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The two earner family each on 49k vs a single earner on 100k and child benefit.
But think of what that single earner on £100k saved on childcare costs. Mitigates it a bit.
Why do you think it’s non contributory?
thegeneralist
Full Member
The two earner family each on 49k vs a single earner on 100k and child benefit.But think of what that single earner on £100k saved on childcare costs. Mitigates it a bit.
Well yes if they are alive and or present. But that’s not checked in the tax law is it…
Why do you think it’s non contributory?
Ignorance. Put me right...
If so, it feels pretty much in line with what nonDocs on similar salaries would be paying. Clearly the devil is in the detail.
The specific challenge here is the value of the DB pension scheme. That’s what’s causing the issue.
I think the essence is you are in the weird 60% tax area. Then the extra tax due on the wooden dollars pension contributions hits you hard.
But think of what that single earner on £100k saved on childcare costs. Mitigates it a bit.
Sure. £60k and £40k vs. 2x£50k, then.
@thegeneralist There’s a chart of the contributions here. Employers pay 14.38% on top (I don’t know what’s normal in the private sector but there’s no mechanism for getting these if you come out of the scheme, the employer just keeps them) and if you’re a GP partner and so effectively self employed you’re paying those yourself, as well as the employee contribs.
@lesgrandepotato I think the thing that gets people is the litany of anecdote of people who’ve done extra work who then get hit with a tax bill that exceeds the pay they earned doing the extra work (which usually means doing extra shifts for their employer, which aren’t in themselves pensionable as nothing above 40h/wk is pensionable)
Employers pay 14.38% on top (I don’t know what’s normal in the private sector but there’s no mechanism for getting these if you come out of the scheme, the employer just keeps them)
Significantly less. And it works the same, if you opt out, your employer doesn't give you the extra.
Sorry - which bit is less? What we pay, what NHSE pays, or what private sector employers pay?
"Employers pay 14.38% on top"
3% is normal in the private sector.
Oh, I see - your sentence was ambiguous. I read it as you weren't sure what the normal level of employer contributions were, rather than you weren't sure if in the private sector they were paid to you if you opted out of a pension.
Thanks - I was talking about opt-out, but TBF I didn’t know how much employer contribs were either.
£7k additional tax on a £120k salary doesn’t seem in the realms of working being a net loss.
It’s not £7k on £120k .
PAYE has already been paid on the £120k at 40%. The £7k bill is purely tax on the extra additional earnings over £120k which is subject to 45% tax PAYE, then at the end of the financial year you then receive this extra tax bill. So yes it is a net loss
Sounds like Mrs FunkyDunc had the wrong tax code and moved to 45% tax rate and either underpaid tax and/or hit the pension relief taper, hence had to pay more tax.
So if I earn £121k, I pay £7k more in tax than if I had earned £120k?
As a non doc on a not-too-dissimilar scheme, the devil is indeed in the detail and entirely dependent on what formula the pension provider uses to calculate the expected annual allowance overpayments-the current interest rates used in the calculation being the cause of all the fuss. It’s combined with consecutive years of being in excess of the 40k mark hence having no previous (backdated 3 years) allowance to negate any surplus. This year the formula has me exceeding my allowance by £30k (£70k in total) despite me not actually doing so. So I’m expecting a tax bill equal to that amount. The PP has me forecast exceeding the £40k mark for 3 of the next 4 years. As I don’t have that kind of cash my only option is to let the PP ‘loan’ me the money-but that is deducted from my lump sum on retirement. The loan is 4-5%. By 2035 (NRD) my tax bill loan will be twice as much as my forecast lump sum.
Absolutely correct. I could have my pot reduced to pay the tax liability. Except in the public sector Ponzi there is no pot to reduce. Hence the annual tax bills.
I solved my problem with a very painful cheque. Now they’ve closed the DB scheme but I am able to retire.
It’s the annual allowance and taper that has been hitting work. Lifetime allowance much less so, sure you can pay tax when you take your pension. But the annual allowance hits the buffers at about 120k without taper. And the tapers started as lot lower a few years ago. That’s also at the personal allowance taper. So the cost to work can be negative
So if I earn £121k, I pay £7k more in tax than if I had earned £120k?
