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Average UK income?

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  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Wyetry wrote: »
    Lol i think i'm very lucky that i was able to buy somewhere in london when i earnt well below the average wage!

    :lol:

    You must have bought quite a long time ago! ;)
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel wrote: »
    I count myself very lucky that I am able to earn well above that, and yet would still find it hard to buy a half decent property in London.
    Really? You can get a "half decent property" for about £400k. Assume you put 10% deposit down, pay 5.2% interest and have a 30 year term, that's £2.5k a month - affordable on £60-70k which I think you said you were earning?

    To answer the original question, it's a bit pointless trying to figure out the "average" pay in the UK as it varies so widely (a) by region, (b) age/how far into your career you are. In Wales it's not unheard of to start off on £11k as a graduate, in London earning £50k+ in your first year as a graduate is not exactly uncommon. The average graduate salary is £26k if you start at a graduate recruiter - http://education.guardian.co.uk/higher/news/story/0,,1988311,00.html - nationally though I think average pay would be about £30k in London and £25k-ish nationally, though at the peak of your career more like £35k and £30k maybe? As I said the average doesn't include age, and people at peak would obviously be earning more than they did age 22.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    tinkler wrote: »
    Really? You can get a "half decent property" for about £400k. Assume you put 10% deposit down, pay 5.2% interest and have a 30 year term, that's £2.5k a month - affordable on £60-70k which I think you said you were earning?

    Do you have £40k to put down? I certainly don't.

    £400k will buy you something nice in some areas, but not in the areas I want to live.

    Also, there is no way I would want to commit myself to paying out £2500 a month. Sure, it may be 'affordable' in direct relation to my take home pay (approx 55% of it going on last months wage) but who in their right mind commits themself to over half of their wage going on a property? It's not 'affordable' in the real world, I'm afraid.

    Have a look at www.listentotaxman.com for reference on exact figures (I am on a fair bit more than £70k for reference and I still wouldn't commit):

    Wage Summary Yearly Monthly Weekly
    Gross Pay 100% £70,000.00 £5,833.33 £1,346.15
    Tax free Allowances 8% £5,430.00 £452.50 £104.42
    Total taxable 92% £64,570.00 £5,380.83 £1,241.73
    Tax paid 27% £18,628.00 £1,552.33 £358.23
    National Insurance 6% £4,103.40 £341.95 £78.91
    Total Deductions 32% £22,731.40 £1,894.28 £437.14
    Net Wage 68% £47,268.60 £3,939.05 £909.01

    (excuse the formatting - it didn't work properly)

    Going on those pretty accurate figures, I really don't think a bank would be happy about lending on a £2500 a month repayment when the take home is only £3950. That is 65%. You'd be a lunatic to commit yourself to that.

    What happens if the interest rates rocket? You've pretty much butt-fucked yourself. Property prices drop? Fucked. Negative equity city.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel wrote: »
    Do you have £40k to put down? I certainly don't.

    Also, there is no way I would want to commit myself to paying out £2500 a month. Sure, it may be 'affordable' in direct relation to my take home pay (approx 55% of it going on last months wage) but who in their right mind commits themself to over half of their wage going on a property?

    Going on those pretty accurate figures, I really don't think a bank would be happy about lending on a £2500 a month repayment when the take home is only £3950. That is 65%. You'd be a lunatic to commit yourself to that.

    What happens if the interest rates rocket? You've pretty much butt-fucked yourself. Property prices drop? Fucked. Negative equity city.
    As I said in the other thread, yes a deposit takes ages to save up for.

    And lol, when I got my mortgage last summer, the interest alone was 65% of my take-home pay! Did so on the basis that my salary would rise each year. Now look set to pay off the entire mortgage in the next 3 years - but as I said in the other thread I'm putting easily 80%+ of my take-home pay towards the mortgage, have little expenditure on other stuff. If like me you don't spend much money on stuff then it's not that "lunatic" to put 65%+ of your take-home towards your mortgage.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    tinkler wrote: »
    As I said in the other thread, yes a deposit takes ages to save up for.

