What is £13400 a year?
Someone called the Joseph Rowntree Foundation is reported as saying a single person needs £13400 a year to live an acceptable lifestyle, whatever that means. Couples and families need correspondingly more.
Let’s see. In round numbers, you’d pay 31% tax on £8000 of that, leaving just under £11000, or £900 per month. In a reasonably cheap area, that would leave £300 after rent, and £150 after council tax, water/gas/electricity, telephone and ADSL. Indeed, not a lavish lifestyle, but not too bad: well over twice what I had in the lean years (before 2004).
What if you live somewhere expensive, like London? I don’t know where London prices are nowadays, but I don’t imagine you’d get anything more than a grotty bedsit in a run-down area for £600 – or even £900 – a month. Standard lifestyle for a student or young graduate, but not something I’d care to return to, at least not without the package (rich social life, zero/low cost clubs and societies).
But hang on a minute! Googling the actual report tells an altogether different story. They put rent at £52.80 a week. Erm, where the **** do you get that? Highly-subsidised “social housing” maybe, but did you ever hear of a single person qualifying for that? Must be an average that includes those who own a home or live rent-free – e.g. with parents.
And they put spending-money at £157.84 a week (£684/month)!
Yow! I don’t think I’ve ever sustained that much (excluding housing) for as much as a year, nor ever will until and unless I’m a property-owner. Not even now that I’m paying top-rate income tax on more than half my income.
Furthermore, I can’t imagine many non-property-owners have that much spending money after housing costs. Have they just arrived at the fundamental principle of economic life in the UK: If you own property, you’re rich, if not you’re poor. Income is irrelevant except at major-celebrity or city-banker level.
 OK, that’s just a half-truth: it relies on excluding the money going into a SIPP, so I’ll be able to pay off a mortgage when I retire without all my money going in tax.
 And reclaiming some of it, by virtue of having the SIPP.