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7 July 2023

Why are Brits on £180k so sad?

A new study of the wealthy reveals they feel just as precarious as the rest of us.

By Anoosh Chakelian

You might have noticed the headlines piling up. “I earn over £125k – and it’s not enough,” an anonymous senior recruiter told the Telegraph in April. “£200k a year and struggling: affluence isn’t what it was,” the Sunday Times informed us in May. Last October the Sun columnist and author Tony Parsons declared that a £150,000 salary doesn’t make you “super-rich”.

These stories may seem out-of-touch (the average UK household disposable income is £32,300). But to the top 10 per cent of individual earners, anyone paid £59,200 and above, there is a truth to them. High earners in the UK – and other equivalent economies – don’t feel rich, are finding it hard to make ends meet and feel precarious in their jobs. While they are aware of their privilege theoretically, they feel closer to the middle of the income scale, according to a fascinating new book.

“I never feel cash-rich”

William, a management consultant, who earns around £180,000

Uncomfortably Off is an anthropological journey through the perspectives, values and neuroses of the relatively rich in an increasingly unequal world. The intrepid academics Gerry Mitchell and Marcos González Hernando of the UCL Social Research Institute – experts on inequality – prowled the lobbies of Canary Wharf and entangled themselves in the web of LinkedIn to learn about the lives of Britain’s top earners.

There may be a steady drip of stories in middle-class broadsheets about the limitations of six-figure salaries, but in left-wing or progressive circles this is an underexplored area. Inequality as a subject is more often – understandably – studied through the lens of those in the direst need and that enigmatic electoral blob, the “squeezed middle”. As a New Statesman journalist, I have been far more likely to go and report from food banks than the corridors of multinationals. Any time I’ve written about Brits on the more comfortable end of the spectrum, the online response has been to question why their feelings are valid at all. Tune up the tiny violins, people say.

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[See also: To truly tackle regional disparities, we need a new type of devolution]

But it matters. The higher your income, the more likely you are to vote, and the greater your trust in political institutions. You’re also more likely to be directly involved in running the country – by definition, the top 10 per cent make our legislation (MPs are on £86,584).

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If the top 10 per cent feel worse off, this could have an outsize impact on policy, argue the book’s authors. With curiosity and without judgement, they probe their case studies about why they’re finding themselves hard-up.

One interviewee they name William, a management consultant in his forties who works for a major firm in Canary Wharf and earns just above the top 1 per cent threshold (at the time of the interview it was £180,000 – now it’s £183,000), explains:

“I feel fairly middle of the road and average, but objectively I know this is completely untrue. I know I am at the top of the income percentile, but I also know I’m miles away from the very rich. Everything I earn goes at the end of the month. Whether it is school, holidays, et cetera. I never feel cash-rich.”

William is at pains to say he drives a “sensible German car” and is “a million miles from the super-rich”. This is a classic bias: he is comparing himself not to the average, but the Ferrari-collecting strata just above him. “In his immediate social world, he’s surrounded by people much wealthier than he is,” the book notes.

We all do it, however rich or poor we are. Exclusive research by the New Statesman last year showed that overall members of the British public are far more likely to believe their social circle is better off (39 per cent) than worse off (11 per cent) than they are, and the pattern holds until you reach people earning more than £120,000.

They also underestimate rather than overestimate their income compared with the average. Brits are far more likely to feel that they have a below-average income (36 per cent overall) than above-average (16 per cent), compared with the general population.

Those in the top 10 per cent of earners are more likely to be exposed to the top 1 per cent, given the nature of their work. Lawyers, consultants, recruiters and financiers will often be in service to those with a lot more money than they have. They see that as rich, and themselves as “normal”.

“Even the very poor have a bit with welfare. I don’t think they are poor enough for me to feel sorry for them.”

Roy, 66, a finance director on over £100,000

This could be named the Fleishman Effect, after Taffy Brodesser-Akner’s 2019 novel Fleishman Is in Trouble, which was recently adapted as a TV series. In this story of upper-class Manhattanites, the wife of a surgeon feels – among their mega-wealthy circle of hedge funders and pharma bros – like the poor relation. “I am a rich man in every single culture except the 40 stupid square blocks that you insist we live within,” her husband rants. In the Sunday Times this year the journalist Simon Mills – a self-described “pauper among the 0.1 per cent” – labelled this social sub-class “the riff-raffluent”.

