Sunday, April 29, 2007

The 'nouveau poor'

Did you realise that there are some people in the UK who can no longer afford a home in the country, a flat in London and the school fees.
It is a national disgrace that they are reduced to such poverty .
Sebastian Cresswell-Turner whinges:

When I was a boy, almost everyone we knew lived in a large house in the country or in the better parts of London. I am not claiming for a moment that we were especially grand – just perfectly well-off. But back then Battersea and Clapham were entirely off our radar, Stockwell another country, and Brixton, Peckham and Streatham simply unheard of. Now, with a few exceptions among those who are notably rich or successful, the next generation of the same families I grew up with is living in just these areas.

Then take private education. The number of people in my parents’ circle who sent their children to state schools could be counted on the fingers of one hand, and were regarded as unfortunate, odd or even subversive. A generation later, however, a considerable proportion of my friends have opted for state schools for their children, in almost all cases for financial reasons.
If this is not downward mobility on a broad scale, then what is?

Consider a successful journalist friend of mine who went to St Paul’s girls’ school and then to Cambridge. At the same time as putting her and various others through private schools, her father, a surgeon, was able to provide a house in Chiswick and a weekend cottage in Wiltshire with ponies and all the trimmings. Every winter they went skiing and summers saw them in France or Italy.
But a generation on, even though my friend and her husband – both professionals like their parents – earn the considerable joint salary of £140,000 a year, the bourgeois ease of their youth seems unthinkable. In spite of their undisputed professional status and more-than-respectable earnings, they are downwardly mobile.

So how much does a married couple with three children need to live the sort of life that reasonably well-off professionals of my parents’ generation took for granted? The property alone – a house in the country and perhaps a flat in London – will cost a minimum of £3m. Then the school fees will be £75,000 a year plus extras; after which food, clothes, cars, the odd holiday and all the rest will add another £50,000 at the very least.
Even if you own the bricks and mortar outright, as everyone in my parents’ generation did, that implies a pretax income of at least £200,000. Throw in a mortgage and a margin for error, and you’d better be on . . . what, a third of a million a year? And this, mind you, to live comfortably, no more.

A popular member of White’s, the St James’s club to which many of the old landowners belong, knows plenty of well-educated professionals who have fallen by the wayside. “First, they can’t afford to eat out,” he told me, “then they pull their children out of [fee-paying] school, and you just stop seeing them.” Brian Gill, a London-based debt counsellor, told me: “The poverty line is definitely creeping upwards.”

I somehow suspect many would happily cope with this sort of 'poverty'.