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Location makes a big difference though.
£60k in the North East gives a very good lifestyle - it’s noticeable that “premium” car brands are very well represented.
£60k in London can make for a pretty rubbish lifestyle - throw in kids etc and you’re looking at a substantial commute or living in a shoebox in a former industrial area.
Isn’t the problem that we all define rich according to our own circumstances. So there can’t be a universal definition of what rich means?
somewhere up there, I quoted it.
it's also been mentioned on several threads before. including one I had to walk away from on childcare costs and the very real impact it has on middle earners.
more income gives you more opportunity to become rich I definitely agree. bigger the income more likely you will increasinglybe more comfortable.
it is just not an auto given, and it is getting much harder the younger you are. Most I know who are well off, say considering retiring in their 50s made most of their money from equity in properties. their actual income was dwarfed by it.
other factors make such a difference like kids, location, background, student debts, family money etc...
should add I'm considering them well off because they are able to think about early retirement, they certainly don't have big expensive cars, just sensible houses and most importantly no kids!
raising a kid to 18 supposedly costs 200k. and most will require support for several more years
Can you clarify when this was said?
Errmmm – its above the average working wage – that makes you rich
He is Scotlands most frugal man so fair play and hope for some money saving tips.
Out of context quote. IIRC it was reffering to a pension of 50 000 pa - ie well above average earnings and almost 3 times average pension
Of course you are not rich at a penny above average wage but at twice average you are in the richest 10% at 3x you are approaching the richest 1% by income
Isn’t the problem that we all define rich according to our own circumstances. So there can’t be a universal definition of what rich means?
I think being in the top 10% earnings or asset wise seems reasonable. which I am I think on assets
Having seen real poverty all my life and Mrs TJ spent her entire life fighting it for money for folk the claims that you are not well off on sums that 90+% of the population will never reach is pretty offensive.
Now you change your language. I am well off comparatively, I’m a long way from poor, but I’m even further from being rich.
Unless you class rich as not being financially ****ed. Which I accept, an unhealthy amount of the population are.
Your IRCC is a little off.
A million quid penion might give you 30-40 grand income per year in retirement, that is not the income of a rich person, that is just a comfortable living.
Errmmm – its above the average working wage – that makes you rich
The lack of reality here about the poverty in this rich country is absurd and the lack of reality about how rich many of us are is frankly astonishing
Got to agree with your sentiment though on poverty but not being poor doesn’t make you rich which is the point a lot of folk are trying to get across to you.
not being poor doesn’t make you rich which is the point a lot of folk are trying to get across to you.
Of course - but being in the richest few % of the population does make you rich
DT78
Apologies if I offended you on that thread. the point I was trying to make was that being on twice average income does not make you a "middle earner" It puts you firmly in the top 10% or so. this is the bit folk on here do not seem to get. average wages are low, the top 10% of earners is at a lot lower figure that you seem to realise
But again apologies for offending you
I think being in the top 10% earnings or asset wise seems reasonable.
So by the same simple logic do we call the bottom 10% poor? And what do we call the 80% in the middle of these 2 thresholds?
I’m honestly not disagreeing and don’t mind being called rich I’m just not sure you can put figures against it.
Its more than the bottom 10% that are poor. there is an official designation for poor as a %of average earnings IIRC
Torygraph reporting LTA lifted to £1.5m and the annual allowance up £20k to £60k. Doubt it’ll come into effect till the next tax year, imagine most doctors will be on unpaid leave by then.
@tjagain - at 3x national average salary income you are not rich. You're well off, yes, but rich?
Rich is not defined by income alone. If you come from nothing, are going to inherit nothing and you've done well for yourself and pull in 100k a year you're not rich.
If you earn 40k a year and you stand to inherit a few million quid when your folks pop it - you don't have the lifestyle of a rich person, yet, but you sure as hell are free to make different decisions than the first.
If you're free to choose what you want to do? Got assets and an income from assets that means if you lose the job you choose to do then you're free to lay about whilst you decide what you want to do next? You're rich.
