The salary question?

[jaybee]

In which case the system is broken then.

Yes...

lol

And that graph is only average house price. Try buying a house in London / South East for 220,000 and see what you get.

 

[HACO]

The system has been broken by property speculators and estate agents routinely increasing housing prices almost weekly without any other reason than greed. The BTL crowd also haven’t helped.

The system is broken because supply hasn't caught up with demand at all. And if you want to build you can't get a planning permission because current homeowners will flood the city council with objections because they're afraid their house prices might increase at a slower rate if supplies were to increase.

We're probably 10 million houses short in this country.

 

[builder22]

The most obvious solution would seem to be not living in London!

 

[Captain]

What's your role and location?

Same as for you! Salaries are nothing without context!

Ultrasonic inspection based in Birmingham.

 

[jaybee]

The most obvious solution would seem to be not living in London!

I'll just find a place up north that has good schools for the kids, tell work I won't be ever coming into the office again, tell my family and friends I won't be seeing them much ever again and the kids that they will have to say good bye to everyone/thing they've ever known as well, and move up next week. Should be easy enough.

 

[Tom_ed1987]

I would openly discuss salary with friends; not with anyone else in work though.

I'll just find a place up north that has good schools for the kids, tell work I won't be ever coming into the office again, tell my family and friends I won't be seeing them much ever again and the kids that they will have to say good bye to everyone/thing they've ever known as well, and move up next week. Should be easy enough.

To be fair, you probably won't need to go into the office much more so that's a big one ticked off

 

[jaybee]

I would openly discuss salary with friends; not with anyone else in work though.


To be fair, you probably won't need to go into the office much more so that's a big one ticked off

COVID I really do hope will help shape a different approach to office based jobs vs location. It's a whole other topic but... really hope it helps shift to more wfh and help spread out the population.

 

[shiver]

My wife and I are lucky enough to be able to afford a place in London but it's painful how much (or little) you get for you money. Many friends also working in the city have bought property but usually a shared ownership scheme of some sort. They all have decent jobs, partners also working but the sums just do not add up for them.

We already had plans to move out to a commuter belt (like Hertfordshire) and the lockdown has solidified that choice to try and get more space. I'm hoping that both our employers will be open to us working from home 2 days a week as standard going forward.

Edit: and to be more on topic - I don't really discuss exact figures with most friends but just the above situation suggests how much each person is taking home

 

[Tom_ed1987]

I presume you have children? Being in the lower end of that bracket gives you what I consider to be an insane amount of disposable income as someone without dependants. As in, anything you could possibly want to do, you can do with some compromise. I actually reduce my income via salary sacrifice (pension) to stay below that threshold, since I have no need to have any more income on a monthly basis.

For reference to others, you’ll be getting about £3k into your account per month post tax on PAYE at the very bottom of the 40% threshold, which is £50k pa gross.

Big generalisation here, but IMO in a lot of industries £50k presents a sweet spot between salary/hours/responsibility/pressure/work life balance. Beyond that the responsibility really racks up, taxed more obviously, you lose allowances etc.

A couple both working relatively easy 35 hr weeks on £50k each have it very good.

 

[Greebo]

Big generalisation here, but IMO in a lot of industries £50k presents a sweet spot between salary/hours/responsibility/pressure/work life balance. Beyond that the responsibility really racks up, taxed more obviously, you lose allowances etc.

A couple both working relatively easy 35 hr weeks on £50k each have it very good.

Unless you live in London it seems and that wont even get you an undeveloped 30 year council flat.

But for the rest of the country, that is a very,very good living.

 

[Nitefly]

Big generalisation here, but IMO in a lot of industries £50k presents a sweet spot between salary/hours/responsibility/pressure/work life balance. Beyond that the responsibility really racks up, taxed more obviously, you lose allowances etc.

A couple both working relatively easy 35 hr weeks on £50k each have it very good.

Yeah, that would be the dream *cries*.

As I mentioned earlier, I artificially keep myself below that threshold via salary sacrifice (so I’m paid as if I were at the threshold).

It’s a completely different conversation, but it does astonish me how many people earn above the threshold, get taxed at 40% and use the extra cash to pay off their mortgage. It is insanely more tax efficient (and just generally better) to salary sacrifice and put it into your pension untaxed.... ‘IMHO’.

 

[Dirk Diggler]

Yeah, that would be the dream *cries*.

As I mentioned earlier, I artificially keep myself below that threshold via salary sacrifice (so I’m paid as if I were at the threshold).

It’s a completely different conversation, but it does astonish me how many people earn above the threshold, get taxed at 40% and use the extra cash to pay off their mortgage. It is insanely more tax efficient (and just generally better) to salary sacrifice and put it into your pension untaxed.... ‘IMHO’.

It's only a good idea if you're marginally over the threshold, but when you're substantially over the threshold then you just need to accept that 40% is your tax rate.

 

[HACO]

Yeah, that would be the dream *cries*.

As I mentioned earlier, I artificially keep myself below that threshold via salary sacrifice (so I’m paid as if I were at the threshold).