    And lol, when I got my mortgage last summer, the interest alone was 65% of my take-home pay! Did so on the basis that my salary would rise each year. Now look set to pay off the entire mortgage in the next 3 years - but as I said in the other thread I'm putting easily 80%+ of my take-home pay towards the mortgage, have little expenditure on other stuff. If like me you don't spend much money on stuff then it's not that "lunatic" to put 65%+ of your take-home towards your mortgage.



    Ricardo, my friend. How you doing? (This is not meant sarcastically). :)

    Most people's wages do NOT rise as yours would/did. Remember the whole 'real world' thing. To commit yourself, long term, to those kind of spends on a mortgage would be insanity without mahooosive increases in income. Fine if you're in the finance industry etc, not fine in most others.

    Also - I have some large outgoings for financial 'misjudgements' made in the past. Still paying for those and that takes a chunk of my take home before I can factor in my spends.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel wrote: »
    Ricardo, my friend. How you doing? (This is not meant sarcastically).

    Most people's wages do NOT rise as yours would/did. Remember the whole 'real world' thing. To commit yourself, long term, to those kind of spends on a mortgage would be insanity without mahooosive increases in income. Fine if you're in the finance industry etc, not fine in most others.
    1. Eh?
    2. Wage rise increase is not so relevant - even if my pay remained static, I'd be able to pay off the same mortgage just because my expenditure is so low. Starting off paying 65% interest, 10-15% redemption, rest cost of living, the interest would reduce every month and it'd be possible.
    3. I'm in Technology, not Finance.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel wrote: »
    :lol:

    You must have bought quite a long time ago! ;)

    4 years ago - but was basically a supreme stroke of luck

    but yarr on my meagure wage alone i could only afford a bedsit in thamesmead
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Yea I mean what happens if someone loses their job, that's not the sort of money you can come up with quickly. If you need money for emergencies etc. if you're tied in to a mortgage you may end up having to get credit which is going to take ages to pay off because you're paying so much back to your mortgage too, all of a sudden your outgoings are greater than your income...

    Of course it depends on your career choice but I suspect for someone on the average income it's not prudent to be spending so much on a mortgage, and in many cases simply not affordable (families end up with big bills, birthday parties etc.)
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    tinkler wrote: »
    1. Eh?
    2. Wage rise increase is not so relevant - even if my pay remained static, I'd be able to pay off the same mortgage just because my expenditure is so low. Starting off paying 65% interest, 10-15% redemption, rest cost of living, the interest would reduce every month and it'd be possible.
    3. I'm in Technology, not Finance.

    Ok, my bad. Your figures read very similarly to an old poster on here ;)

    See my other post. I have a lot of out goings, unfortunately! Also, I do like to live the 'high life', so like to enjoy my remaining money.

    It's ok though - I already own a stunning property which is paying for itself.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Wyetry wrote: »
    4 years ago - but was basically a supreme stroke of luck

    but yarr on my meagure wage alone i could only afford a bedsit in thamesmead

    You lucky beggar! Bought at the right time, it seems ;)

    I should have, but was busy pissing my money down the drain, partying. Partied that hard I caused permanent damage! Oops. Great times though (what I remember) :D
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    ShyBoy wrote: »
    Yea I mean what happens if someone loses their job, that's not the sort of money you can come up with quickly. If you need money for emergencies etc. if you're tied in to a mortgage you may end up having to get credit which is going to take ages to pay off because you're paying so much back to your mortgage too, all of a sudden your outgoings are greater than your income...

    Of course it depends on your career choice but I suspect for someone on the average income it's not prudent to be spending so much on a mortgage, and in many cases simply not affordable (families end up with big bills, birthday parties etc.)
    I was reading last week that in my sector, it takes someone an average of 49 days to get a new job once being made redundant. That's why with all these people in London being fired right now you're not seeing their homes instantly repossessed, many get other jobs soo enough.

