An annual gross income of £74,000 puts Scott, 28, a software engineer from Leicestershire, in the top 10% of earners nationally. But, he says, it doesn’t feel that way for him and his family.
“Ten years ago we’d have been laughing with my salary. Now, it feels like our heads are barely above water. There’s an attitude that at this level of income you’ve plenty of money, but it’s not true at all,” he says.
The couple’s mortgage uses up more than a third of Scott’s take-home pay, the family’s monthly grocery shop costs more than £500, his student loan repayments are £300 – “money I now desperately need,” he says.
“We lease a car, the cost of which has risen greatly too because of higher interest rates. After all the things I have to pay for, we’re lucky to have £300 left over for the month, which is quickly depleted by day-to-day expenses. It feels like we’ve done everything we were told to do and yet we’re still struggling,” Scott says.
“I worked hard at university to gain a valuable degree, I job-hopped to drastically increase my salary – but it’s not enough. I’ve considered reducing my pension contribution just so we can have more money.
“My wife, who had stopped working to care for our two children, both under five, has been looking for work for a few months, but the kind of work she needs just doesn’t exist – remote flexitime. We’ve actually considered moving to a different country because this one feels set up against families and young people.”
He believes taxation has become punitively high: “I pay almost £2,000 a month in taxes, which I can’t actually afford.” The chancellor, Jeremy Hunt, is under pressure from voters such as Scott and many in his own party to use Wednesday’s budget to announce personal tax cuts, most likely to either national insurance contributions or the basic rate of income tax. But the chancellor’s scope for such a move has been restricted in recent days by tighter than expected forecasts, as well as warnings that public services cannot survive further austerity to pay for pre-election giveaways.
Scott has been left feeling pessimistic about the future: “I don’t see an end to any of this: life isn’t going to get cheaper and I’ve pretty much maxed out my earning potential. It’s ridiculous and I’m so sick of it.
“We can’t afford holidays. We can’t afford to put money away for the kids. We can’t afford new things, gadgets, hobbies. What’s it all for?”
Scott was just one of scores of middle-class earners who shared with the Guardian how they are struggling to cope financially and can no longer afford comfortable living standards despite having household incomes of between £60,000 and £120,000.
A report last month from the abrdn Financial Fairness Trust highlighted how Britain’s insecure jobs market and high housing costs are leading to the growth of a precarious middle class. These households are struggling to maintain a decent living standard on joint incomes as high as £60,000 a year. That compares with the median gross annual earnings for full-time employees of £34,963 last April.
Many readers who got in touch earn significantly more than this, but say they are still struggling to afford their bills and decent living standards due to rocketing mortgage, rental and childcare costs, higher household bills and the highest tax burden in 70 years.
Parents and single people in particular argue their relatively high incomes are not sufficient to fund a reasonable lifestyle while taxes are so high. Among them is Chloe, 38, who owns her own home with an £180,000 mortgage outstanding and earns £57,500 a year in a senior role a charity in Sheffield.
“Over the past six to eight months I’ve really found myself struggling to make ends meet while also not living a life completely devoid of any pleasure,” she says.
To save money, Chloe says, she has stopped drinking, eating takeaways and buying new clothes, as well as downgrading both her and her dog’s food. “I’ve also borrowed money from my parents, who were concerned by how little I was putting the heating on in my property and were worried it would cause damp.”
Chloe, who is single, says she worries about not being able to afford having children, and a social life. Her current contract comes to an end in six months. “I’m very limited in what I can do socially and couldn’t afford to go even one month without working. It’s so frustrating when you hear the government say: ‘You can work your way out of poverty.’
“Work is not an answer when you’re taxing people at such a high level. I definitely think that the tax brackets should be reconsidered.”
Matt, 32, who works in housing policy, says his and his partner’s combined household income is about £80,000 a year. “We live just outside Newcastle upon Tyne and aren’t struggling, but I know that’s because we are – and I hate the term – Dinks: double income, no kids, and living in a part of the country where costs are relatively lower.
“It does seem that the only way to be on a middle income and doing OK at the moment is to be a Dink and living in the north.”
Rose, 35, a thinktank project manager from south London and mother-of-one, strongly agrees. She earns £34,000 a year, her partner, who works in IT, makes £57,000.
“The cost of living crisis is forcing us to move outside London,” Rose says. “After our son was born we moved to a two-bedroom flat in June 2022, paying £1,500. Our landlord increased the rent to £1,700 last May. We have not been going out since 2022. No dinners, Sunday roasts, or cinema.”
Going on maternity leave, Rose says, pushed her into debt she is now repaying. Her son’s nursery bill, £1,200 a month for four days, became unaffordable when the rent went up. “He’s now in nursery only two days a week at £750 a month, and stays with me the rest of the time while I work compressed hours. Although my partner and I both work full-time, we basically earn to pay rent, utility bills, debt and childcare.”
Although respondents with children reported more precarious finances than those without, millennial childless couples say they barely have any disposable income either.
Lillian, 36, from County Durham, an environmental consultant in the corporate sector says that despite her and her partner’s combined income of £70,000, they are experiencing substantial difficulties, as their doer-upper property has required repairs costing £25,000 so far.
“We just feel caught in the middle,” she says. “We find ourselves surviving from paycheck to paycheck, have no savings except pensions. We’ve worked hard, done everything we can to build ourselves up financially, have professional careers, but it’s all fallen flat.”
While the couple was fortunate to get a five-year fixed-rate mortgage in the pandemic at only 2%, they are dreading the cost increase when they will have to renew it next year now that the Bank of England base rate has soared to 5.25%.
Lillian fears having to work into her 80s. “The Tories have done a lot to erode the benefits of working, from Brexit to interest rates, but I don’t know that I trust any party to improve that. We definitely need a lot more public spending, but it cannot come from my income bracket; we’re completely squeezed.”
Lillian believes it should be people such as Lee, 47, a father of four from Surrey who works in tech, who should pay more taxes. Earning about £110,000, he is in the top 2% of earners. “I earn more than I ever did before now and feel very privileged,” he says. “And yet, I feel much poorer now than I did six or seven years ago, when I was only on £50,000, which is crazy.”
His wife works part-time as a childminder earning about £700 a month as they cannot afford childcare, Lee says. Like many other respondents, Lee believes in paying taxes, but feels resentful given the state of public services.
“Nothing works. You think – where is all this money going? Nothing is getting better. Something’s gotta change.
“It’s weird when papers describe the rich and I think – ‘is it people like me?’ I feel jealous of other people when they go on holiday, we can’t afford that. I shop at Aldi, 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 it?’”