It’s a completely different conversation, but it does astonish me how many people earn above the threshold, get taxed at 40% and use the extra cash to pay off their mortgage. It is insanely more tax efficient (and just generally better) to salary sacrifice and put it into your pension untaxed.... ‘IMHO’.

Except you don't know what happens to that pension pot.

Will current taxation laws apply when you retire (presumably in a few decades)?
Will the access age still be 55?
Will you have that 25% tax-free withdrawal?
Will the state pensions be means-tested based on private pensions?
Will there be a private pension raid like it has happened in many other countries?

Whatever you put into a pension is at the mercy of the government. I do put extra in my pension, knowing full well that I may end up paying more tax on them upon withdrawal than the current 42%.

 

[HACO]

It's only a good idea if you're marginally over the threshold, but when you're substantially over the threshold then you just need to accept that 40% is your tax rate.

It's not really 40% versus 20% either. When you take into account NI it becomes 32% versus 42%.

 

[Nitefly]

It's only a good idea if you're marginally over the threshold, but when you're substantially over the threshold then you just need to accept that 40% is your tax rate.

I suppose it depends. I know someone on around £90k that does exactly the same. Smashing dat pension!

Except you don't know what happens to that pension pot.

Will current taxation laws apply when you retire (presumably in a few decades)?
Will the access age still be 55?
Will you have that 25% tax-free withdrawal?
Will the state pensions be means-tested based on private pensions?
Will there be a private pension raid like it has happened in many other countries?

Whatever you put into a pension is at the mercy of the government.

Yes, it is definitely a risk, as with everything. My starting point is that ~5-9% interest on every untaxed £1 earned is, IMO, a lot better than getting 60p and using it to pay off a loan that’s only accruing interest at 1-3%.

Horses for courses.

 

[Basher]

Except you don't know what happens to that pension pot.

Will current taxation laws apply when you retire (presumably in a few decades)?
Will the access age still be 55?
Will you have that 25% tax-free withdrawal?
Will the state pensions be means-tested based on private pensions?
Will there be a private pension raid like it has happened in many other countries?

Whatever you put into a pension is at the mercy of the government.

Exactly, unless you're marginally over, it's always better to take it out vs relying on a pyramid scheme controlled by others.

I personally wouldn't use the extra to pay off the mortgage, but you can certainly get a better return than 5%-9% on investments

 

[Raymond Lin]

Tesla Stocks!!!!!

 

[Martynt74]

Is it? Give us some examples then? I think it's very judgmental to base income on cars, holidays and houses. What if someone knows someone that owns a property and gets good rates and only pays flights? What if they work for an airline and get discounts? What if they only holiday big once every few years? What if their awesome cars are leased for just 1 year. A 4 bed house does not indicate significant wealth. It depends on location and circumstances. Whether the couple both earn well. Maybe there was some inheritance but they still don't earn a lot. Maybe they get topped up by ex partners paying child maintenance. Maybe they won at a casino a few years back. Could be all manner of things at play.

To be fair i did add a bit at the end (which you seem to have cutout of your quote) that mentioned within my group of friends. I know their spending habits, i know the areas they live, i know their childcare cost etc. I can safely know that a friend who decided to go to Australia with wife and 2 kids for 3 weeks on a whim will have more money that i do

You don't need to know their salary to know their rough income.

 

[Allnamestaken]

If two people are having a conversation and disclose their salaries you can guarantee 100% that one of them will walk away feeling aggrieved. It's human nature and therefore I will never discuss mine. I've also been burnt in the past. In one of my older jobs I was training up a new guy and found a digital copy of his payslip on one of our shared machines. He was on £5k more than me (at a <£25 salary so the difference was huge and very noticeable due to working in London). I was solely responsible for getting him up to speed and had been declined pay rises on numerous occasions. It was a terrible company and that was pretty much the straw that broke the camel's back before I left.

That said I always wonder what people earn, especially my close friends in different industries. I also walk down our street and wonder how these people afford the houses, then an Audi or a Range Rover... when my girlfriend and I are on probably fairly normal London wages, pay less than the market-rent (nice landlords) yet besides putting away a fair amount every month in a vain attempt to save a deposit.. don't really have all that much left to play with Our street has a whatsapp group (due to COVID) so it's now possible to look people up on Linkedin and judge them even more. E.g. the guy who bought the £1.5m house opposite our flat has a very ordinary job title in a media company. Can't be getting paid that much yet has two cars (one new Range Rover), two kids.. the mind boggles how their finances work Maybe they won the lottery

What is your job title and how much do you get paid?
What is your job title and how much do you get paid?
What is your job title and how much do you get paid?
What is your job title and how much do you get paid?
What is your job title and how much do you get paid?
What is your job title and how much do you get paid?
What is your job title and how much do you get paid?

Haha, I'm working security right now until I can open up my business again lol, so £10 an hour haha.

I'd say on average £2k/month.

 

[Nitefly]

Exactly, unless you're marginally over, it's always better to take it out vs relying on a pyramid scheme controlled by others.

I personally wouldn't use the extra to pay off the mortgage, but you can certainly get a better return than 5%-9% on investments

But remember, you’re starting with 60p (or rather 58p with NI considered) rather than a full £1.

You’re absolutely right though in saying that pensions are a risk and you have less control over them.