Middle income earners ‘struggling’ despite salaries of up to £60,000, says report

Middle income earners struggling 'despite £60,000 a year earnings', says report

Middle income earners who bring in between £30,000 and £60,000 a year are struggling financially, according to a new report.

Caught in the middle was published yesterday (20 February) by Professor Donald Hirsch at the Financial Fairness Trust and Eleni Karagiannaki from the London School of Economics.

The researchers found that job insecurity among the middle third of the income distribution appears to have got worse since it was highlighted nearly thirty years ago. In particular, insecure work has grown sharply for single adults:

  • Lone parents are more likely to work than a decade ago, but even on middle incomes most of their jobs are now insecure
  • For singles without children on middle incomes, job insecurity has also grown
  • In contrast, for those on middle incomes in couples, there’s a three in four chance that one partner has secure work.

Private tenants face housing insecurity, often with unaffordable rents:

  • Three in ten private tenants in the middle have ‘unaffordable’ rents, defined as spending more than a third of their income on housing costs. This combines with the insecurity of private renting
  • People in their 30s are most likely to face the insecurity and high costs of being private tenants. There are as many private tenants on middle incomes as on low incomes in this age group
  • Rising interest rates could cause the proportion of households with unaffordable mortgages to almost double, from 10% to 19%.

Vulnerabilities more apparent

Professor Donald Hirsch, policy adviser at abrdn Financial Fairness Trust, said: ‘Being on a middle income does not make people secure. In the present cost of living crisis, the vulnerabilities of people on modest incomes have become more apparent.

‘They face significant uncertainties, and are rightly encouraged to save both for rainy days and their retirement. Yet if they are also paying off student debt and have high housing costs, it becomes difficult to maintain a decent living standard today – even at the minimum level often associated with lower income groups.

‘Measures to improve predictability, stability and the right to flexible working had been promised for the present parliament, but were not delivered. In the coming parliament, this should be a priority.’

He added that 20% of those in the middle fifth of the income distribution were struggling to pay for food and other essentials.

‘It is people earning between £30,000 to £60,000 a year, depending on the type of household, people who you would expect to be doing OK,’ he said.


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