Chancellor of the Exchequer Jeremy Hunt recently got himself in a bit of a pickle when he said £100,000 is “not a huge salary” for people in his Surrey constituency.
Writing on X, Mr Hunt was recalling a chat with a constituent in Godalming who was concerned about the government’s childcare offer, as it isn’t available if one parent is earning more than £100,000.
This, he said, is “not a huge salary in our area if you have a mortgage to pay”.
Naturally, his comments led to widespread criticism, with many arguing that the Chancellor is out of touch and pointing to the number of people on much lower incomes who are struggling with the cost of living.
Furthermore, figures from the Office for National Statistics show that the median gross annual salary for full-time employees in April 2023 was just £34,963, and that anyone earning more than £81,357 a year is in the top five per cent pay bracket.
Despite the criticism, Mr Hunt stuck to his position, later telling Sky News that he was speaking to a constituent who said that “what sounds like a large salary” doesn’t go as far as some might think in an area where local house prices are around £670,000.
Putting aside the politics of Mr Hunt’s comments and the argument over their sensitivity, there is actually a serious point to make.
Regardless of your wealth, your situation and circumstances can change over time, and factors beyond your control, such as house prices, mortgage rates and the cost of borrowing, can have a big impact on your finances and investments.
So even if you’re earning what most would consider a high salary, you can still find yourself under financial pressure.
If you’re a high earner, it’s really important to carry out a financial review from time to time, so you can establish where your money is working hard for you and where changes could be made.
Take a look at everything from your household budget and outstanding debts to your investments, savings, estate and inheritance plans and insurance policies, so you know where you’re starting from.
Once you’ve taken an overarching look at your finances, you can then determine whether you’re missing opportunities to grow your wealth, managing your exposure to risk effectively and taking advantage of any allowances you’re eligible to receive.
In short, you’ll be empowered to make the right decisions at the right time and ensure you remain on course to achieve your goals.
Of course, getting to grips with every aspect of your finances can be a daunting task, and keeping up with the ever-changing complexities of the financial world is also very difficult.
That’s why it’s so important to speak to a specialist financial planner, as they’ll look at your specific circumstances, priorities and objectives, and advise you accordingly.
A professional will be fully up-to-date with the latest market developments, regulations, product offerings and investment opportunities, so they can point you the right way when market conditions change.
At the same time, they’ll be able to help you set clear and realistic goals, manage your risk exposure and reduce your tax liability.
You can then get on with living your life with confidence and certainty, safe in the knowledge that you’re making informed financial decisions that align with your goals and ambitions.
If you have any questions about managing your finances and setting yourself up for the future, please feel free to contact us and we’ll be happy to speak with you.