No - let’s say the overtime totalled £15k was taxed at source PAYE at 40%/45%. Fine can cope with that/expect that. It leaves about £6,700 in net pay.
At the end of the year the tax man then says no we want even more tax off you as you have gone over your annual allowance another £7k please, hence all that extra work was done at a loss.
As has been stated in this thread there is a grey area roughly in the £120k to £160k pay bracket where this happens. A lot of private sector companies ensure they pay above or below this bracket to avoid this situation. Even NHS senior managers/directors are either above it or below it to avoid. The way NHS consultant pay has been controlled over the years means they fall slap bang in the middle of it now.
Financial advisors have told Mrs FD to either do no extra work or do enough work that she gets over £160k. we hardly see Mrs FD on £120k (prob 60-70hrs a week) and she comes home broken after doing additional hours that cost us money so there is no way she could do enough hours to get over that £160k
I don't understand any of this shit
I think the problem is that no-one understands it (including accountants), what should be a relatively straightforward and predictable calculation isn’t (because there are three different schemes, many people have some money in two or more and they can all grow by different amounts even if you’re not paying in), and NHSPA can’t get pension statements out in anything resembling a timely manner.
Well, whilst this whole thread is laudible and informative it is essentially plebs fighting over entirely reasonable £1m pension pots - which are firmly middle class (not rich by any stretch).
But it does keep us fighting amongst ourselves rather than going after ultra high net worth individuals and the systems that enable it.
How about a lifetime total wealth ceiling of £50m eh? Now THAT'd be transformative.
The fact is that £1m is no longer a shitload of money. It's an awful lot to many, but you ain't rich on £1m. It's just indicative of how very poor most people are.
As a quick recap, the average pension pot at:
Age 40 is £30,000
Age 45 is £75,500
Age 50 is £75,500
Age 55 is £107,300
Age 60 is £107,300
Age 65 is £107,300
https://www.nutsaboutmoney.com/pensions/average-pension-pot-uk
Is there a source somewhere showing how having a pension pot 10x the average keeps you middle-class?
I think we have varying definitions of what it means to be rich.
Not having to work, with a mortgage paid off (I know it's not been discussed much, but in 99% of cases it's obviously going to be the case) and an income of around 40k pre-tax with no dependents and nothing to spend it on but some minor domestic bills and leisure activities puts you in a pretty privileged position. Compare to say a hospital consultant with a much higher salary *but* also a big tax bill, mortgage, dependents, and working long long hours to achieve it.
What are you actually going to spend 40k on each year? It's a huge amount of money to get dropped into your bank account year after year. How many new cars and long holidays do you really need?
Average net worth of a UK adult is £172k.
Claiming that having a single source of wealth, a pension pot, of nearly 6x that doesn't make you rich demonstrates a distinct detachment from the reality of the vast majority of people.
It might not be private jet money, but you're still in an exceptionally privileged position.
At the end of the year the tax man then says no we want even more tax off you as you have gone over your annual allowance another £7k please, hence all that extra work was done at a loss
Thats happened though because your pension pot has risen by the equivalent £54k or so, or 14k more than it would otherwise have. How does 14k of overtime result in a pension pot rising by the equivalent of 14k? That doesn't sound right. If you're on 120k already and that's using up 40k equivilent allowance, an extra 14k should give you approx an extra 4.5k of pension equivilent or approx 2.2k tax bill.
It might be that your 7k bill is made up of 4k that you'd have paid anyway, and 3k cos she did overtime?
Top 1% of UK households have median pension wealth of 2 million. NB that's household not individual.
So yeah 1 million in your pension pot is pretty much up there, even if you aren't Musk or Bezos.
Having a *household* pension pot of £1m puts you in the top 10%.
For those the lifetime allowance direct benefit pension calculation affects, I learnt something very useful from our financial advisor the other day - you may already know this but I didn't:
The 20x + lump sum depends entirely on how you are going to take the pension, ie, taking the maximum lump sum in exchange for a reduced pension changes the calculation result - I had assumed the calculation was done on the 'standard' pension however you chose to actually take it.