3x national average salary doesn't make you rich. It enables you to get on the property ladder with a decent deposit, it enables you to invest significantly. It enables you to pay a lot of a tax if you're PAYE and build up a pension over your working life. But you're not filling your boots with ferrari's. If your income is your income and you're not replete with assets to live on then you're firmly in the middle class.
3x national average salary puts you into the highest earning few of % of the population. That is indisputable.
You may think being one of the nations top few % of earners does not make you rich but earning more than 95% of the population does certainly takes you into the category of the wealthiest.
I put a link above to the percentiles for earnings in the UK
Edit - I understand you may not feel rich - this is always so but earning more than 95% of the UK taxpayers puts you firmly amongst the richest folk in our society
It may have been covered before but another take on why a £120k pa employee might find £1.1m LTA penal is to consider that old style DB schemes used to aim to deliver c2/3 of a salary in retirement. Now, this has proved a bit uneconomic hence their steady decline. A LTA of £1.1m will buy an annuity of mid £40s k I would guess, certainly some way less than half of £120k salary. Sure, it’s a decent income but quite some cut against pre-employment levels.
There's no law against saving more than the LTA into your pension. It just means it isn't tax free. Whether or not increased tax bungs for the rich is the best thing to spend money on when we have 2 million using food banks is, I think, a valid question. Of course it's not surprising what the Tories think.
I reckon if TJ had had kids (and now grandkids) he wouldn't be telling us how what he lives on makes him 'rich', nor would he have even thought what he earned while working made him 'rich'.
There’s no law against saving more than the LTA into your pension. It just means it isn’t tax free.
This for me is the important point, when this LTA 'issue' first came up a few years ago this was my comment to an NHS Consultant I 'know' AKA stop complaining it just means you earn good money and the monies going into your pension are a lot.
But when actuarial maths are applied to a juggernaut pension scheme the consultants aren’t given the choice
You may think being one of the nations top few % of earners does not make you rich but earning more than 95% of the population does certainly takes you into the category of the wealthiest.
you're conflating wealth (what you have) with earnings. You can have no income and be wealthy, or lots of income and not be wealthy. Often people with high earnings are wealthy, but the two are not synonymous - age typically plays an extremely large role
It just means it isn’t tax free.
It's still tax free when it goes in. It's taxed very heavily when it comes out - 55% for lump sums, and 25% + whatever your marginal income tax rate is for income.
If you are in the fortunate position of the LTA being something that might affect you, it's hard to plan exactly for it because it's not a limit on contribution , but a limit on value, and so it depends on many things that are out of your control - the performance of your funds, the value of any index linked DB schemes you might have. That value is assessed when you trigger a 'crystallisation event', usually taking some money from a SIPP, or when you reach 75. If you have a SIPP and an indexed DB pension every year your DB statement will tell you that that has accounted for more of your LTA, because the LTA link to inflation has been broken. So every year, the effective tax rate on that SIPP, whenever you actually take it, increases, unless your investments collapse and bring the total down below the LTA.
sorry @tjagain:
3x national average salary puts you into the highest earning few of % of the population. That is indisputable.
You may think being one of the nations top few % of earners does not make you rich but earning more than 95% of the population does certainly takes you into the category of the wealthiest.
You clearly don't understand the difference between Wealth and Income and which combination of the two makes you rich.
Illustrative examples are in my post - and you totally ignored them.
You're wrong m8. Sorry.
Just to add - if you've nothing, and you land yourself a 120k a year job, you're not rich - you're just dragging yourself out of the mud.
Accusing people like this - of which there are many - of being "rich" is jealousy pure and simple. It's the standard thing to have pot shots at people who are making something of their lives from people who are stuck in the mud.
And again, it's nothing but a distraction from the real problem - the UHNW individuals who's wealth is so great that it actually distorts our democracies. This thread is about the plebs fighting amongst themselves.
Accusing people like this – of which there are many – of being “rich” is jealousy pure and simple. It’s the standard thing to have pot shots at people who are making something of their lives from people who are stuck in the mud.
I am not "accusing" anyone. I am stating clear facts. the percentile charts are there for you allto see. If you earn £60 000 pa you are in the top 10% of earners. at £100 000 you are approaching the top 1%. That makes you rich. This is clear and factual.
