Why the middle-classes are not as posh as they used to be

Walking through Buxton a couple of years ago, I passed the offices of the law firm set up by Tim Brooke-Taylor’s family. I couldn’t help wondering how many small town lawyers would be able to send their sons to Winchester nowadays. (I have random thoughts like that when I’m strolling along with nothing better to think about.) Not many would be my guess, given that boarding school fees have risen at a much faster rate than salaries over the past 30 years and Winchester is one of the most expensive.

Middle-class professionals have been complaining for some time that the the lifestyles their parents enjoyed are now beyond their means. Top end boarding schools, private health insurance and family-sized houses within a short commute to London are out of the reach of many people who grew up assuming such things were normal.

Earlier this week, the FT published an interactive map showing the areas where you could afford the average house price if your household income was at the 95th percentile. (You have to register for the FT but it’s free and well worth it just to look as this fascinating map. Allow yourself at least half-an-hour to pay with it.)

In 1995, 95th percentile earners could afford to live almost anywhere, with the exception of parts of central London and the posher bits of the stockbroker belt. But by 2012, they were priced out of much of London and large areas of the South East, as well as desirable second home areas like North Cornwall.

A study by Brian Bell and Stephen Machin for the FT has found that a gulf is opening up in the earnings of middle-class professionals, with a small number of very wealthy people pulling ahead of all the rest. In many professions, mean earnings have fallen below the 90th percentile over the last 35 years.


Academics, engineers, architects and scientists have seen their pay fall in relative terms.

Even this data may understate the gap between the very rich and the rest. The earnings of those in partnerships, like the big law, accounting and consultancy practices are not publicly disclosed and are therefore not included in the ONS dataset.

Data from the World Top Incomes database tells a similar story. We are used to hearing that the top earners have increased their share of the wealth over the past couple of decades.


Even the top 10 percent has increased its share slightly.

But look at the share of the 90th to 95th percentiles and the 95th to 99th percentiles. Both have fallen. It’s the top 1 percent that push up the figures. Those just below them have seen their share of income fall.


The painful fact for many people is that their jobs no longer pay enough for them to enjoy what they had been brought up to think of as a middle-class lifestyle. They can’t afford to live in the sort of house in the sort of street where they grew up. They can’t afford to send their children to the schools they went to. And those nice leafy hospitals their parents used to go to, forget it. The super-rich can still afford these things, though, so the prices keep going up, well beyond the reach of the old middle-classes.

Priced out of fashionable London suburbs, private schools and even foreign holidays, being middle class just ain’t what it used to be. Globalisation, financialisation, recession, secular stagnation and falling wages have taken their toll on middle-class jobs and pay. Not as much as they have hit the poor, of course, but still enough to come as a bit of a shock. These days, if you are in the top 5-10 percent of earners, you are just not that posh any more.

Update: Excellent piece from Lucy Mangan in the Telegraph on the fall of the middle class. It’s long but worth the time. Thanks to Andrew Sharpe for the link.

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13 Responses to Why the middle-classes are not as posh as they used to be

  1. Laurie A says:

    Another excellent post Rick.

    I’d just add that focussing only on (earned) income ignores the effect of capital and – a favourite of this blog – the ageing population.

    Those who cannot afford the houses they grew up in are also likely to be those who inherit those houses, worth many times what their parents paid for them. However, with current demographics they may well not inherit until they are pensioners themselves, compared to their parents who may have inherited in their 40s.

    In cash terms, these people are going to be as wealthy as their parents, but not until much later in life.

    • Rick says:

      All good points Laurie.

      Some anecdotal evidence that grandparents are helping out with things like school fees, so some of that accumulated wealth is already being passed on.

      I’ve left a lot of hanging threads in this post. I could have written an essay on it. I’ll be returning to the subject in more detail soon.

  2. david says:

    Interesting and you raise good points Laurie although I would suggest my generation inherited rather later than the 40’s you suggest (in my case 60’s and zilch !)
    I’ve witnessed this happen throughout my life and suggest that the ‘middle class’ has expanded somewhat . So instead of being only the lawyers bank managers and doctors , we now include many that were merely ‘trade’ before ?
    Could that be described as a democratisation of the middle classes ?

  3. prateekbuch says:

    Cracking post Rick as always.

    What’s interesting is at what point people consider themselves to be middle class – with the important caveat that Laurie A raised in mind, anybody on the 95th percentile (as my household finds itself, me a science communicator and wife a teacher in London comp…) cannot really call themselves middle class wrt earnings and yet that’s exactly how we perceived ourselves.

    Anecdotally I recognised the priced-out phenomenon enough to be considering buying land and building a pre-fab hippy eco home – only way I can afford what my parents, largely on a single GP’s income, afforded readily.

    Key observation for me is that this rise of the super-rich is reflected almost across the board in many professions – giving the impression that it’s underpinned by a cult of worshipping management and leaders – and overvaluing their salaries. As distinct from mega-entrepreneurs “earning” their wealth through risk-taking innovation. Or something – jumbled thoughts on a Friday afternoon!

    Finally – a US perspective in which looking at 95th percentile makes for scary reading – will wager that top 1% pulls away even more there… http://www.brookings.edu/research/papers/2014/02/cities-unequal-berube


  4. roGER says:

    Very true. When I returned to the UK in the mid 1990s, the salary level for my job was 30K to 35K. Not a great salary by any means but more than enough for a comfortable life.

    Fast forward to 2013 and the salary level for the same job remains at 30k to 35K. I’m not sure how much of a pay cut that represents, but subjectively it feels like 1/3rd to 1/2. Oh dear.

  5. Churm Rincewind says:

    Do I detect a note of complaint in this blog? Personally, I’m entirely indifferent to the question of whether a small town lawyer can afford to send their progeny to Winchester.

    Or, if this post is merely an observation, then I’d merely say that I welcome any reduction in the self-elected entitlements of the middle class.

  6. John says:

    Sorry for the late comment. I am following this thread from a later posting.
    One aspect that also applies to older people inheriting from their parents or other relatives is that they may well be inheriting much less than in the past in real terms.
    If people live longer, much of their capital wealth may be consumed in nursing home charges.
    It is all very well living into our 80s, 90s and even making the ton but who is going to pay for it?
    My guess is that it will be the next generation, who will inherit little or nothing from us.
    Not that this will be of any concern to doctors or financiers.

  7. Dave says:

    Quite possible to be middle class without either attending or sending your kids to a private school (if 7% of children are privately educated, how big do you think the middle class is?) – what about the improvement in state school’s performance?

    Also, looking at the London property market, although certain areas are now out of bounds for say a teacher or architect in a way that wasn’t the case 20-30 years ago, what about those areas (such as Hackney or Brixton) that hardly any middle class people dared buy in back then?

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