Also, taking the 2015 pension (NHS pension) early at 60 (so the same as the 1995 pension) not only changes the LA calculation, but also may actually give you more money overall despite the reduced payout, as you get that pension for 7 years longer.
Average net worth of a UK adult is £172k.
Claiming that having a single source of wealth, a pension pot, of nearly 6x that doesn’t make you rich demonstrates a distinct detachment from the reality of the vast majority of people.
It might not be private jet money, but you’re still in an exceptionally privileged position.
I don’t think any here in that position doubts that. However, you live in the world that you inhabit.
Top 1% it’s a nice place to be, but it’s not just a gravy train. In my old role I produced work for about 125 people. Keeping them gainfully employed, and productive and therefore essentially making sure their jobs exist is not just a cake walk.
People in that top 1% contribute a lot compared to the true HNW so cut us a break now and an again. Yes it’s 1-100 people but that’s still quite a few in a country of sixty odd million.
TLR, I assume you mean, you have choices on lump sum Vs regular payments. Yes you can probably make some choices and reduce the bill a little. For example you can trade regular payment for lump sum at say £1/£16. And since the allowance is 20* plus actual lump sum a higher lump sum and lower income reduces the pension pot in terms of 'allowance'. That's badly explained and only those that already know it will follow me, sorry!
Top 1% it’s a nice place to be, but it’s not just a gravy train. In my old role I produced work for about 125 people. Keeping them gainfully employed, and productive and therefore essentially making sure their jobs exist is not just a cake walk.
People in that top 1% contribute a lot compared to the true HNW so cut us a break now and an again. Yes it’s 1-100 people but that’s still quite a few in a country of sixty odd million.
Noone is saying that you don't work for it, or that you don't deserve it. All I'm saying is that to claim that having £1m in a pension pot is perfectly ordinary and does not count as "rich" is completely detached from reality.
Something needs to be done soon. I’m now getting 20-30k annual pension bills in the NHS. Options are to pay the bills, go part time to avoid them or sail off into the sunset and enjoy a CPI pension rise every year rather than an annual below inflation paycut. 10% of our specialities Consultant posts now vacant and thousands on the waiting list. I‘m literally irreplaceable at the moment (our last 4 early retirement posts are unfilled) but am being incentivised to retire or go part time. Madness.
The 20x + lump sum depends entirely on how you are going to take the pension, ie, taking the maximum lump sum in exchange for a reduced pension changes the calculation result – I had assumed the calculation was done on the ‘standard’ pension however you chose to actually take it.
so does deciding to take a stepped pension or not
This is now the situation I’m finding myself in. I’ve been made redundant, official last day is Friday, but due to my shifts it’s actually today. I applied for my state pension last month, and received details a couple of weeks ago. It showed me I’ll get £930/month, plus I had a lump sum of £12,300. My redundancy payment after working for my employer for just shy of five years is £5570.57.
I’ve accumulated a whole bunch of workplace pensions over the years, a couple of which I’ve still got to get information on, but so far I’ve worked out I’ve got roughly £140,000. I’ve got an appointment with an IFA, so it’ll be interesting to see just how much I can get per month, to top up my state pension. Which I understand is going up by 10% soon, so that’s a bit of a help.
Not exceptional, but better than I’d expected, considering the rather fractured nature of my employment history over the years.
Still, I won’t be spending around £120/month on fuel commuting backwards and forwards to work.
FWIW, I’m 69 in July, I’ve kept working to top up my state pension, but also because I had a really good, well paid job, with a bunch of people who’ve been an incredible help to me dealing with personal loss, so it’s been of great benefit to me personally.
I might look around for something part-time, for a bit of extra cash, and to keep occupied.
When ever these kind of threads come up on STW it makes me terrified for my future, i and many others are simply miles away from such numbers that regularly appear on here and yet i feel im well off compared to many and very very lucky, the ones who are miles ahead feel they do not have enough....go figure
Its very odd and reminds me of a good mate who is a company FD, he complains about the minimum wage being way too high yet does not think putting 40k per year in his pension will be enough to live off, or the 150k salary he receives, even when i tell him he pays nearly double into his pension than the minimum wage he pays the staff, the penny still does not drop.....
