What level of salary makes you rich

[deltic]

With Labour proposing an increase in tax for those earning over £80k there has been a lot of debate about who are the rich. So at what level of income do you think people should be regarded as rich?

 

[AlterEgo]

A truly rich person doesn't take a salary.

 

[ExRes]

I don't think you could ever get agreement on where 'rich' starts, the one thing I wonder is why MPs should pick a random figure of £80k, why don't they start at, say, £74k?

 

[richw]

Depends what you do with it. Could earn millions and blow it all, yet could earn minimum wage, live a simple life and save.
Who's richest, the person earning millions and blown it all each month on a lavish lifestyle leaving nothing in the bank, or the low earner saving a few grand a year, and having savings?

 

[Howardh]

A truly rich person doesn't take a salary.

I get my staff to go to the bank for me, they enjoy a day out in Basel.

Sadly if anyone wants to swap their salary with mine, £62.70/week (which is tax-free and comes with my NI stamps )......

 

[yorkie]

https://en.oxforddictionaries.com/definition/rich

Having a great deal of money or assets; wealthy.

If someone who lives in a cheap place up north (let's say Pontefract or Normanton; sorry yorksrob! ) got paid £80k upon leaving college, and spent/invested wisely, they would surely become rich within their working life, and certainly by retirement age.

On the other hand, someone who lives in London would never be rich on an £80k salary. Well-off yes, but not rich.

Of course someone could be on no salary at all and be rich, if they were given assets.

It's impossible to answer the question really as it's not defined by salary. If you are on a huge salary but you paid a huge rent and lavish lifestyle, you'd never be rich, no matter how great the salary was!

 

[DaleCooper]

To have enough for all your needs and wants is to be rich. How much that is depends on your needs and especially your wants. It appears many billionaires can never be satisfied; no matter how much they have they want more.

I can't vote in the poll as there's no appropriate category.

 

[me123]

I struggle to answer this question on the grounds that salary and wealth are not necessarily linked. Someone could earn minimum wage, but still be rich on account of inheritance. Someone could earn £1M per year, but still be poor on account of debt (presumably said person would have been rich at some point to be in that much debt, but I'm talking hypothetically here).

 

[RichmondCommu]

On the other hand, someone who lives in London would never be rich on an £80k salary. Well-off yes, but not rich.

In all fairness if you have a mortgage and a family to support and you live in London you will not be well off if you earn £80k per annum.

 

[najaB]

Impossible to answer, as others have said, as there are too many other factors to consider.

 

[takno]

In all fairness if you have a mortgage and a family to support and you live in London you will not be well off if you earn £80k per annum.

Yes, yes you will. You may be in a bubble where you've completely lost sight of what most people live on, but you will be well off.

 

[AlterEgo]

Yes, yes you will. You may be in a bubble where you've completely lost sight of what most people live on, but you will be well off.

A sole wage earner in London on £80k supporting a family isn't going to be well off. I know, because I work with a couple. They're definitely not wealthy or rich by any stretch of the imagination.

 

[RichmondCommu]

Yes, yes you will. You may be in a bubble where you've completely lost sight of what most people live on, but you will be well off.

Please explain how you will be well off given the circumstances that I've described.

 

[RichmondCommu]

A sole wage earner in London on £80k supporting a family isn't going to be well off. I know, because I work with a couple. They're definitely not wealthy or rich by any stretch of the imagination.

I concur. It's a pity that others live in a "bubble".

 

[EM2]

Please explain how you will be well off given the circumstances that I've described.

It depends.
Have they paid off their mortgage, for a start? If not, did they buy property when prices are low, and so have lower mortgage payments?
Do they have family members that can provide childcare, so they don't have to pay for that?
And that's just off the top of my head.

 

[najaB]

Yes, yes you will. You may be in a bubble where you've completely lost sight of what most people live on, but you will be well off.

Obviously a lot will depend on exactly where in London you are talking about, but according to research published in The Telegraph in 2015, the average first time buyer needs a salary of c. £77K to get on the property ladder in London.

The average first-time buyer needs a minimum income of £41,000 in order to secure a mortgage, almost double the UK’s average wage of £22,000.

A report published by KPMG this week found that the divergence between house prices and wages has grown so wide that affordability is now an issue for all aspiring buyers unless they have very high earnings - or inherit money.

First-time buyers in London have the toughest time getting on the property ladder. They need to earn a whopping £77,000 in order to buy their first home. In reality the average worker earns just £28,000.

The figures, which are based on a 10pc deposit and borrowing the remaining 90pc at 4.5 times annual income, vary widely between the North and South.

Throw supporting a family on top of that and £80K is not well off.

 

[RichmondCommu]

It depends.
Have they paid off their mortgage, for a start? If not, did they buy property when prices are low, and so have lower mortgage payments?
Do they have family members that can provide childcare, so they don't have to pay for that?
And that's just off the top of my head.

You raise good points but in my opinion even if you started off with say a one bedroom apartment once you have a family you need a bigger place and a bigger mortgage. It's worth remembering that many people move to London with their extended family living else where.

 

[takno]

Obviously a lot will depend on exactly where in London you are talking about, but according to research published in The Telegraph in 2015, the average first time buyer needs a salary of c. £77K to get on the property ladder in London.

Throw supporting a family on top of that and £80K is not well off.

