‘We’re rich but we don’t feel like it’

Families earning six-figures tell Isolde Walters of their struggle to make ends meet as bills rise

Asix-figure salary once meant financial freedom and a desirable lifestyle. But even being on such a high salary, in the top 5pc of earners, does not stop many families from living month-to-month, unable to save or even feel comfortable.

Last month Jeremy Hunt, the Chancellor, suggested that an annual income of £100,000 “doesn’t go as far as you think”. When one person’s salary crosses that key threshold, you fall into a tax trap. This particularly affects families: eligibility for the 30 hours of free childcare scheme is removed and access to £2,000 a year of taxfree childcare is denied. On top of this, the personal allowance begins to taper away.

Telegraph Money spoke to four people in households pulling in more than £100,000 to understand why they no longer feel wealthy. They told us how crippling mortgages and rents, unprecedented taxation, sky-high house prices, substantial childcare costs, soaring utilities and food inflation had left them cutting back on holidays, meals out and luxuries, leaving them feeling not only not rich but, in some cases, like they are only just getting by.

To get a job that pays six figures in Britain, you need to be in the South East. People with my job title in Newcastle are paid two thirds what I get. But it’s a deal with the devil, as London living costs will be so high that you won’t feel the extra money.

We live in an ex-council flat in a nice location. The houses on our street are £1.5m to £2m and our flat was £390,000. For us to move into a better home so we can have a larger family, I need to save large amounts. I am self-made so I don’t have family money behind me. I am stacking away £1,500 a month which obviously affects our lifestyle.

We have the same holidays we had £50,000 ago. We might go on holiday once a year, to somewhere like Portugal. We might do a tasting menu in central London once every three months.

We didn’t have a wedding. We just got married and had coffee afterwards. We looked at the value of a wedding compared to the cost and it was unjustifiable with a baby on the way.

We remortgaged our home last year and the payments have gone up by £ 500 a month. The food bill has gone up, the utility bills have gone up by huge amounts. About £3,500 out of my £5,000-a-month salary is going on the mortgage and bills. These increased costs are eroding the money we can save. In turn, that makes our desired second child less realistic.

My wife is a senior civil servant but her monthly take-home pay is a few hundred pounds after childcare is paid for, which means all of the saving for the future, the food, and the monthly bills, comes out of my salary. It gets harder for us to progress because the more I earn, the less my salary increases because of tax.

We just had our child and I’m very aware that anything I earn over £100,000 means our childcare allowance will be withdrawn. Most of my bonus would disappear because of this, but I’m still taxed on the extra £20,000 of my bonus – so that bonus just cost me £10,000, plus whatever we have lost in childcare support.

For my friends and I who are earning between £100,000 and £150,000, the sense of progression is gone. Tons of babies have been put off or cancelled. I have friends who are freezing their eggs because they can afford the monthly costs of frozen eggs more easily than they can afford a baby. Friends who are earning six figures, and don’t have generational wealth, are doing stuff you would never expect someone on six figures to be doing. For example, I know married couples earning over £100,000 who are living with flatmates.

My industry has had three waves of layoffs and it is not finished. I don’t feel rich.

After tax, Daniel brings in £4,100 a month. After paying our mortgage and bills, we are on the line. We’re not living month-to-month or day-to-day, we’re living hour-to-hour.

Our mortgage is £2,200 a month. Daniel

‘I don’t know how we would have survived without the food banks. They just filled up my car. I sat there sobbing’

also has to pay child maintenance support of £1,200 a month to his ex-wife. Our gas and electricity bill is £400. The price of petrol is wild and is about £150 a month for both of us. I have a nanny on a Tuesday for £10 an hour – which is cheaper than the local nursery – but that still leaves me in the red because I don’t get paid enough to cover childcare. The water has gone up to £200 a month and our council tax has risen too.

Daniel does bar work on the side and we live off of the cash- in-hand that brings in. He worked at a function where a friend of his boss recognised him. He later got called in to his boss’s office and had to admit he was struggling. The boss said: “You get paid £100,000 a year, how are you struggling?”

We don’t go out, there are no luxuries, no holidays. The bills and the mortgage are paid and then there’s nothing. I can’t remember the last time we went on holiday, out for dinner or just had a drink in the pub. I’d like not to have holes in my knickers.

We have had to use food banks. The first time was in March 2022, when I was pregnant, and the midwife suggested it. At the time, Daniel had to pay £2,000 a month in child maintenance payments and I was paying off a loan that I had to take out when my business collapsed during Covid. Daniel’s salary had shrunk because it was commission-based and no one was buying anything and his basic salary was only about £40,000. I don’t know how we would have survived without the food banks. It was a humbling experience. I hate the stigma around using food banks. I went to one and the media was there and I couldn’t go in. So I went to another one and they just filled up my car. I sat there sobbing. They sorted us out with a month-and-ahalf ’s worth of groceries. It was amazing.

We’ve got a Ukrainian refugee lodger. It helps our lodger and the £ 500-amonth thank-you payment really helps us. But I don’t want a stranger living in my house for the rest of my life.

We don’t qualify for child benefit, which is obscene, because we need it. Our friends who live in a council house near us go on three holidays a year and have a new car.

I had far more money as a single mother. I used to have my nails done, my hair done, regular waxes. That’s not even on my radar any more. My last haircut I won as a prize in a raffle. I was so happy. I know those are all things that you don’t need. What I need is to put food on my children’s table.