I see similar on here often..
The whole LTA situation reflects on a Government which is over-taxing a particular strata of society. For years the middle classes have borne a significant proportion of the tax burden and by not raising allowances ever greater numbers have fallen into the claws of higher taxation. And now, by also not allowing some of the tax saving benefits (LTAs) to rise with earnings, those at the top end of the cohort - skilled, well paid, and often valuable, workers - are actually being penalised for their efforts. It’s a lack of joined up thinking, and you can’t blame those affected to arrive at the conclusion that they CBA.
Off topic, but in a similar vein, without joined up thinking we’re going to kill corporate investment in this country; corporate tax is set to jump but we’re making precious little provision to encourage companies to pay lower rates of tax by making generous enough allowances on capital investment.
Our tax system is a series of this year’s headline grabbing tinkering at the micro level rather than a grown up making long term decisions which make a sense in the whole.
I think @blackhat nails it. For years the middle class PAYE professionals have born a high tax burden, but there have also been tax benefits in the form of pension contributions and particularly DB pensions. There has been progressive increases in tax take, which largely went unnoticed since the proportions of the workforce affected were relatively small. However the take has reached the point of disincentivising the workforce affected, who are in a position to say “no thanks”. And their absence is now being noticed.
One such example of the tax rise is the 60% tax rate once one earns 100k up to 120k, and the individual allowance is removed to nil. Suppose you earn less than this but receive a bonus each year, that may from time to time put you above that threshold. Unless you’ve talked to the tax office about a higher tax code, you’ll get a seemingly unplanned bill come self assessment. A similar thing happens for pension contributions. Worse, in the public sector you can’t turn them off or find it from a pot (which doesn’t exist).
This is a modest problem in the scheme of things, affecting a small proportion of workers. But yes, we do need consultants in the NHS.
Changing the rules to increase the threshold from 4k to 10k (or equivalent) for annual pension contributions for people who have started to take their pension, may bring some retirees back into the workforce. Particularly into the public sector, whilst drawing their pension. I may also consider a public sector role if and when I retire for that reason.
@CountZero I’m sorry to hear about your job. I just read an article today about the company and the market sector. As you mention, work serves more than one purpose, and I could tell from your posts that you enjoyed it. I also learned a lot about potential cars!
£1m pension pots – which are firmly middle class (not rich by any stretch).
Of course that makes you rich. some folk on here have completely skewed ideas of the relative wealth of folk.
Of course that makes you rich. some folk on here have completely skewed ideas of the relative wealth of folk.
No one is claiming poverty. It’s just if you were in a minimum wage job and asked to go and work for free or pay to go to work there would be uproar
Because this affects people on reasonable salaries it’s acceptable because they have enough cash to deal with it. Well no actually it’s no more acceptable.
Consultants have seen some really spiteful nasty comments trying to make the public think consultants are greedy, rich money chasing in it for them people asking to cover the doctors strike at £250 per hour. That is just what highly skilled professionals should be being paid , especially whilst this f@ck up is still in place.
oh and then there is the fact consultant pay has been eroded by 30% over recent years. If you want to continue a race to the bottom these highly skilled individuals will go elsewhere where they can become rich !
Of course that makes you rich. some folk on here have completely skewed ideas of the relative wealth of folk.
Or maybe you have a completely skewed idea of the relative wealth of folk and don't appreciate what genuinely rich is. This is not to say that everyone on the edge of the LTA is not rich, but many with a £1m pot will simply have a comfortable rather than extravagant retirement particularly if they retire at 55 and/or if inflation stabilises at 6% or 7%, also considering life expectancy. It is often not a spare million, it is to last you 25 to 35 years. So very much middle class (whatever that means) lifestyle.
Or maybe you have a completely skewed idea of the relative wealth of folk and don’t appreciate what genuinely rich is.
No. It's you.
No. It’s you.
