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50k gross when you've got no mortgage or children to deal with is indeed a lot of money. What are you going to spend it on? It's about 150 quid per day, ok there will be some tax to pay but still a lot left over.
ps. richer than others doesn’t equal rich.
How about richer than 85% of the population?
You think £50k (gross) income makes you rich – just how little income do you have?
That really says a lot more about you than the poster you're quoting.
You think £50k (gross) income makes you rich – just how little income do you have?
Its well into the top few % of the country.
I think for me it is about recognising the place of privilege and ability to make decisions about life that money brings. To deny that the levels of resources / wealth that some people have is to deny that position of privilege – and so not be aware of the position those who don’t have it are in.
I hope it is not jealousy, it is not intended as such.
Its clearly not jealousy. You like me are clearly happy with your lot
for me these discussions are about trying to show people how their idea of what riches are is so skewed by their life experience that they have no realisation how rich and privileged they are.
the trouble with a lot of those calculators it they're talking about individual income, whereas in retirement normally people will think about household income. The median retired household with 2 people in it pulls in pretty much bang on £50k - I suspect the mean will be somewhat higher. If mr doctor with a £50k total pension has a wife with 50% of the state pension, they're barely more than average.
Citation for that number? average incomes in retirement are a lot lower than that
for me these discussions are about trying to show people how their idea of what riches are is so skewed by their life experience that they have no realisation how rich and privileged they are.
I'm honestly amazed by how many people here are so out of touch with reality.
<h2>What is the average retirement income?</h2>
On face value the question of ‘what is the average’ is a simple one, the answer is £511 per week (£26,572 p.a.) for a retired couple and £246 per week (£12,792 p.a.) for a single retiree as per the most up to date Government’s Pensioners’ income figures.
Citation for that number? average incomes in retirement are a lot lower than that
it seemed high to me, it was based on @matt_outandabout post -
Then we have compared to retired people:
Retired households have a median of £25k a year per person income, compared to £34k per year for working persons:
but it seemed he got the numbers wrong, they're per household not per person
Defining yourself as rich because you have more money than poor people is like calling yourself a genius because you're the smartest kid in bottom set maths.
no - but denying you are rich when you are in the richest few % of the country is daft
for me these discussions are about trying to show people how their idea of what riches are is so skewed by their life experience that they have no realisation how rich and privileged they are.
I earn well above the national average (~2.5x). One income in the house.
what that means in reality is that we can afford to eat ok, heat the modest 2 bed terraced house, cover the mortgage, put a bit aside and maintain two old cars, a selection of S/H bikes and a holiday now and then. all the things back in the day I would probably have been able to do on an average income.
Maybe I'm getting it wrong somewhere but having a higher than average income isn't the sunlit uplands many seem to think it is.
No its not - but it does mean you are privileged and richer than the majority
You appear to have the luxury of a nonworking spouse? Im assuming a stupid modern huge mortgage?
the trouble is that weath is averaged across the whole country, whereas unless you live in an average area, its pretty meaningless. a 3-bed semi is probably what a lot of people would consider a "typical" house, round here that can be over £1mm
https://www.rightmove.co.uk/properties/131925032#/?channel=RES_NEW
whereas in the north is could be £70k
https://www.rightmove.co.uk/properties/130282673#/?channel=RES_BUY
that £980,000 difference in price is going to have a lot more impact on whether you're rich or not than your income
so on that binary basis anyone who earns a £1 more than the average is therefore rich.
its almost like we need a term for the transition zone, the middle ground. middle class maybe..
5lab - that house is still an asset and also beyond the reach of the vast majority of the population
this is the crux tho. My guess is many of you live this comfortable well off middleclass lifestyle and look around you and think it normal and average to have this wealth as it is amongst your peers - but that is only because you do not see the rest of the population and thus have no real comparator.
being able to afford a million pound house make you rich.
lol @tjagain:
above the average working wage – that makes you rich
😀
So, if you earn above the absolutely squalid average wage (which it is, the average wage is rubbish) you're rich? ROFL.
My guess is many of you live this comfortable well off middleclass lifestyle and look around you and think it normal and average to have this wealth as it is amongst your peers – but that is only because you do not see the rest of the population and thus have no real comparator.
