
Minimum salary required in London: £500k? - edward
http://firevlondon.com/2015/05/30/minimum-salary-required-in-london-500k/
======
jacalata
Tldr: no, but if we redefine "live in London" as "live in Zone 1, take family
of four skiing in France four times a year, send kids to private school from
age 3, always eat at Michelin starred restaurants, own multiples of everything
Apple ever releases, any other stupid consumerism you can think of" then yes.

~~~
makeitsuckless
Spending quality time with family doing outdoors activities, ensuring good and
safe care and education for your children, eating quality food at fine
restaurant, buying quality electronics, etcetera are actually the complete
opposite of "stupid consumerism".

Sounds like an excellent way to spend your money if you have it.

~~~
yetanotheracc
Why was this comment downvoted? Genuinely curious.

Is merely entertaining a notion of living above £50k subsistence unacceptable
in this community?

~~~
kraftman
Because you don't need to spend that much to do any of those things. It would
be an interesting article if it actually addressed the minimum income needed
to achieve that lifestyle.

------
boothead
I just about to buy a house outside of London. I'm also about to send my 2
kids to private school as all the decent local state schools are full with
waiting lists (thankfully a lot cheaper than the figures mentioned here). I
had a look at one of the options for commuting into London. This is the
quickest option from where I am (via HS1). I'm already up to the following
monthly expenses:

Mortgage: £3200

School Fees: £1375

Travel: £450 (next cheapest is £300)

Insurance: ~£300 (Critical Illness, Life insurance)

Bills: £1500 (guestimate)

These are a mix of expenses I'll have to pay personally, and some that I can
pay as business expenses.

So I'm up to £7k monthly outgoings already, without even trying. In reality
I'll need to add another £3k ish for loan repayments and other bits. As a
contractor I'm able to be quite tax efficient, but as a single salary earner,
[http://www.thesalarycalculator.co.uk/salary.php](http://www.thesalarycalculator.co.uk/salary.php)
tells me I'd need to be earning > £200k to cover this.

I could economize. I could get a cheaper car for example and I could have
bought a cheaper house - the one I'm buying certainly isn't a palace though.

But, yeah - London is expensive!

~~~
cheradenine01
Really? A mortgage repayment £3200 implies a mortgage amount of £800,000.

Most people I know don't have houses costing that much, even in London.

~~~
dijit
for a family home near London? I could see it coming close to that.

------
richmarr
The degree of entitlement evidenced by this article is seriously distasteful.

If private school from age 3 is part of a "minimum" lifestyle, exactly how
does the author describe the lifestyle of all the kids who go to state
schools?

Zone 1 indeed.

~~~
prawn
The author is describing their friends, not themselves. It doesn't sound
entitled to me to describe what they're witnessing and wonder about the
figures. The discrepancy comes from that being described as a "minimum" (and
thus linkbait headline) when really it should be qualified at all levels as
minimum for that lifestyle.

~~~
richmarr
Sure, you can minimise the relevance of the "discrepancy" and claim that the
author isn't entitled, but the entire enterprise of this article is based on
the premise of discovering whether these really are the "minimum" living
costs. Is it a "discrepancy" or is it the way the author sees the world?

The end of the article even asks: "Frugalists: With such a cost structure,
where would you start saving first?"

Not "lower earners", but "frugalists". That's people who earn £500k but don't
necessarily want to spend it all. The author isn't even addressing the paupers
who only earn £250k, or the near-beggars who only earn £100k.

~~~
prawn
From memory, "minimum" was the term used by his friends. It's more about them
than the way the "author sees the world".

I think you're reading too much into someone's exploration of a particular
situation. It remains an opportunity for you or anyone else to run through the
expenditure of any of those other pricepoints you mentioned. Though obviously
they are unlikely to reach HN because they're not quite as exciting or
outrageous.

~~~
richmarr

       I think you're reading too much...
    

The author has thought about, analysed, and written an essay on this subject,
using the word "minimum" regularly (including in the title) and not once gave
a single nod to anyone earning less than £500k/year... then going on to
address people that wanted to consider spending less as "frugalists".

Maybe you're right, maybe I'm just primed to think the author entitled because
they self-identify as a "High net worth personal finance blogger".

------
cmdkeen
The article is also making an assumption that people on £500k a year are using
the NHS. Unless you're Mrs Miliband private health insurance is almost
certainly going to be part of your employment package, because if you're
earning that much then the productivity hit of waiting for NHS treatment is
likely to be more than the cost of private health coverage.

This is another reason why I love living in Edinburgh, the salary difference
is far smaller than the "nice life" cost of living difference.