Given the sophistication of your dialectic skills I now know it's definitely you. 😉
On a serious note it's relative/subjective and down to personal experience and perspective.
We've put so many stats and figures into this thread already. More aren't necessary.
On a serious note it’s relative/subjective and down to personal experience and perspective.
It's relative, yes. But not subjective. This isn't a question of whether or not you feel rich.
No. It’s you.
Y'know, there is this middle ground between rich and poor - it's generally where you find the 'middle class' folks. These people are refered to as 'well off' because they can live well, but they are not rich. A million quid penion might give you 30-40 grand income per year in retirement, that is not the income of a rich person, that is just a comfortable living.
This isn’t a question of whether or not you feel rich.
So what is the definition of rich then?
When I had naff all money I thought £120k a year was rich, through experience I now know it is not.
What we should be talking about what is fair pay for a certain type of skilled job. Unfortunately some people are not currently getting fair pay for doing skilled jobs.
A million quid penion might give you 30-40 grand income per year in retirement
To me its not so much about retirement but how when working bloody hard now and then getting penalised for doing it.
A million quid penion might give you 30-40 grand income per year in retirement, that is not the income of a rich person, that is just a comfortable living.
Errmmm - its above the average working wage - that makes you rich
The lack of reality here about the poverty in this rich country is absurd and the lack of reality about how rich many of us are is frankly astonishing
When I had naff all money I thought £120k a year was rich, through experience I now know it is not.
Again - that would put you in the richest few % of our society. £120 000 per year are riches beyond avarice for the vast majority of the country 4x a nurses wage, 4x the average wage
I know I am rich with total assets of 3/4 million and income of £15000 PA without working
What we should be talking about what is fair pay for a certain type of skilled job. Unfortunately some people are not currently getting fair pay for doing skilled jobs.
I'm deliberately not making any comment on whether or not the LTA or tax structure is fair, or whether or not wealth is earned.
I'm *only* making the point that a £1m pension pot does indeed count as rich.
So what is the definition of rich then?
I think drawing an exact line would be difficult, but I think it's pretty fair to say that if you're in the top 10% of household net worth as an individual, that puts you firmly over the line.
When I had naff all money I thought £120k a year was rich, through experience I now know it is not.
The consideration is wealth, rather than income.
but many with a £1m pot will simply have a comfortable rather than extravagant retirement particularly if they retire at 55
"I can only afford to retire 20 years early, but I'm not rich"
“I can only afford to retire 20 years early, but I’m not rich”
Correct. Early / late is also subjective like rich/poor IMO.
The state pension retirement age is not exactly an absolute norm. Some choose to carry on working. Some retire early hence the fact that you can get your SIPP at 55/57.
In fact choosing to retire earlier than the state pension age is quite the opposite to being "rich" in many cases. It's choosing to be comfortable for longer rather than very comfortable for a shorter number of years.
Personal choices, personal perspectives.
Errmmm – its above the average working wage – that makes you rich
Here we go again. Unable to comprehend a reasoned argument here, so I suggest you just ignore TJ in this thread. It is WEALTH that makes you RICH. NOT INCOME. If you can't understand the difference you probably shouldnt contribute on a thread about it
30-40 grand income per year in retirement, that is not the income of a rich person, that is just a comfortable living.
assuming the mortgage is paid off, kids have left home and have the own jobs etc....
It is looking quite likely that people of pensionable age will still have large mortgages and dependents meaning even what were comfortable sums are not looking comfortable in 15-20 years time
Plus looks like NRA is going to increased sooner than planned (even though life expectancy has worsened). This means anyone in the civil service born in the 70s and is on a NUVOS/alpha scheme will suddenly have to work another 3 years longer as it is tied to NRA. Of course they can take it earlier than 68 but with large penalities.
I'm hoping I have good fitness/health as I can't see me retiring much before 70, unless I have a winning lottery ticket
Errmmm – its above the average working wage – that makes you rich
That definitely doesn't make you rich.
The lack of reality here about wealth in this rich country is absurd and the lack of reality about how merely comfortable many of us are is frankly astonishing.