As for jealousy. Not me not one bit. Projecting much? I am perfectly content with my lot
What infuriates me is the denial from many on here how wealthy you are. when you have a salery or assets that put you amongst the wealthiest few % in our society you are rich.
Some of you have so little idea of what the real world consists of its frightening
BTW - its my assets that make me rich not my income.
Are you willfully ignoring the argument @tjagain? Having a bad day and just want a fight or something?
I am stating clear facts. the percentile charts are there for you allto see. If you earn £60 000 pa you are in the top 10% of earners. at £100 000 you are approaching the top 1%. That makes you rich. This is clear and factual.
No. No it doesn't.
I said this, after repeatedly making the point:
You clearly don’t understand the difference between Wealth and Income and which combination of the two makes you rich.
Overall wealth is the primary arbiter of "rich" - not income in isolation.
If have nothing, you land yourself a £120k job, then two years later get made redundant you're still buggered. If you've been very sensible (and not just enjoyed your new-found income) then you're in a much better place than someone on £20k. But you're not rich.
There's one of two things going on here, either you don't understand what rich actually is, or you just want an argument.
If you earn £60 000 pa you are in the top 10% of earners
This may be so. The median is about £28,000?
I suggest this kind of figure is not a good gauge of richness but instead an indictment of uk government incapability to improve economic growth. It is the result of many years of government ineptitude.
Overall wealth is the primary arbiter of “rich” – not income in isolation.
If have nothing, you land yourself a £120k job, then two years later get made redundant you’re still buggered. If you’ve been very sensible (and not just enjoyed your new-found income) then you’re in a much better place than someone on £20k. But you’re not rich.
There’s one of two things going on here, either you don’t understand what rich actually is, or you just want an argument.
[channels inner Trump]
Obviously I'm cripplingly poor, my mortgage means I've far more debts than liquid assets. Clearly the homeless guys in town are far richer than me.
[/channels inner Trump]
Can we rename this thread the pointless semantics thread please?
Chevy - its you that does not understand the reality "rich" is being in the wealthiest few % of the population
Earning more than 99% of the population ( £100 000pa) makes you rich
OR
Having assets of a million ( 7x average?) makes you rich
You may not feel rich, you may have huge outgoings but its a simple fact that earnings or assets like that put you firmly in the richest few % of our society
As for
if you’ve nothing, and you land yourself a 120k a year job, you’re not rich – you’re just dragging yourself out of the mud.
That means almost no public servants will ever be able to "drag themselves out of the mud" How out of touch are you that you think an income that is in the top 1% of the UK taxpayers is merely "dragging yourself out of the mud
Interesting straw man argument there @thisisnotaspoon.
Oh, wait. No it isn't, is it. It's yawningly predictable and absolutely nothing to do with what was written.
@tjagain - again, I completely disagree. Middle class people aren't rich. That guy with nothing but a very well paid job, he's still insecure. He's not got the security of wealth. Therefore he's not rich.
Not going to go round in circles with you but this is interesting:
That means almost no public servants will ever be able to “drag themselves out of the mud”
This is true. And the way the system is supposed to work. So stop whining at the not-actually-rich and engage with the actual problem - and I'll give you a clue: The actual problem is not the 10% of high earners. It's the system that allows the buildup of colossal inheritable wealth.
If you deal with that, with the disparity between the very high haves, and the very low have-not's - and restrict it - so total wealth disparity has a ceiling which cannot be breached (and I don't know what that is - maybe the wealthiest could be allowed to be a hundred times more wealthy than the poorest in our society? Or a thousand?? Right now - the wealthiest are over 7 million times wealthier than a guy with 20 grand.)
Or, alternatively, keep the fighting amongst the plebs - punching at the firmly middle class - whilst ignoring the thing that really needs fixing. It plays into the hands of people who don't give a ****, and alienates people close enough to the poor to actually understand what the poor feel - and because of that might even care a little.
Rich - having wealth or great possessions; abundantly supplied with resources, means, or funds; wealthy:
TJ - you are confusing being paid higher than the average with the definition of rich.
