Are earnings too low / living costs getting too high??

We have a decent minimum wage with another increase kicking in next month, the problem is the value of the pound has plummeted since that vote of misinformation last summer, making a lot of goods expensive now (not helped by gouging by some companies). While at the same time, we have silly house prices and rental prices, partially thanks to decades of successive governments doing far too little to match house building with an increasing population size and incentives that encouraged some to Buy To Let in the last ten years or so.

I hope I'm wrong, but I'm expecting recession-esque times to kick in again over the next few months, families like mine have been able to treat themselves to some luxury items in the last couple of years. But how things have changed since that vote last summer, some might be binge buying now in anticipation of further price hikes after Article 50 is invoked, but sooner or later I think a lot of us will simply stop buying such items and will start worrying about long term financial issues.
 
People's cost profiles have changed, they now buy more stuff than they did in years gone by. In the 80's I had a TV licence and the odd video rental. No Sky, no Netflix, no Amazon prime. I didn't have a mobile phone, I didn't have an internet. My car cost me 40 pounds a month on a bank loan. My first house cost me 51K and the mortgage I seem to recall was around 400 quid a month, but that was it. I had a home telephone bill, my mortgage and that was pretty much my fixed outgoings.

Today people have a mortgage, cars, pensions, medical insurances, tv services, internet services, credit cards etc etc etc

Times have changed, people believe they have a better standard of life when what it really means is they have more access to stuff they can buy with a payment per month and society demands and pressures them to entitlement without ability to fund more often than not. Everything is a service these days and people have the mindset of it's only x per month so I'll have some. They do that a few times and it all mounts up.

It's the "yea I find it really hard, but I can't do without Sky of course, or my internet, or my mobile phone, or my new car every 3 years, or my posh holiday, or my nice clothes or my....." mindset.
 
Housey said:
People's cost profiles have changed, they now buy more stuff than they did in years gone by. In the 80's I had a TV licence and the odd video rental. No Sky, no Netflix, no Amazon prime. I didn't have a mobile phone, I didn't have an internet. My car cost me 40 pounds a month on a bank loan. My first house cost me 51K and the mortgage I seem to recall was around 400 quid a month, but that was it. I had a home telephone bill, my mortgage and that was pretty much my fixed outgoings.

Today people have a mortgage, cars, pensions, medical insurances, tv services, internet services, credit cards etc etc etc

Times have changed, people believe they have a better standard of life when what it really means is they have more access to stuff they can buy with a payment per month and society demands and pressures them to entitlement without ability to fund more often than not. Everything is a service these days and people have the mindset of it's only x per month so I'll have some. They do that a few times and it all mounts up.

It's the "yea I find it really hard, but I can't do without Sky of course, or my internet, or my mobile phone, or my new car every 3 years, or my posh holiday, or my nice clothes or my....." mindset.
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That's the UK population of today. Its ok to buy the latest iDevice on whatever stupid amount of money on a lengthy contract, which cost more buying the phone out right with a sim only contract or Pay As you Go sim.

What gets me, and my friends are guilty of this. Sky and Virgin TV sub increases..

Scenario 1

Friend: WTF Sky have increased prices again by £3.50....I already pay X amount for it! They do this every year!
Me: Well, why dont you cancel? Stick to Freeview or FreeSat.
Friend: I cant because the misses "tapes" her programs.
Me: What TV programs does she "tape"
Friend: (Lists all the crappy soaps and reality TV programs).
Me: So she records all the same programs which are available on iPlayer, 4oD, iTV hub and My5. Which you can watch anytime without paying for a Sky TV subscription.
Friend: Oh yeah....never thought of that.

Scenario 2

Friend: Virgin have increased the TV prices again....I already pay X amount for it!
Me: Well, why dont you cancel? Stick to Freeview or FreeSat.
Friend: I cant because of the kids channels.
Me: The same kids channels I see when I go to your house and your kids have the TV on in the background while they are on the tablet or portable game console.
Friend: ..........
Me: Exactly, I bet they wouldn't even noticed because its the same kids TV shows are repeated from 5 years ago and now available on legal free streaming sites.
Friend: Yeah that's true.