The real question isn’t whether one feels rich or poor, it’s whether a tax system should disincentivise workers from continuing in occupations that are highly skilled, relatively well remunerated and socially necessary. The government have now worked out that the pips do squeak and need to do something about it. This is the fallout from George Osborne’s raid on pensions, that people thought would go unnoticed. And it largely did until people in the public sector started to get big tax bills for their effective pension contributions. BTW it’s not just the NHS. At the higher pay scales in the civil service and military, one can overstep the 40k annual allowance too.
Wait till they decide to remove the 25% tax free lump sum drawdown from a pension pot. That will be the day I retire! It’s already been mooted.
Agree with TiRed, the system shouldn't disincentivise work with punitive charges at particular thresholds etc.
Of course this has long been the case at the lower-paid end of the scale.
But 40k pa with no mortgage and no dependents really is a shed-load of money, what on earth do people think they are going to spend it on? How many new bikes a year do you really want?
Reminds me of the person on some 6-figure salary commenting that they weren't rich as they could only afford 2nd-level private schools for their various children rather than Eton or Winchester.
To late to edit, but that NRA thing is just on alpha, not nuvos thats still 65. I think! with the remedy and the moving over / back again between schemes I'm more than a little confused! Not that I will be anywhere near the 1m mark (I think) but this thread did make me go and check, so thanks for the prompt to do a bit of homework I have been putting off for some time
To me its not so much about retirement but how when working bloody hard now and then getting penalised for doing it.
Why do you think that you're getting penalised?
Here we go again. Unable to comprehend a reasoned argument here, so I suggest you just ignore TJ in this thread. It is WEALTH that makes you RICH. NOT INCOME. If you can’t understand the difference you probably shouldnt contribute on a thread about it
It maybe wasn't the clearest put, but I think TJ made a fair point that the wealth that you had in a pension pot granted an annual allowance greater than that of the average salary, and that yes, that amount of wealth might make you count as rich.
that makes you have an above average income. That is not the same as rich. income is one attribute of wealth. Its wealth that makes you rich
many of the richest in our society have zero taxable income and huge assets. With a taxable income of zero would they be deemed poor?
Agree with TiRed, the system shouldn’t disincentivise work with punitive charges at particular thresholds etc.
This.
Plus, as a matter of principle, the state should not encourage or support excessive wealth. Therefore support should taper.
Its both wealth and income that makes you rich
I love ignore me because I tell the truth that someof you do not want to hear
Salery of £120 000 pa - rich
pension pot of a million - rich
Wait till they decide to remove the 25% tax free lump sum drawdown from a pension pot. That will be the day I retire! It’s already been mooted.
an easy change along with the LTA increase would be to limit 25% tax free to an amount as well - say £250k to be close to what it is at the moment. That way people saving over £1mm aren't really going to gain very much from their savings, but they won't be penalised either
that makes you have an above average income.
Pensions are assets, not income.
Pensions are assets, not income.
"If you have a defined benefit pension (also known as a final salary or career average pension) you'll be paid an income for life, which will be taxable as earnings. You might also get a tax-free lump sum alongside this"
your point? when you take the pension it provides income, which can then be taxed. anyway it was relating to the point above of income from 1m pension pot vs average salary
We as a country are in a bad situation when our senior skilled people (doctors are the easiest example, but it hits many more) no longer wish to work due to the pension rules.
And TJ just no, this clearly isn't a topic where you will see anything other than your viewpoint. Above national average salary does not automatically equal rich (which was your original statement of fact). such a blinkered sweeping generalisation
pension pot of a million – rich
Not necessarily. There is no agreed definition of "rich" anyway. Subjective. And certainly not a binary proposition.
And TJ just no, this clearly isn’t a topic where you will see anything other than your viewpoint. Above national average salary does not automatically equal rich. such a blinkered sweeping generalisation
No - but 4x the national average wage makes you rich. more than the average wage as your pension makes you rich. 10X the average in your pension pot makes you rich
Some of you have really skewed ideas of what riches are in this country
To claim a million+ pound asset does not make you rich is absurd. to claim an income in the top few % of the population does not make you rich is absurd.