    Also, my bank allows "mortgage holidays". So say if I were to get fired, and wasn't able to get another job, I'm able to use the money I've already paid as redemptions towards the interest. eg if I've so far put £20k towards paying off the mortgage, and my monthly interest is £2k, I won't have to pay them anything for a whole 10 months.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    tinkler wrote: »
    I was reading last week that in my sector, it takes someone an average of 49 days to get a new job once being made redundant. That's why with all these people in London being fired right now you're not seeing their homes instantly repossessed, many get other jobs soo enough.

    Also, my bank allows "mortgage holidays". So say if I were to get fired, and wasn't able to get another job, I'm able to use the money I've already paid as redemptions towards the interest. eg if I've so far put £20k towards paying off the mortgage, and my monthly interest is £2k, I won't have to pay them anything for a whole 10 months.

    Yea I was referring to those on the average UK income :), what I meant with my second paragraph qualification kinda thing
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    tinkler wrote: »
    I was reading last week that in my sector, it takes someone an average of 49 days to get a new job once being made redundant. That's why with all these people in London being fired right now you're not seeing their homes instantly repossessed, many get other jobs soo enough.

    Also, my bank allows "mortgage holidays". So say if I were to get fired, and wasn't able to get another job, I'm able to use the money I've already paid as redemptions towards the interest. eg if I've so far put £20k towards paying off the mortgage, and my monthly interest is £2k, I won't have to pay them anything for a whole 10 months.

    Ah - this is the painful point. Last year I had 6.5 months off work. I was *looking*, but it was a while before I was able to land anything (I'm a contractor). 6.5 months is a lot to absorb, living costs-wise, no matter how much money you earn (withn reason, or course!).

    If you have a lot of excess £££ and the situation is like yours, then things are fine. In general, this is sooooooooo far from the case! ;)
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel wrote: »
    If you have a lot of excess £££ and the situation is like yours, then things are fine. In general, this is sooooooooo far from the case! ;)
    I earn abt £30k, which is fairly normal for London... if you go for an interest-only mortgage, and pay any surplus cash after expenses to the mortgage each month, you'll be in a situation where if you're out of work you won't have to pay them a penny until redemption/monthly interest payment catches up. Obviously it depends on your circumstances if you're going to have much excess cash (net income minus mortgage interest minus other expenses) but I can imagine for most single / couples without kids it'll be possible.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Why would anyone with half a brain go for an interest-only mortgage?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Kermit wrote: »
    Why would anyone with half a brain go for an interest-only mortgage?
    Because interest-only mortgages are fully flexible as to when you can pay mortgage redemptions. At the end of every month, I put every penny of 'excess' cash towards paying back the mortgage. And should anything ever go wrong ie I get fired, I can use what I've redeemed to pay future monthly interest payments, ie not have to pay anything for 2yrs or whatever. I love being able to put away whatever surplus which changes monthly rather than a fixed amount, and should I want to go on holiday or whatever not have to worry my mortgage that month may be too expensive etc.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    That logic kinda proves what I mean about your worrying lack of financial acumen that I mentioned in the last thread you posted in.

    Interest-only mortgages are very financially dangerous products to have, given that you are not repaying any capital as part of your payments. You hope that property prices remain constant long enough to repay your loan.

    By repaying extra each month you're not saving for a rainy day at all. You're simply repaying the money that you owe. Hardly something to shout about as a great financial tactic.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Gosh...all this talk of money.

    Makes me wish I was 8 again!
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Kermit wrote: »
    That logic kinda proves what I mean about your worrying lack of financial acumen that I mentioned in the last thread you posted in.

    Interest-only mortgages are very financially dangerous products to have, given that you are not repaying any capital as part of your payments. You hope that property prices remain constant long enough to repay your loan.

