the only way to earn a middle income and live a good life is to become a DINK and live in the north.”

Rose, 35, a project manager at a think tank and mother of one from south London, strongly agrees. She earns £34,000 a year and her partner, who works in IT, earns £57,000.

“The cost of living crisis forced us to move outside London,” Ross said. “After our son was born, we moved into a two-bedroom apartment in June 2022, paying £1,500. In May last year, our landlord increased the rent to £1,700. Since 2022, We just didn’t go out. No dinners, Sunday barbecues, no cinema.”

Rose said maternity leave left her mired in debt, which she is now paying off. When rents rose, her son’s childcare, which cost £1,200 a month for four days, became unaffordable. “He now only attends the nursery two days a week, which costs £750 a month, and he stays with me the rest of the time while I work compressed hours. Although my partner and I both work full-time, our income Basically to pay rent, utility bills, debt and child care.”

While respondents with children reported a more precarious financial situation than those without children, millennial childless couples said they also had little to no disposable income.

Lillian, 36, from County Durham, an environmental consultant to the corporate world, said that despite her and her partner earning a combined income of £70,000, they were facing huge difficulties because their upper-class property had so far Repairs will cost £25,000.

“We just feel caught in the middle,” she said. “We found ourselves living paycheck to paycheck with no savings other than a pension. We worked hard and did everything we could to strengthen ourselves financially and have a career, but it all ended in failure.”

While the couple were lucky enough to secure a five-year fixed-rate mortgage during the pandemic at an interest rate of just 2 per cent, they fear the cost will increase as they must renew next year as the Bank of England base rate has surged to 5.25. %.

Lillian worries about continuing to work into her 80s. “The Conservatives have done a lot to undermine the benefits of work, from Brexit to interest rates, but I don’t know that I trust any party to improve that. We do need more public spending, but it can’t come from my income range “We’re totally squeezed.”

Lillian believes people like Lee should pay more taxes. Lee, 47, a father of four from Surrey, works in the technology industry. He earns around £110,000, putting him in the top 2% of earners. “I’m making more now than I’ve ever made, and I feel very privileged,” he said. “However, I feel much poorer now than I did six or seven years ago when I only had £50,000, which is crazy.”

Lee said his wife works as a part-time nanny, earning about £700 a month, because they cannot afford childcare. Like many other respondents, Lee believes in paying taxes but is dissatisfied given the state of public services.

“Nothing is working. You think – where did all the money go? Nothing is getting better. Something has to change.

“When newspapers describe rich people, I think, ‘Is this someone like me?’ It’s weird.” I feel jealous when other people go on vacations we can’t afford. I shop at Aldi and we budget £1,000 a month for food and petrol for our 10 year old car. We occasionally go to Wetherspoon’s for breakfast. I often think: ‘Is this so? ‘”