Conversely, what's clearly obvious is that the poor in the UK are so desparately poor that they look at middle class struggle and think "wish I was there - the bloody rich" - with no comprehension that the middle class aren't actually living the high life.
Like I said - this argument is plebs arguing amongst themselves rather than looking at the real problem - the ultra high net worth individuals. The 0.1% who hold as much wealth as 50% of the entire population.
The distribution curve is the problem. Not people with 50 grand a year retirement incomes. Rather the people with 50 grand a day interest on their wealth. A maximum wealth cap is the solution here - a change in the distribution of our inequality (not a wiping out of inequality - that would be wrong) - but a massive change in the distribution.
But poor people raging at the middle class is a self-defeating attitude. We all need to be looking at the distribution curve - the 80 richest people on the planet hold as much wealth as the 3.5 billion poorest. That distribution graph is roughly the same in the UK.
So no. Having a million quid in a pension pot (which I'd dearly love, but will never have) is not "rich". Having a 50 grand a year retirement income is well off, but not "rich". It's just most are very, very poor and are jealous and angry of the people closest to them - the middle class - which is the wrong people to be angry at.
No – but 4x the national average wage makes you rich
So an average nurse, which is a Band 5 nurse is on £30k ish. An avg consultant will be £120k ish, but the consultant take home pay is not 4 x that of the nurse. After being taxed at up to 60% its probably double that of a nurse for a very different and level of skilled job.
My guess is many of you live this comfortable well off middleclass lifestyle and look around you and think it normal and average to have this wealth as it is amongst your peers – but that is only because you do not see the rest of the population and thus have no real comparator.
Come on now really ? I thought you had a little more insight than that. It just shows that a lot of people are envious of people who have more money than them.
Envy of money is not a good place to be. My parents grew up in council houses, as did Mrs FD parents. They worked hard to give us both opportunity, in turn we have worked hard to get good jobs and therefore income. To think we sit in an ivory tower sipping champagne all day is just sad on your part.
that house is still an asset and also beyond the reach of the vast majority of the population
the point I was making is slightly different. If you can't afford any house where you live, I think its fair to say you aren't rich. The cheapest flats (I'm talking something above a shop on a main road) in Hurst are £270k, which with a generous deposit (20%) would still leave you needing a £60,000 income (at 4x your salary) to buy one. Up north, a £60,000 income would likely lead to you being rich fairly quickly, but if you can't afford any property with your salary, I don't think I'd class that person as rich.
https://www.rightmove.co.uk/properties/132150158#/?channel=RES_BUY
The conversation seems to have veered very much to what makes you weathly/rich/well off, whatever, but if you have broached the LTA or are getting more that 40K per year total employer + employee pension contributions (yes TJ significantly more than the UK national average wage since it's tax free) you are doing OK.
The NHS seems to be an outlier since most people outside the NHS get nothing like the employer contributions of the NHS and have total control of what they pay in so they know whether they will broach the annual / LTA limits. Maybe the NHS pension scheme needs a better system for people to manage contributions.
My issue with raising the Annual and Lifetime pension limits is that this country is in a cost of living crisis, underfunded services, food banks etc.. should we be raising tax free allowances (remember this is a tax free kickback to encourage savings) for people who are undoubtedly far better off than average? Very on par for this government for me.
If you can’t afford any house where you live, I think its fair to say you aren’t rich.
I get what you mean, but I dont think you can use that. We used to live near Leeds in a 3 bed semi. We have moved to rural Shropshire and for basically the same money we now live in a much much bigger house. Wages on the whole are lower in Shropshire so we are perceived as being 'well off' because the amount we paid for the house in Shropshire is way above the avg down here, but below the avg in Yorkshire.
@5lab - more than that.
If you can't live in any area you like, you're not rich.
Well off? Maybe. Maybe even very well off. But not rich.
How does it go "it isn't what you earn that makes you rich, it's what you don't spend"
Understand this:
get what you mean, but I dont think you can use that. We used to live near Leeds in a 3 bed semi. We have moved to rural Shropshire and for basically the same money we now live in a much much bigger house. Wages on the whole are lower in Shropshire so we are perceived as being ‘well off’ because the amount we paid for the house in Shropshire is way above the avg down here, but below the avg in Yorkshire.
But it's just more evidence of "plebs arguing amongst themselves".