:rolleyes:
 
People have built up to a certain standard of living, which seems completely artificial compared to even 30 years ago. I think that is starting to change again, as like a poster said above, I too am starting to see people with rather big expensive houses not running rather big expensive cars any more.
People are cutting back on spending, the problem is when you are on the bottom already there's not so much you can cut back. When even people in full time work have to claim benefits just to get by then something is very wrong, and eventually it is all going to come crashing down.
 
Rental market needs to be controlled:
  1. Cap rents at less than 3% of property value
  2. Increases in re t can follow no.more than inflation for current tenants.
  3. Rented property must not be mortgaged, e.g landlord needs to own outright.
  4. Rental contracts need to be indefinite, e.g. a landlord cannot evict those paying rent on time unless exceptional circumstances including substantial renovation or selling property.
  5. Minimum standards in room sizes, turning quality, safety, maximum age since previous renovation, etc.

Also, a 1.5% private property tax will help rebalance home ownership. Abolish council tax but introduce a local income tax.

Minimum wage needs to increase 50%. Increase tax free allowance, replace lower tax rate with 40%.
 
malachi said:
Or by automation.

Also many are not willing to get skilled up to earn a higher wage. Rather blame the system or other people.
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You might be missing my point: more skill no longer means higher wages - if it ever did. Wages are dictated by a whole raft of factors, but essentially they are down to leverage: the better your lever, the better your pay. It doesn't matter how skilled you are if (for example) a lot of other people have the same skill set as you. The law of supply and demand means that your skill isn't worth a pay-rise. But you can be an utterly unskilled (say) manager and still command a high salary if you have the right leverage. Say, the right friends, or the right reputation (and reputation does not come from skill either). You strike me as another of those people who confuse Capitalism as read in textbooks with how it actually operates in the real world.
 
So much socialist nonsense.

Those that earn well got there by trying hard (minus the trust clowns and their rich daddies).

Oh just because someone owns a couple of new build BTLs doesnt make them some sort of evil "tycoon"! They worked for that money and they INVESTED wisely. They didnt **** it up the wall on second hand motors and rolexs...
 
FurryLemon said:
So much socialist nonsense.

Those that earn well got there by trying hard (minus the trust clowns and their rich daddies).

Oh just because someone owns a couple of new build BTLs doesnt make them some sort of evil "tycoon"! They worked for that money and they INVESTED wisely. They didnt **** it up the wall on second hand motors and rolexs...
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Regardless there is a problem building up.
 
It definately feels like being a consumer is becoming a lot more expensive. You have companies like apple charging outrageous prices and it seems to be working for them and others seems to be following suit as of late. I feel like ever since the proliferation of social media things have been going downhill quick.
 
Meridian said:
You strike me as another of those people who confuse Capitalism as read in textbooks with how it actually operates in the real world.
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No, Im a firm believer of you get what you put in. You work hard, get the right skills then you won't be left on the sideline if things goes to crap. You will stand out more and be more successful even against the people who BS'ed their way to the top. Its easier to do the typical British thing and moan without actually doing something about for yourself.

If you sit there and do nothing then you get nothing.
 
malachi said:
No, Im a firm believer of you get what you put in. You work hard, get the right skills then you won't be left on the sideline if things goes to crap. You will stand out more and be more successful even against the people who BS'ed their way to the top. Its easier to do the typical British thing and moan without actually doing something about for yourself.

If you sit there and do nothing then you get nothing.
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I know plenty of people who've seen a skill gap, put in a lot of time and effort getting qualifications and/or experience only to find a load of people have done the same and either the roles are filled up or wages are suppressed by the now availability of people with the skills.

There are also plenty of people who have made it good just being in the right places at the right time.
 
Rroff said:
I know plenty of people who've seen a skill gap, put in a lot of time and effort getting qualifications and/or experience only to find a load of people have done the same and either the roles are filled up or wages are suppressed by the now availability of people with the skills.