    By repaying extra each month you're not saving for a rainy day at all. You're simply repaying the money that you owe. Hardly something to shout about as a great financial tactic.
    Errm, what? In a country where you said yourself the average person is £10k in debt, people frequently spend more than they earn (often on needless stuff like plasma tellys and excessive alcohol), I am one of the most financially sensible and prudent people around, hence being able to put away 80%+ of my monthly income towards the mortgage, which I should be paying off in under 10 years (as opposed to 25 it takes most people). Being able to afford to mortgage a property in London age 21 was no mean feat, so not sure I'm so deserved of a "worrying lack of financial acumen" !!

    It's irrelevant saying that interest-only mortgages are dangerous because I'm not repaying capital, when I say that I repay that capital every single month in a separate paycheque. Just rather paying a fixed amount each month, I can put away exactly the right amount depending on current circumstances - ie a huge amount if I'm not up to much, little if I'm about to go on holiday.

    No, I'm not saving for a "rainy day", but why should I? I try and always keep around £2,000 in my current account, I have very very good job security with what I do, as does my girlfriend (teacher) who effectively pays me rent.

    Just because the people you deal with at work are utter idiots, spending more than they earn and then crying that they've (deservedly) spiralled into 5-figure debt, doesn't mean you should be patronising about the "lack of financial acumen" of someone who spends about £50/week on food and bills (for me and my partner), prudently avoiding needless spending!
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    Way to completely miss the point.

    For most people that level of expenditure simply isn't sustainable. Lecturing about "idiots" doesn't change anything.

    And I say that as someone who regularly overpays on my mortgage, puts a lot of money away into savings (I'm saving for an LPC to raise my wage) and is financially secure enough to be able to stooze on my credit card.

    ETA: Who were you before? I haven't been a debt advisor for quite some time now and I don't think I've said what I do for a living for a while now (it isn't debt advice).
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    if you can only afford an IO mortage then you should be renting full stop.

    the mean average wage in london is £36k from what i remember, don't quote me on that. i remember when i was on £13k a few years ago that sounded like a lot but it still doesn't go as far as you'd think in london.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    tinkler wrote: »
    I earn abt £30k, which is fairly normal for London... if you go for an interest-only mortgage, and pay any surplus cash after expenses to the mortgage each month, you'll be in a situation where if you're out of work you won't have to pay them a penny until redemption/monthly interest payment catches up. Obviously it depends on your circumstances if you're going to have much excess cash (net income minus mortgage interest minus other expenses) but I can imagine for most single / couples without kids it'll be possible.

    If you don't mind me asking... Where/what did you buy in London on a £30k salary?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel wrote: »
    If you don't mind me asking... Where/what did you buy in London on a £30k salary?

    An OK £275k studio flat. Joint mortgage - me on £29.5k, the missus on £25.7k as a teacher, £30k deposit (took 2.5yrs for us to save up) and standard 4.5x leverage. Northern Rock (!) offered me up to 5.2x, taking into account that I'm prudent not a spendthrift.
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    tinkler wrote: »
    An OK £275k studio flat. Joint mortgage - me on £29.5k, the missus on £25.7k as a teacher, £30k deposit (took 2.5yrs for us to save up) and standard 4.5x leverage. Northern Rock (!) offered me up to 5.2x, taking into account that I'm prudent not a spendthrift.

    Quick one on something you posted a short while ago:
    as does my girlfriend (teacher) who effectively pays me rent.

    Eh? Is her name on the mortgage?
  • Former MemberFormer Member Posts: 1,876,323 The Mix Honorary Guru
    g_angel wrote: »
    Quick one on something you posted a short while ago:

    Eh? Is her name on the mortgage?
    Yes, the mortgage is officially a joint one in both our names, but all the mortgage interest and redemptions go to the bank from my account, whilst she pays me a lump sum each month which contributes to that and other costs, so I'm not technically right to say "rent". We should just get a joint account, keep a £2k float and have the rest going to paying off the mortgage.
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