It's not as well off as I am, but at the end of the day you have a house which you chose to buy and which you can sell to move somewhere cheaper, which automatically makes you better off than the half of the population who can't afford one at all. How do you define well-off if you don't do it in comparison to other people?

 

[RichmondCommu]

It's not as well off as I am, but at the end of the day you have a house which you chose to buy and which you can sell to move somewhere cheaper, which automatically makes you better off than the half of the population who can't afford one at all. How do you define well-off if you don't do it in comparison to other people?

You're assuming that you can have the same career or that an extended commute won't have a negative effect on your family life if you move away from London.

 

[najaB]

How do you define well-off if you don't do it in comparison to other people?

Just like 'rich' in the initial question, it's all a matter of perspective. For me you are well-off if you have significant disposable income on a monthly basis.

 

[pdeaves]

I consider myself 'rich', but in financial terms I don't appear in any of the voting bands by any stretch of the imagination. To me, 'rich' is about other things in life; a loving family, health, ability to enjoy what I have, etc.

 

[DarloRich]

more than i get paid but less than some get paid

 

[sk688]

I concur with others , it does depend on where you live

75k wont go as far in London , as it might somewhere up north , or in some rural place

It depends on family situations , size , number of earners

For example , Corbyn wants to tax my familly more , but he forgets that cost of living is already astronomically high , esp in London ( although he should know, living in Islington ! ) , as well as the fact that people already have to pay enough tax like the Congestion Charge , Road Tax etc

Imo , Corbyn would do better to go after companies like Google , Starbucks and Amazon , and get them to cough up

 

[takno]

You're assuming that you can have the same career or that an extended commute won't have a negative effect on your family life if you move away from London.

There are all sorts of decisions and trade-offs to get there. If you work 80 hours a week to earn the 80k (I've worked those hours for much less at times) that will probably have an effect on your family life as well.

Taking a basic case, if you live a 30 minute commute out of London you will have season ticket costs of up to 2.5k, and extra costs of housing compared to the national average of at most 14.5k (that's £200k on a repayment mortgage with a pretty pessimistic interest rate). Add on tax at 40% you get 28.3k, leaving you with at least 51.7k. That's really quite a lot more than the median salary - if you take slightly more realistic numbers you'll be on around double it. On top of that you are also building up £200K of additional value in your house, so when you come to retire you can sell up, move somewhere cheaper and fund a chunk of your pension.

 

[RichmondCommu]

There are all sorts of decisions and trade-offs to get there. If you work 80 hours a week to earn the 80k (I've worked those hours for much less at times) that will probably have an effect on your family life as well.

In all fairness if you're having to work 80 hours a week to earn £80k then you need to look for another job. I regularly worked 80 hours a week in my 20s and mid 30s but I was earning a fair bit more than £80k per annum. Please understand that I'm not trying to boast when I type that.

 

[RichmondCommu]

Taking a basic case, if you live a 30 minute commute out of London you will have season ticket costs of up to 2.5k, and extra costs of housing compared to the national average of at most 14.5k (that's £200k on a repayment mortgage with a pretty pessimistic interest rate). Add on tax at 40% you get 28.3k, leaving you with at least 51.7k. That's really quite a lot more than the median salary - if you take slightly more realistic numbers you'll be on around double it. On top of that you are also building up £200K of additional value in your house, so when you come to retire you can sell up, move somewhere cheaper and fund a chunk of your pension.

In all fairness £240k (as an example) within 30 minutes of the centre of London will not get you any more than a two bed apartment and in many cases you'll only get a one bed apartment. As an example the first place I ever owned in London was 16 Gables Close in SE12. That's a one bedroom flat and last year was sold for £235k. I really would not want to raise a family in a one bedroom flat. Not only that but its all very well saying that you can sell up when you retire but that's of little or no help when you're raising a family.

 

[takno]

In all fairness if you're having to work 80 hours a week to earn £80k then you need to look for another job. I regularly worked 80 hours a week in my 20s and mid 30s but I was earning a fair bit more than £80k per annum. Please understand that I'm not trying to boast when I type that.

I was setting up a business. I wouldn't work those kinds of hours again for anybody, even myself. The point is that most people aren't even earning half of 80k, however many hours they work.

 

[RichmondCommu]

I was setting up a business. I wouldn't work those kinds of hours again for anybody, even myself. The point is that most people aren't even earning half of 80k, however many hours they work.

Ah look if you live in for instance the East Midlands and you earn £22k someone earning £40 will be perceived as being rich. The thing is living in London changes everything, rightly or wrongly.

 

[Bald Rick]

The 'richest' I ever felt was living up north 15 years ago, wife earning, no kids.

Now I earn three times as much, live in Hertfordshire, wife not earning (unable to), 2 kids, and have genuinely never felt poorer, not even when I was a student.

It's all relative to your circumstances. Incidentally, whilst my pre tax income has trebled, my post tax income has 'only' doubled, which shows the impact of the current tax regime.

 

[Barn]

Now we have proposals to introduce punitive tax rates at 'normal' earnings levels, we really need to start taxing family incomes. It is after all at the family level that costs are incurred. There are huge tax and benefit differences between an earner on £90k and a non-earner compared to two earners on £45k.

For a sole earner with non-working spouse and two children, £100k is only just starting to be comfortable (and would still be at risk of e.g. interest rate hikes).