There are also plenty of people who have made it good just being in the right places at the right time.
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So do I, working in the public sector I see it all the time. But if people are going to work hard and get skilled up then they also need to be clever and think about what they working hard towards. Whats the point working hard towards a job when 1000 people can or are doing the same job? Just like being a teacher, policing or even doing general IT. The market is oversaturated market for those sectors now so you wont get good pay for it now compared to 20 or 30 years ago. Doesn't help either they also rised the barrier for entry to reduced the numbers.

I agree with a lot of people in this thread, yes rent prices in most of the UK is sky high and wages do not match but at the end of the day, that's the world we now live in. If the landlords were clever enough to see where the market was going and buy enough houses to make profit then I don't blame them. They got on board before everyone else noticed and tried to do the same.
 
FoxEye said:
You've lost the plot and are now just taking the mick.

Meanwhile, in the real world, things are nowhere near how you perceive them to be. Just because you aren't struggling, and can't empathise with those who are - perhaps you don't mingle with those so far beneath you - doesn't mean they don't exist.

Like I said earlier, many people here think everybody must be middle class because they are. Not so.
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Would be nice if people could for once be honest as to WHY they're struggling. From what I've directly experienced firsthand, 90%+ of the time it's due to their stupidity with money and life, not for lack of earnings. But as always, so much easier to blame outwardly than look inwardly.
 
Psycho Sonny said:
TV - is what £150 a year unless you **** sky then it's £1000 a year

Broadband - is what cheapest £20 a month and most expensive £45 a month depending on speed

Phone - You can buy yourself a moto g for £150 it will easily last 2 years so £75 a year plus a giffgaff sim for what £7.50 a month it's not a huge spend unless you want an iphone, then it's ££800 a year

Car - probably the most expensive item after a home. these are now available cheap thanks to dacia, running costs are high but always have been. unless you need to have a BMW then yes it will cost you a fair whack.

Computer - Buy second hand off members market for half the price

Holiday - Costs peanuts these days. Flights to Berlin, marrakech, Milan, amsterdam, tenerife all available for around £50 return thanks to ryanair and easyjet. It's only if you want to go to Vegas, cancun, thailand, australia, dubai and the likes it will cost you thousands. You can get a week away abroad in a decent hotel for about £400-£500 these days. then you need spending money on top.

Smart Clothes - Anyone who has half a brain doesn't really care about this. I know millionaires who wear the same pair of adidas trainers as those on job seekers do. Only materialistic people need to have Louis vuitton, ralph lauren, etc. You can get quality shirts for less than £30 in M & S, etc which should last a couple of years. Go to Primark and you get stuff which doesn't last as long but is much cheaper. I don't shop in primark but I do have a lot of t shirts from Qwertee that I paid £4 each for in their sales. Clothes now are cheaper than ever before unless you want a big HUGE brand name on it.

Eating Out / Take Away - I hardly ever do this for 2 reasons. I have a very high bar when it comes to food. Most restaurants and take Aways fail to hit this bar and I can make better food than them and for much cheaper. I possibly do this once every 2 months I personally prefer to eat @ home or @ friends/families houses.

Going out - I go to friends and families houses a lot. Maybe go out to other places once a month on average. It's not a huge expense if you pre-drink or just go out for a meal. I'm going to the Drake concert for instance but the only expense will be the tickets, parking and fuel. A whole night out for around £70. Then on other occasions go out for the day to a shopping centre to see if anything takes your fancy. Mainly though visiting friends and family which costs nothing in fact if they feed you which always happens it's actually saving you money on groceries.


You can enjoy life without spending millions of money. Obviously being able to afford nicer things makes your experiences more rich. As in Thailand is a lot better culturally than tenerife, etc. But if all your looking to do is go somewhere hot and relax tenerife ticks the bill.


Some people spend £10,000 on home cinemas. You can have a similar experience in your own home for £1300. £500 - projector HD27. Screen - paint on wall for £50 or cheap one off ebay for £100. amp and speakers - £700. You will get just as much enjoyment from that system as anyone would from a £10K one IMO it just won't be as refined.

the problem is people on low salaries want all the things on those with high salaries have. that is never going to happen. you will need to settle for a ford focus over a BMW.
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This.