You're not rich - you went from a 3 bed semi in Leeds to a better place in a poorer area. If anyone thinks you're rich then they're deluded.
My issue with raising the Annual and Lifetime pension limits is that this country is in a cost of living crisis, underfunded services, food banks etc.. should we be raising tax free allowances (remember this is a tax free kickback to encourage savings) for people who are undoubtedly far better off than average? Very on par for this government for me.
it’s a very seductive thought that if we just tax those with high incomes more we can solve our problems. The hard mathematical reality is that we can’t. There simply aren’t enough people who earn that kind of money to actually make a difference. Full disclosure I certainly am in that category and I will be paying a hefty tax bill due to the pension allowance taper this year but it won’t make any real difference to the U.K. tax take. The simple fact is that in order to raise significant amounts of tax it’s the basic rates that need to be raised.
A much better way would be to simplify things like not having separate rules for capital gain. Removing cgt exemption on your main residence, taxing inheritance as income. All vote losers so never likely to be implemented.
Worth also taking a look at what the pension firms describe as amounts you should aspire to, with regards to being 'comfortable' in retirement. I read those descriptors and think, I agree with comfortable - thats where I aspire to be.
TJ you are only just living above most pension firms definition of minimum. You must have a very very frugal lifestyle and therefore likely to have quite a skew on what rich is? Of course the below numbers are all averaged out, so don't take into account regional variances, but it gives you a yardstick. From standard life. Other pension providers available. And only recent £1m did not get you any where near as good an annuity (I'm taking that 50k on face value, I haven't checked its right)
Should say, the uk holidays in 'minimum' must be in a tent, because whenever I've looked to stay a week in devon its quite a bit more than abroad!!!
Minimum retirement
To achieve the minimum living standard, a single person would need an annual retirement income of £12,800. A couple, meanwhile, would need £19,900 a year. At the minimum standard, your basic needs – like food bills – are covered, and you still have some money remaining for fun. For example, you could have a couple of holidays per year in the UK – but not abroad. And this standard doesn’t budget for the cost of running a car.Moderate retirement
To reach the moderate living standard, a single person would need £23,300 annually, while a couple would require £34,000. You could afford a car and to have it replaced every 10 years. You could go on a two-week holiday in Europe every year, too. So this standard accommodates more expensive leisure activities.Comfortable retirement
To achieve the comfortable living standard, a single person would need £37,300 per year. A comfortable income for a couple would be £54,500. At this standard, you can enjoy luxuries, like a three-week holiday abroad. You’d also have more money to spend on a shopping spree.
If you can’t live in any area you like, you’re not rich.
Well off? Maybe. Maybe even very well off. But not rich.
+1
I use to work for someone who could've lived in any COUNTRY he wanted that - that's proper rich.
And Monaco was his chosen country.
And based on experience when looking at earned income it's very easy to go from a lot to little/nothing - that's when you know how 'rich' you actually are.
And back to pensions, the issue will solve itself if the Tories are re-elected - there won't be this large cohort of well paid public sector rank-and-file employees...
more that 40K per year total employer + employee pension contributions
Without wanting to be pedantic is it’s not £40k pension contribs.
It’s £40k pension growth, which is a slightly arcane and unpredictable calculation.
@ gonefishin... the top 1% of earners pay 30% of all tax and anyone paying higher or additional rate tax make up 60% of all tax take. However what I was talking about was not giving further tax free pension breaks not the tax free pension rules as they are now. Remember getting taxed at 40/45% means that you already get a bigger tax free allowance than someone on standard income tax. Paying a heafty tax bill means that you have generally earned a good amount. I don't see that as a problem.
Simplifying CGT I agree would be good although it's certainly not a vote winner and I can't see it happening.
Pedantic and accurate... although not an issue for '23 so far!
TJ you are only just living above most pension firms definition of minimum. You must have a very very frugal lifestyle and therefore likely to have quite a skew on what rich is?