Agreed. Using doctors as an example, consultants earn in the top 2% of earners in the UK, and likely end up with pensions even closer to the top given the generous nature of NHS pensions. What you call it is immaterial.
No – but 4x the national average wage makes you rich. more than the average wage as your pension makes you rich. 10X the average in your pension pot makes you rich
the first of these does not. Rich is a classification of assets, not income. When I was ~5 years into my career I probably had 4x the average wage (depending on which method is used to measure that), but had a total net worth that was negative, due to student debts and exactly zero assets apart from a £1k car. I was not rich.
Of course you were in comparison to the vast majority of the population.
The total unwillingness to understand that owning and earning these huge sums puts you in the richest few % of the country is shameful
Rich is a classification of assets, not income
Defined by who and where? the two are interlinked.
your point?
My point is that it should absolutely be considered as wealth, rather than income. I quite agree that income does not equal wealth.
when you take the pension it provides income, which can then be taxed. anyway it was relating to the point above of income from 1m pension pot vs average salary
Yes, your wealth may be used to provide an income.
Noone is saying that you haven't worked for or deserve that pot of money. But you have an asset that, for no further work on your behalf, will provide you with an income that's greater than the average person who works 40 hours/week. In my book, that definitely counts as rich.
Rich used to be used to describe a lifestyle. When I was a child in the 60s (I think I'm about the same age as TJ), a millionaire was rich, and I lived in an area of North London where there were many such people. They would have a Roller, maybe a yacht, a big house, maybe with staff. You wouldn't get anywhere near that lifestyle on £120k pa and a £1m pension pot today - you may have an above average amount of money, it doesn't mean that you are rich.
Also to widen the argument even those on average wage in the UK are rich in a global sense. It’s all semantics anyway but to claim you’re not rich in relative terms by almost anybody’s description if the word of you earn 4x UK average wage is similarly ludicrous to politicians who claim its difficult to get by on 80 grand a year.
You may not have had assets but you could live extremely comfortably excepting if you were in some sort of major self inflicted financial bother.
on £120k pa and a £1m pension pot today – you may have an above average amount of money, it doesn’t mean that you are rich.
4 timnes the national average wage and 10x the average assets does not make you rich? Its puts you firmly in the richest few % of our society
Defined by who and where? the two are interlinked.
the dictionary?
https://dictionary.cambridge.org/dictionary/english/rich
having a lot of money or valuable possessions:
just because you have a different interpretation of the word, doesn't make it so
having a lot of money or valuable possessions:
Income as well as capital then. Seems simple. Now show me where its defined as assets only not income
Are you really trying to claim that if you had an income of a million a year but spent it all on leased cars and houses and coke and hookers and thus had little capital assets that you would not be rich?
Income as well as capital then. Seems simple. Now show me where its defined as assets only not income
income isn't money.. I can't buy something with the fact I have an income. Try this definition
"having money". Having a large income does not mean you "have money".
Of course it does! absurd. If you have an income of 4x the national average then you "have money"
Of course you can buy stuff if you have an income in the richest few % of the population
Now please - a definition that states its just assets not income
Rich is having paid off the mortgage. Wealth is forgetting how many houses you own. 😉
One fifth of pensioner households are asset millionaires. That includes property, savings and pension assets. BOMAD# is the ninth largest mortgage lender in the UK. In London it’s even higher. You can see where some of that pension income is going.
#BOMAD is bank of mum and dad.
A £1M pot converted to an annuity at 68 will get you £50k a year which is subject to tax. Not bad but hardly rich either.
I think there's some middle ground there - if you've a high income and thus have a large amount of available money, then yes, rich.
If you've a high income, but it's all being used to service prior debts (student loans, failed businesses, medical bills, whatever - not asset backed or luxury debts like mortgages or car loans) and you have little available to invest/fritter away, then no.
A £1M pot converted to an annuity at 68 will get you £50k a year which is subject to tax. Not bad but hardly rich either.
Puts you firmly in the top few % of the richest in the country
A £1M pot converted to an annuity at 68 will get you £50k a year which is subject to tax. Not bad but hardly rich either.
This.