I started replying but then I realised he's only using examples that he's seen IRL or stuff that's important to him

To take his list

TV - No TV license here. We don't have normal TV anyway, we stream.
Broadband - Granted. We pay around 50 a month, unlimited
Phone - Through work. If not, about 9 bucks a month
Car- Through work. If not, I'd buy a cheap POS and use it once a week. Otherwise I bike or walk
Computer - Big one of cost every few years. I don't upgrade every 3 seconds
Holiday - Cheap as chips
Smart Clothes - Couldn't care less. Buy my/our clothes 2nd hand and wear the same stuff week in and out. Not interested in impressing anyone
Eating Out - Don't bother. If we do, extremely rarely.
Going out - To friends. It's free or cost minimal

We can do all of this on NMW if we needed to.
 
This thread seems to have become a bit too focused on what you can do on minimum wage or whatever - but I think the OP was talking more about the affordability of a lifestyle commensurate with a given wage where housing costs are fast becoming a big, though not the only, factor in redefining what that means. Sure if you are earning below average wage you might have to limit your expectations somewhat but its not unreasonable to expect that someone earning an average wage could afford an average house, an average car, etc. etc. without having to make too big a sacrifice in any one area - or alternatively a bigger sacrifice in some areas if they wanted a nicer house, etc. but increasingly if you were say earning an average wage you are looking at property affordability that is far lower down the ladder or making considerable sacrifices in some areas of your lifestyle to afford a fairly average house.
 
D.P. said:
Rental market needs to be controlled:
  1. Cap rents at less than 3% of property value
  2. Increases in re t can follow no.more than inflation for current tenants.
  3. Rented property must not be mortgaged, e.g landlord needs to own outright.
  4. Rental contracts need to be indefinite, e.g. a landlord cannot evict those paying rent on time unless exceptional circumstances including substantial renovation or selling property.
  5. Minimum standards in room sizes, turning quality, safety, maximum age since previous renovation, etc.

Also, a 1.5% private property tax will help rebalance home ownership. Abolish council tax but introduce a local income tax.

Minimum wage needs to increase 50%. Increase tax free allowance, replace lower tax rate with 40%.
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I will put my neck on the line to respond here -

I am a BTL Landlord. I have 2 'premium' properties into which I have invested almost every penny I have saved over the last 15 years.

They are my pension to be. They return 3.6% PA and will provide an income (split between myself and my wife), of about £40k per annum (before costs). I have benefitted from the rises in prices over the last 15 years, but do I consider myself a drain on society? no for the following reasons;

1. I look after my tenants - like any 'business' customers should come first.
2. I don't force tenants to rent either of my properties. There are significantly cheaper options available in the same area, but some tenants want to pay for the premium property - Often expats working in the UK for several years.
3. I invest in and maintain my properties to a high standard, it is foolish not to. I invested over 30k this year in improvements for the long term.
4. I am unencumbered - I have put everything I have into paying off my mortgages to realise the opportunity of a balanced and secured income in retirement.
5. I have never threatened or evicted anyone.

I agree that at the lower end of the market some (but not all) landlords could be considered to be taking advantage (and do), but many/most are not, (It works both ways with some tenants also taking the p***!!). For many like me it is a legitimate method of investing money, and I do not believe I take advantage of people, though I expect in every industry there will always be some who do. To be a landlord is not the easy option many assume, it is hard work to get there, and not without risks.

Ironically if I wanted to exit the industry (and I don't) the actions of the government in the last 3 years have made it far harder to do so, and not easier to sell my properties. I suggest the focus of venom should be on a government who seems intent on creating rules which lock landlords into current investments, increase costs (which go to tenants) and restricts building / available property, therefore driving prices ever upwards.

I am merely trying to balance my future income against a desire to have some sort of living standard for myself and my family in the future, something I have saved hard to achieve for 20+ years.

Martin
 
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