I do live a frugal lifestyle - dark green remember and I also have assets which include cash. I am a lot lot better off than most
I don't have a skew on what rich is. I fully understand. Its folk on here claiming they are not rich when in the top few % of the richest in the country that have the skew. That £120 000 pa is a normal middle class wage, that a million pound pension pot is normal. that sort ofthing
there won’t be this large cohort of well paid public sector rank-and-file employees…
What large cohort? Very few in the public sector earn significantly more than average
That £120 000 pa is a normal middle class wage, that a million pound pension pot is normal. that sort ofthing
I don't think anyone has suggested they are normal, but its not that unusual and it doesn't make you as rich & wealthy as you seem to think it does.
your constant assertation that anything over average income immediately makes you rich is fairly blinkered.
Given what size the average pots are, I would suggest that a £1m pot is actually fairly unusual. Not on here certainly, where the membership is skewed to middle-high earners, but outside the comfortable STW bubble.
indeed, just looked up average pension is 15k after direct costs and housing. So TJ is technically claiming to be rich whilst living off less than the uk average by some margin. maybe if the assets were flogged the numbers would change
https://www.unbiased.co.uk/discover/pensions-retirement/planning-for-retirement/what-is-the-average-uk-retirement-income
I'm not sure anyone is saying 120k income / 1m pension pot is not doing well. The thing that certainly riled me, is the initial ridiculous statement that if you earn above the national average you are rich. Which is just bollox. Its not a binary switch and such a gross simplification does not do anyones further arguments any favours.
I think I've realised that for certain contributors "rich" is perceived as having more money coming in the door than they have, irrespective of other factors and very important details. There appears to be no concept of wealth or a sliding scale from poor all the way up to our countries billionaires.
I think the fact 120k/1m keeps now being referred to shows some rowing back of / attempt to justify a silly standpoint
your constant assertation that anything over average income immediately makes you rich is fairly blinkered.
Apart from I have never said that. Being in the top 10% or so does put you amongst the richest in society. thats my point along with the skewed perceptions on here about how rich folk are. Earning multiples of the average wage makes you rich. Have savings that are multiples of theaverage makes you rich and £120 000 PA is certainly both an unusual salery and a high one being in the top few % of the country
indeed, just looked up average pension is 15k after direct costs and housing. So TJ is technically claiming to be rich whilst living off less than the uk average by some margin. maybe if the assets were flogged the numbers would change
Assets remember. It means tho my income is low I do not have to worry about finances because I have a large cushion. ful bills - just [pay them. want something - just buy it. a very priveledged postion to be in
The thing that certainly riled me, is the initial ridiculous statement that if you earn above the national average you are rich.
apart from no one has actually said that. Earning multiples of the national average certainly does make you rich.
Oh and the original point was the way tax works, the cap on pensions disincentives people from working who we could really do with staying in the workplace (providing a service and continuing to pay even more tax...)
Whether you think they are rich or not, we benefit more from them staying in work, so hence the changes to the pension caps are needed
(and on a related subject childcare costs, but mostly impacting the other end of the "rich" scale)
The thing that certainly riled me, is the initial ridiculous statement that if you earn above the national average you are rich.
Yes, I don't agree with that either.
Having an asset that generates over the national average income is a different thing, though.
Earning multiples of the national average certainly does make you rich.
I'll concede that it gives you the potential to become rich, but it doesn't automatically mean you are.
20k per year = just getting by (poor)
40k per year = comfortable (average)
80k per year = very comfortable (above average)
160k per year = more comfortable that a full suss e bike (well above average, but not rich)
320k per year = rich. I'd also say that most "rich" people often come into their money on an irregular basis and may not actually "earn" a significant wage year on year.
Some of yo need to have a look at this.
Earning £60 000 pa is the top 10% twice average aearnings
Over 100 000 in the top 1%
£160 000 per year is certainly rich
I’ll concede that it gives you the potential to become rich, but it doesn’t automatically mean you are.
Reminds me of an argument I had with housemates after uni about whether we were "middle class" or not (whilst living in a shared house).
I argued we were very much now middle class as we all individually had salaries around or above the national average straight out of uni and if we quit tomorrow we wouldn't be destitute for quite a while because saving up a 6-month buffer sufficient to pay rent, heat and food was relatively easy. Cue lot's of hand wringing about class being where you came from, and that any sort of 'work' made you working class. I think some people really struggle to comprehend quite how well off they are and just because their outgoings match their means assume that means they're not "rich".
The thing that certainly riled me, is the initial ridiculous statement that if you earn above the national average you are rich.
Can you clarify when this was said?