Whats more lots of people seem to have new cars, take holidays abroad, buy new carbon road bikes...where the hell does all this money come from?!
This is where your assumption is incorect IMO. There's very little 'and'.
When I worked up north in Middlesbrough* and rented a 3 bed house for <£500/month, those in employment generaly drove nice cars (Financed or 3-6yr old BMW's, Audi's etc). I live in Wokingham** and the car park is full of 6-10 year old Ford Focus.
That's only anecdotal, and probably subject to observational bias. But the same applied to bikes too (far more SS's down south, >50% of the northerners were on new-ish Santa Cruz and I was the only SS). Also I think southerners seemed to spend more weekends doing DIY, northerners always seemed to have tradesmen in doing the work.
That's just my observation having worked in 2 offices for the same company at two different ends of the country, so similar demographics and earnings in different siuations. Obviously there are a lot of poorer northerners and richer southerners as well.
*pretty much the most deprived place in England, the ICI Petrochems site went from 100,000 staff to 10,000 in alsmost no time at all, similar story at the steel plant, and all the associated ironstone, limestone and coal mining villages nearby.
**3rd most expensive place in the UK outside London, 1 bed flat would be £500+