No, You're Not 'Struggling' On A £100,000+ Salary

Man in fancy suit at workThere’s no denying money doesn’t get you as far as it did mere years ago. Bills went up this month, the cost of living is on a seemingly unstoppable rise, and new figures show that the salary needed to buy homes across the UK has ballooned.Perhaps that’s why I’ve seen so many headlines proclaiming the same thing; people on sic figures, publication after publication claim, are now feeling the financial pinch too. A Telegraph article reads: “When I saw the news that the point at which the 45p income tax rate kicks in is falling to £125,140, I had to laugh. By a whisker, it raises me into the lofty realms of the country’s wealthy elite – which is a very long way indeed from how I feel.” It is easy to say “boo fucking hoo” to sentiments like that, partly because being well-off isn’t a “feeling” – in their case, it’s a quantifiable fact.But if people on six figures say they’re feeling the pinch, what on Earth does that mean for the rest of us?So, I thought I’d speak to people who self-identified as having “high salaries” about how the last couple of years have affected them. I also spoke to Felix Koenig, assistant professor of economics at Carnegie Mellon University’s Heinz College with an interest in the drivers of inequality, about the topic.“It doesn’t look like we make seven figures” “I live a smaller life and within a smaller budget that wouldn’t look like we make seven figures,” one respondent told us. “My car is an older cheaper car... we’ve chosen to live somewhere more affordable.” But that is with the “goal of retirement in my 30s, which is only five years away.” Meanwhile, another pair said: “We are a high-earning couple (500k+ household income), and while in our own friend circles, we are probably the lowest earners, we do feel that we are well off.” “Even after travelling a lot and living in comfort, we do save 50%+ of our income each year,” the source added. “The data speaks for itself.” Still, they claim, “We have friends who own multiple houses, earn a million a year, and yet seem to be stressed about money.” “Despite my earnings, I can’t say I haven’t also felt the impact of inflation,” another CEO told HuffPost UK. “The cost of everything has gone up (groceries, utilities, services) and although my family and I do not struggle, it has changed how I think about spending.” Though he thinks the definition of “comfortable” has changed, the successful businessman says, the pinch seems to have been felt more in theory (he is more cautious when saving and investing) than in real terms.So, what does the expert say?“Recent inflation spikes have squeezed incomes across all population groups, not just the top,” Dr Koenig told us.That pressure affects poorer workers far more, though, and “the top 10% highest earners have not lost ground – in fact, their share of overall income has slightly increased since 2020.”Still, the professor admits, “Some groups have been hit harder by inflation than others. Costs for essentials like housing and childcare have risen significantly faster than overall inflation, disproportionately affecting younger households.”But in general, he says, “While there are examples of people [with higher salaries] experiencing declining living standards, this is not a broad-based phenomenon.” This leads us to a worrying trend among the “worried wealthy” – as inequality deepens in the UK, Gerry Mitchell and Marcos González Hernando found in their book about the top 10%, Uncomfortably Off, more influential high earners who write themselves off as “not that rich” increasingly turn their backs on less-well-off people. And panicked super-high earners (those making over six figures are in the UK’s top 2%) people sink their money into assets, they add; assets which they “hoard” to give advantages to their children, and which can be harder to tax.So, for the sake of the rest of us, please don’t mistake your six-figure salary for penury; it may make life for those truly slumming it far worse.Related...'I Chucked My Sister Out Of My Home After Her Money Comment. Was I Wrong?'Rachel Reeves Slaps Down Deputy For Comparing Disability Cuts To Removing Pocket MoneySenior Minister Compares Disability Cuts To Reducing His Children's Pocket Money