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Old 11-20-2023, 05:18 AM   #16
valeoak
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Quote:
Originally Posted by Samsonite2010 View Post
I scanned through the articles and it looks like the 29,500 is gross salary. I am probably wrong, but could not see a reference to net. When talking about salaries, it tends to be gross unless specified otherwise. Again, maybe I need more coffee and to re-read!
The headline annual figure is gross, but the weekly figures are net (unless otherwise stated). I quickly converted to net annual figures as that's what hazel used.
 
Old 11-20-2023, 05:43 AM   #17
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Right, so the difference is not huge.

Rent/Mortgage is the biggest expense and far more than it used to be, so if you are mortgage free, that is a huge burden lifted today (obviously varies wildly depending on location).

E.g. for my parents (recently retired), they paid 48k for a 5 bedroom house in a nice area, which was about 1.5x salary in 1986.

When I bought my first house in 2006, it was a 2 bedroom bungalow out in the sticks for 220k, it was 6x my salary.

Many years later, I finally have a 5 bedroom house, similar to what I grew up in and it is currently worth 40x what my salary was when I bought my first house. The point being that even though it was difficult financially for me to get on the ladder almost 20 years ago, for a first time buyer today, it is almost impossible. My salary has probably only gone up 20% or so since I bought this house, but the house has doubled in value. Rental value would be 3000 per month, which I don't think I would be able to afford.
 
Old 11-20-2023, 06:03 AM   #18
valeoak
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Quote:
Originally Posted by Samsonite2010 View Post
Right, so the difference is not huge.
That depends on your definition of huge. To take their 2023 figures, an annual gross income of 20,480 for a single pensioner produces a weekly gross income of around 392.76. When subtracting Income Tax and adding in the Winter Fuel Payment to which the pensioner would be entitled, their weekly net income is 366.26, or roughly 7% smaller. Would you want a 7% pay cut?

Of course, for the headline figure for a single working-age adult (which is what I believe hazel has quoted), the difference between gross and net is bigger because of National Insurance "Contributions" (i.e., an age-related additional tax on income) and the lack of the Winter Fuel Payment. And whilst not strictly contributing to the difference between gross and net income, pension contributions are also a factor.

Quote:
Originally Posted by Samsonite2010 View Post
Rent/Mortgage is the biggest expense and far more than it used to be, so if you are mortgage free, that is a huge burden lifted today (obviously varies wildly depending on location).

E.g. for my parents (recently retired), they paid 48k for a 5 bedroom house in a nice area, which was about 1.5x salary in 1986.

When I bought my first house in 2006, it was a 2 bedroom bungalow out in the sticks for 220k, it was 6x my salary.

Many years later, I finally have a 5 bedroom house, similar to what I grew up in and it is currently worth 40x what my salary was when I bought my first house. The point being that even though it was difficult financially for me to get on the ladder almost 20 years ago, for a first time buyer today, it is almost impossible. My salary has probably only gone up 20% or so since I bought this house, but the house has doubled in value. Rental value would be 3000 per month, which I don't think I would be able to afford.
Was this aimed at me? Whilst I don't disagree with what you've said, I'm not sure what it has to do with the analysis I did.
 
Old 11-20-2023, 06:09 AM   #19
Samsonite2010
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Quote:
Originally Posted by valeoak View Post
That depends on your definition of huge. To take their 2023 figures, an annual gross income of 20,480 for a single pensioner produces a weekly gross income of around 392.76. When subtracting Income Tax and adding in the Winter Fuel Payment to which the pensioner would be entitled, their weekly net income is 366.26, or roughly 7% smaller. Would you want a 7% pay cut?

Of course, for the headline figure for a single working-age adult (which is what I believe hazel has quoted), the difference between gross and net is bigger because of National Insurance "Contributions" (i.e., an age-related additional tax on income) and the lack of the Winter Fuel Payment. And whilst not strictly contributing to the difference between gross and net income, pension contributions are also a factor.



Was this aimed at me? Whilst I don't disagree with what you've said, I'm not sure what it has to do with the analysis I did.
Apologies, I was both replying to you first, then replying to the original thread - probably should have done two posts instead.
 
Old 11-20-2023, 06:42 AM   #20
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Quote:
Originally Posted by hazel View Post
1) I own my house outright, so I pay neither rent nor mortgage.
Lowest average rent in Greater London is around 1,250 per month (15,000 per annum).

In fact you have significantly more disposable income than a single person who doesn't own their own home, living on 29,500.

You also don't run a car, nor presumably have to pay for a rail season ticket or other travel expenses.

That is all.
 