I believe you were a Band 7 or Band 8 in the NHS. By your own definition you earned more than the UK average so does that mean you are rich too?
As I have said above, someone on £120k does not take home nearly 5 times the money of someone on £25k, yes they are comfortable, but certainly not rich !
I guess really rich people must be laughing at this tread as we squabble over if 120k is rich whilst they pay someone to count their billions. As flagged above, this is exactly what they want.
I was a band 6 and a band 5. Because of my assets not my income I consider myself rich. I earned around the average most of my career sometimes a lot less
I am not confusing anything. Its many folk on here who are as they seem not to realise where the percentiles of earnings and assets are
How on earth can you be in the top 1% of UK earners and not be rich? £120 000 puts you firmly in that category IIRC
so you earnt average or less your whole career, and yet you are by your own admission rich because of the assets you own.
its almost like income isn't the only metric of being rich.
If TJ was a band 7/8 and he earned an average nurse wage his pension may well be by his own definition firmly in the bracket of the “rich”.
The NHS pension scheme (like most public sector schemes) has an index linking element and features typically only available at a significant additional premium to people investing for their own pensions.
The result is that the employers contribution IRO 15% is actually worth around 25-30% when the value of the benefits / cost of buying those benefits in a private scheme is included - so TJ’s pension would likely equate to a 2.5-3% annuity in a private scheme with index linking.
One caveat to that to illustrate the additional benefits - pretty much no private sector schemes offer uncapped index linking - so the 10% ish uplift that public sector retirees benefited from this year would be capped at 4% on self invested pensions.
From what TJ has already said, he’s effectively benefited from an equivalent money purchase “pot” value of £600-900k.
TJ - feel free to check the calcs - divide your annual pension by 2.5 then X 100 to get to the equivalent money purchase pot.
Not right on my pension. I did not have a full contribution record. My pot is worth around 1/4 million on that basis My pension is £550 pcm. I was a band 6 and then a 5
Correct Jambo - its your income and your assets that need to be taken into account. I've made that clear throughout - but you can be rich on a high income with no assets or like me a low income and high assets
The total lack of understanding of the wealth and privilege this brings you that many folk on here have is weird
It's fascinating watching this argument develop. IMHO the following opinions are both true:
I totally agree that anyone earning £120k should be aware of the privileged position they are in and be thankful and cognisant of the fact they are so well off compared to so many. Being ungrateful for what you have is a very ugly look.
I also agree that the really problematic issue with wealth disparity in the UK and across the world isn't with the £120k people. It's with the people further up the pole who generally didn't make their cash from PAYE. Either they earn enough to pay accountants lots of money to skew the books, or they inherited enough to pay the accountants to skew the books so that wealth continues to pass undiluted to the next generation.
BOTH of these things are true. They're not mutually exclusive.
Apologies TJ - I thought I had read a post where you had said you were a B7/8.
I will ask mods to remove my post if you like ?
divide your annual pension by 2.5 then X 100
Are we allowed to just multiply by 40?
🙂
Not at all funkydunc. I've no issue with that. easy to correct 🙂
A stat seen recently: 99% of pension savers pay in less than the current 40k threshold.
So increasing it to 60k as mooted is quite literally a tax bung for the 1%.
If that's really your priority for the country, have the balls to state it clearly.
@thegeneralist:
I totally agree that anyone earning £120k should be aware of the privileged position they are in and be thankful and cognisant of the fact they are so well off compared to so many. Being ungrateful for what you have is a very ugly look.
I don't think anyone's "ungrateful" or unaware of their "privileged" position. I actually think "privilege" is the wrong word - you could easily say a position they're in is because they studied, worked hard, made sacrifices and worked up that ladder. It's not a position they haven't earned - a privilege is a special advantage that is given to people, unearned. But regardless, that's not formed part of this argument. I'm sure people who've climbed that ladder are very aware of the financial advantage they've earned.
Privilege is a kid from a wealthy family being parachuted into a high-earning job without having to earn their stripes - and generally when that happens it certainly won't be at "chicken feed" £120k/year levels.
The argument is - without significant assets behind you, £120k doesn't make you rich. It just means you're earning very well for the moment.