[See also: Prioritising private healthcare increases inequalities, says union]

Aimed at this insecure demographic, Uncomfortably Off – which was originally going to be titled Never Enough – entreats them to care more about inequality. After all, they should be invested in it. Inequality far up the income distribution is vast. Even those at the top 5 per cent mark (£82,200) are much closer to the national median than to the top 1 per cent (£183,000 and above), where all the wealth is rapidly accumulating.

“The top 10 per cent has become a microcosm of the entire wealth distribution in that those at the bottom of it are struggling to meet their expectations… while those at the top enjoy the compound annual growth of their wealth, accruing at a rate far faster than they could ever spend,” the authors write.

The middle class is therefore being “hollowed out” and on current trends, the top 10 per cent will over time look a lot more like the rest of society. If these people woke up to this, goes the book’s thesis, they could influence policies to the benefit of everyone.

“It doesn’t matter how hard you work, you may not earn enough money to break even, let alone make it out of your social class”

Maria, a marketing director in her forties on over £100,000

The top 10 per cent are stuck in fierce competition at work and among their peers to maintain upward social mobility. This is bad for their well-being and unsustainable. In the authors’ words, “as the fence grows taller and the club’s fees become more expensive”, they may no longer be able to keep up with the Jonesovs.

Some are beginning to resent this impossible treadmill. As Maria, a marketing director in her forties on over £100,000, has realised:

“50 years ago, if you worked hard you could earn enough to get your kids through school and then to university, and then they could potentially break out of the working class and make the middle class. It’s only just starting to hit the middle class that it doesn’t matter how hard you work, you may not earn enough money to break even, let alone make it out of your social class. And that is key – that change.”

But the narrative of meritocracy is stubborn in the minds of Britain’s better-off (as it is for most Brits). Pleas to fix inequality through welfare and other redistributive measures jar with the general “I worked hard to get here” mantra of this group in particular (the higher your salary, the more likely you are to believe you earned it through “hard work”). As Roy, 66, a finance director on over £100,000, tells the authors:

“I don’t think much about inequality in the UK, because even the very poor have a bit with welfare. I don’t think they are poor enough for me to feel sorry for them. The less well-off are less well-off because of schooling, broken families, uneducated families, lack of control, [and] blame everything on teachers.”

Sean, 40, the owner of an HR consultancy on a top 1 per cent salary, similarly says:

“If I’m funding people who are sitting at home and don’t want to work, then I’m not happy about it. If I’m contributing to people who are below the poverty line, fine. But do I want taxes to go up for higher earners? No. I pay more than enough.”

Persuading wealthier people to pay higher taxes would be tough. Interviewees in the book believe they’re taxed enough already, and if taxation is to be raised on the rich, it should only be some other level of the rich. “The 1 per cent income band is a nonsense bracket; you’re going from £170,000 to £100 million or more,” says Jonathan, 70, a semi-retired barrister living in London who still earns £170,000. He says there are “very few in the 1 per cent saying they’re comfortable”.

[See also: The quiet consensus]

From my work at the New Statesman on public attitudes to wealth, class and salary, kindly cited by the authors, it’s clear that it would be very difficult for politicians to work out where to pitch income or wealth tax rises. Even calls for taxing the “super-rich” may not translate. A quarter of Britons paid £100,000 or more identify as “working class”, after all, and 60 per cent of those on £80,000-£100,000 believe they are “about average” on the income scale.

An illustrative example from recent political history was an audience member on Question Time, before the 2019 election, calling Labour “liars” for promising to only increase tax on the top 5 per cent. He hadn’t realised his above-£80,000 salary put him in that bracket. He believed he was “nowhere near in the top 5 cent”, or even in the top 50.

Since then Labour has abandoned its plans to raise income tax on the top 5 per cent; last month this became the most recent of Keir Starmer’s leadership campaign pledges to be dropped.

If the authors of Uncomfortably Off are correct, however, increasing inequality alongside the rising cost of living may create the conditions for an epiphany among higher earners. “If economic structures are not working for the most privileged in our society,” Mitchell and González Hernando write, “then this is a sign that the wider system of reward is not working for anyone.”

[See also: The health disparities white paper has been cancelled. Why?]

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