Old 11-20-2023, 06:51 AM   #21
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Quote:
Originally Posted by _blackhole_ View Post
You also don't run a car, nor presumably have to pay for a rail season ticket or other travel expenses.
When I worked, I had a rail season ticket and it was my single largest expense. But in those days, I didn't have to pay my own food bills. I had an arrangement with my mother: she paid for the food for both of us and I paid the quarterly bills. Sadly she died just before the turn of the millennium.

The consensus here seems to be that not having accommodation or transport costs is enough to explain the difference between me and most other people. So I'm not that unusual after all .
 
Old 11-20-2023, 08:22 AM   #22
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Others are not so fortunate. Many don't inherit their family homes - they are forced to sell in order to pay for care for their elderly parent(s), or to split the proceeds with siblings.

In fact 29,500 is not a lot. It seems to me that these researchers are way off in their calculations. Many right now are actually trying to raise a family and pay soaring energy bills and rent on that kind of money... it's all because of Brexit and the selfish and ignorant people who voted to leave.
 
Old 11-20-2023, 08:54 AM   #23
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Quote:
Originally Posted by valeoak View Post
Hence we come to my point: if hazel's reported income is net income (which as I explained in my post it was reasonable to conclude because of her reference to monthly savings), then she is earning around 10,000 (24,000 - 14,000) net more than what is considered (by this arbitrary standard) the minimum annual net income necessary for somebody in her situation.
It seems you took my post as a retort to yours. I meant rather to add to it, giving a source which uses 2023 numbers directly without the reader having to make inflation calculations. I should have explained my intention when quoting you; sorry for the confusion.

Quote:
Originally Posted by _blackhole_ View Post
In fact 29,500 is not a lot. It seems to me that these researchers are way off in their calculations. Many right now are actually trying to raise a family and pay soaring energy bills and rent on that kind of money...
I believe the 29,500 is specifically meant to be a "minimum" for a single person with no dependants.
 
Old 11-20-2023, 01:10 PM   #24
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Their questionnaire said 40K for two (my wife and me). It feels about right, renting in SW England, which isn't overly expensive, and working from home.

But if I were still living in London commuting to work via TFL (which my wife called "Torture For Londoners" - a shame she didn't post it on Twitter, it would have gone viral!) , 40K would be a real struggle for two people.

PS: biggest monthly cost is food, which is organic as much as we can. I am aware it is a bit of luxury we wouldn't be able to afford on 40K.

Last edited by MightyBaba; 11-20-2023 at 02:12 PM. Reason: Biggest cost
 
Old 11-21-2023, 07:45 PM   #25
leclerc78
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If I have to do it again, I think the only most important lesson I would give to my kids is the danger of long term composed interest - mathematically.

Last edited by leclerc78; 11-21-2023 at 07:47 PM.
 
Old Yesterday, 11:19 PM   #26
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'Imputed rent' is the calculated value of lodging. It's used in the US to calculate what a person's income is for income-based programs and taxation. On this basis, you'd calculate the fair rent you'd collect on your home, subtract the expenses, and add that to your notional income. If the company is giving an employee a free place to live, that's taxable income. If a pensioner living in a home s/he owns is looking for welfare benefits, the imputed rent would be added to her/his income. On this basis your income is higher.

When a local business calculated a living wage, using a standard from somewhere or the other, a large fraction (so it seemed to me) was for grooming: haircuts and the like. I shave my own head a couple of times a year, cut my own nails, etc. If I were you I'd investigate the components of their calculated minimum income to see why you're different. If you live in London, it may all be imputed rent.
 
Old Today, 01:44 AM   #27
hazel
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Quote:
Originally Posted by RandomTroll View Post
When a local business calculated a living wage, using a standard from somewhere or the other, a large fraction (so it seemed to me) was for grooming: haircuts and the like. I shave my own head a couple of times a year, cut my own nails, etc. If I were you I'd investigate the components of their calculated minimum income to see why you're different. If you live in London, it may all be imputed rent.
Several other people have come up with housing costs as the big issue. Of course I do have some; I have to insure my home and maintain it, but that manifests as occasional big outlays rather than a steady drip. It's the kind of thing that can tip a poor person who is just about managing over the edge and into debt, but it's OK if you have some savings.

Grooming costs are something that I never considered. I have virtually none. I trim my own hair each time I wash it, don't have manicures, and I almost never buy clothes. Why should I? I have enough and don't follow fashions. I'm still wearing some things I had as a teenager. And I have a penchant for finding things. My mother taught me that; she was always coming home with knicknacks or items of clothing and saying, "Look what I found!". She used to accuse me of going about in a dream with my eyes shut, but now that I'm old, I find things too.
 
  


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