~~~
pjc50
Upvoted for Edinburgh. It's lovely here, affordable by comparison with the
south-east, and has a reasonable tech centre. Still trying to find the startup
clique, though; is there an "HN Edinburgh"?

~~~
majc2
Checkout techmeetup.co.uk

------
kspaans
I would asssume that the £30k without paying income tax

    
    
      Very comfortable life: £30k per year.  Which still corresponds to £40k gross salary (roughly 1.5x statistical median wage), but with tax-efficient asset allocation you can relatively easily achieve £30k per year without paying any income taxes
    

comes from drawing down savings rather than earning income? At £40k annual
income, your effective tax rate is 14.7%[0], so without complicated self-
employed tax reporting (deducting most of your expenses), I don't see how you
can reduce taxes on earned income. Sure, the ISAs (read: tax-free savings
accounts) give you tax-free earnings, but they haven't been around long enough
for you to make all of your income from them[1].

0 - [https://www.gov.uk/income-tax-rates/current-rates-and-
allowa...](https://www.gov.uk/income-tax-rates/current-rates-and-allowances)

1 -
[https://en.wikipedia.org/wiki/Individual_Savings_Account#Ori...](https://en.wikipedia.org/wiki/Individual_Savings_Account#Origins)

~~~
eroded
£40,000 of salaried income is currently £30,287 net, after £5,880 income tax
and £3,832 national insurance.

~~~
kspaans
Ahh yes, I keep forgetting about national insurance, the _other_ income tax!
;^)

------
dijit
Crap man, and when I was earning a modest (by comparison) 45k I thought I was
decently well off.

there is something to be said for the house prices though, I would never go
back on anything less than 80K.. I don't mean that in a snobby way- I simply
mean my standard of living outside of london would equate to 80K of salary
-inside- london. I don't expect people to pay it.

it's scary the beast that london is.

------
lmm
For any given number I'm sure you can come up with a lifestyle that costs that
much. Costs expand to consume the money available. So I don't think anyone
will ever reach financial independence "without changing your lifestyle."

There are always things you would have spent the money on. The trick is
deciding which you care about, and whether you value them more than
independence.

------
JohnyLy
I would say 50K is required to live well in London and 20K as a minimum
salary. 500K as a minimum is ridiculous.

~~~
irremediable
£20k is a much better estimate. A twentysomething without children can live
comfortably on that -- with plenty of money for drinks, gadgets and eating
out.

~~~
pjc50
How much is that person spending on rent in London?

~~~
alextgordon
Between £1k and £2k. You'll be a frequent customer of Wonga.

 _Edit_

Proletariat: [http://www.rightmove.co.uk/property-to-
rent/property-5304414...](http://www.rightmove.co.uk/property-to-
rent/property-53044145.html)

Bourgeois: [http://www.rightmove.co.uk/property-to-
rent/property-5061904...](http://www.rightmove.co.uk/property-to-
rent/property-50619043.html)

~~~
p0la
your Bourgeois link is not even in London....

For a family with Kid, youar completely missing it: Preletariat 4k :
[http://www.zoopla.co.uk/to-
rent/details/37300477?search_iden...](http://www.zoopla.co.uk/to-
rent/details/37300477?search_identifier=439f401c0e0c565bc9711bc6360f544d#2zFbk8IFQqY8wtuM.97)
Bourgois: 6.5k: [http://www.zoopla.co.uk/to-
rent/details/37341550?search_iden...](http://www.zoopla.co.uk/to-
rent/details/37341550?search_identifier=4946f34f8587e288f2fe5d0c604c61d3#FoczMTLlb473A0GK.97)

~~~
alextgordon
It definitely is. If you can vote for the Mayor of London, then you live in
London.

------
hugofirth
I should also chime in and say that even for people living in London and
sending their children to private schools these estimates are very high. I was
luck enough to go to Eton and honestly, for most parents it was a question of
affording the fees by: a) _not_ spending that kind of money on other
activities; b) lifelong saving; c) selling substantial assets (like second
houses etc...); and d) inherited wealth and/or generous grandparents.

It was fairly uncommon for student's fees to be paid out of parents' salaries.
I would _guess_ (very anecdotal!) that £500k is well above the median annual
salary for those parents.

Also - apparently this person hires babysitters for >350 nights a year ....
o.0

~~~
pjc50
Is that double-counting babysitting and sending the kids to boarding school?
It's certainly a tradition of the English aristocracy to spend as little time
with your children as possible.

~~~
hugofirth
Haha - I hadn't even considered this. So yeah - the cost of childcare is
largely not going to overlap with the cost of private education (where that
private education includes accomodation of course).

------
bechampion
god...you know how hard is to make 250k in London?? this article is stupid. to
give you an idea a well paid devops job that woudl pay about 130 in the US ,
pays about 80K GBP here in the UK. 250K is for bankers or something man this
article is bollooooooox

~~~
boothead
Devops contract rate seems to be around £450/day (at the low end). Assuming 21
days per month and 2 months off per year, you'd be looking at £94500 revenue.
As a contractor you could expect to pay as little as 25% total tax, but if we
assume 30% you're looking at taking home £5.5k per month. Which is a grand
more than an £80k salary (with an extra month off).

If you're married and have your SO as a shareholder, thus splitting the tax
load you can almost match a £200k salary on a day rate of ~£700 (I have seen a
few devops type roles getting up towards that figure).

So, I agree that £250k salary is very top end, but there are certainly
contracts in the finance industry that pay enough to get you close if you
change the way you're paid.

~~~
bechampion
i think the article said that you need 500K a a year. So you have to marry a
devops person too, on a contract. the odds shrink a lot the couple isn't a
homosexual. Where you need to find a devops woman that makes 500GBP an
hour....

------
collyw
That is nowhere near a minimum salary required. Private schools and £300 a
week on groceries, and 20K a year on holidays!??!

~~~
prawn
Minimum salary to live that particular lifestyle.

20k/year on holidays might be realistic for a family of 4-5 depending on where
they went. If they're teenage children, you're getting family suites or two
hotel rooms and could easily pay $400+/night.

3-4 trips totalling say 25 days. Airfares add up for 4-5 people. $3k+ on
airfares, $10k+ on accommodation. Four people eating out 1-2 times/day. Car
hire (SUV rather than a hatchback to fit all luggage), entertainment, etc.

I earn peanuts compared to those examples but just had a trip to the States
with wife, toddler and infant. Probably cost $20-30k in one 8 week trip and
that was without the fourth airfare and generally cramming four of us into
budget hotels where possible.

------
n9com
Title should be 'Minimum salary required in London to live a life of luxury:
£500k'

------
rozza
Amazing, really tells more about keeping up with the Joneses and the societal
pressure to conform to their expectations.

As you earn more money, your social circles change and there is a cost to
moving into that circle. You have to live in the right area, dress in the
right clothes and drive the right car. So the costs increase to levels that
seem exorbitant to people on "average" salaries but really they are just as
much slaves to the system as anyone else.

The trick is to earn good money and not spend it on frivolities, but
marketeers and advertisers work hard to get people to spend their hard earned
cash to great effect.

------
SeanDav
For comparison purposes, if one wants a benchmark for a top notch salary, then
it is common practice to use the salary of the Prime Minister, who earns
£142k.

~~~
pjc50
Weirdly, that's not even the highest salary in the public sector. And you
occasionally get MPs complaining that it's "not enough to live on" (which in
comparison to the £500k couples it isn't). Malcolm Rifkind got himself in the
news lately for hiring himself out and saying "I'm not paid a salary", while
earning £67k for being an MP and ~£110k for being a nonexecutive director of
Unilever a few days a week.

At least the job of PM comes with the use of two houses and a car.

------
garagemc2
Note it is £500k which is more than $750,000.

------
lucasnemeth
wtf. They're not entitled to keep this stupid and absurd way of living, they
don't NEED 500K. I don't care if "their friends" live like that and it's
normal between them!! The world is fucked up. this depressed me.

------
jdimov9
So, everyone here is bothered that people like to eat well and take family
vacations (is this really your definition of "luxury" lifestyle? You guys
sound like coal mine workers.)

But you're all perfectly fine with the government taking close to half of that
income in taxes.

Were you all raised in a communist regime?

~~~
pjc50
Like it or not, it's a lifestyle that only about 10% of the UK can afford.
£20k is the holiday budget for a whole decade for most people. And that tax
number includes healthcare and pension.

~~~
jdimov9
Oh, I fully agree with that - in fact, in certain other European countries it
is more like 0.10%, but that's not the point.

The point is - I don't understand all the whining going on here.

If I make £500K a year, and I gave it up for £20K a year, would that really
make any of you better off? REALLY?

~~~
lmm
Given that London house prices are a function of supply and demand, if
everyone on £500k did that then I personally would be a lot better off.

~~~
keithpeter
Alas, I suspect supply will be _very_ carefully managed to ensure that voters
in the UK do not have their main asset devalued over the next 10 to 15 years
or so.

After that, enough younger people will be renting for the balance to flip and
the price correction to occur.

~~~
cheradenine01
Whilst population continues to rise, you'll be waiting a long time for your
"correction".

~~~
keithpeter
What % of average wage do you think people will want to pay for housing? What
is the limit? There has to be one.

~~~
lmm
Average wage has very little to do with it, at least when it comes to London.
People there pay a lot more than the rest of the country, but they're earning
a lot more too. And even within London the same kind of logic applies.

~~~
keithpeter
So what happens when you have no teachers, no retail staff, no police, no
ambulance and no refuse collectors?

Really: there has to be a limit.

~~~
lmm
Partly those people's wages rise. But more commonly they live elsewhere. Those
people's wages have no connection to the house prices in zone 1, because those
people live further out and commute.

