Martin Waller and Gráinne Gilmore
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The spiralling cost of living is hitting middle-class wallets harder than all other sectors of society, analysis by The Times suggests, with services such as nannies, public school fees, private healthcare and house cleaners rising on average at more than twice the official rate of inflation.
A ground-breaking study from this paper two years ago showed that so-called “middle class inflation” was running far ahead of public perception. The latest figures, taken from official statistics and bodies such as the Independent Schools Council, show that rises in such services have accelerated as food and energy bills have shot ahead for everyone.
The consumer price index (CPI), the measure favoured by Alistair Darling, the Chancellor of the Exchequer, this week showed a year-on-year rise of 3.3 per cent. But this is flattered by falling prices for footwear and clothing. Meanwhile costs in the services sector, which is disproportionately used by middle class professional parents, both of whom are likely to be working, are still soaring. The original study in The Times study in August 2006 showed that the cost of private school fees was rising by 5.7 per cent a year. The latest figures from the ISC show that fees are still rising at this rate.
But the cost of employing a nanny in Central London is accelerating rapidly. Two years ago salaries were going up by 4 per cent each year. The latest figure, gained from Nannytax.co.uk, was 15.2 per cent. The cost of employing a cleaner, which is covered in the alternative retail prices index (RPI) under domestic services, is also accelerating. Against an annual rise of 4.6 per cent two years ago, wages are now up 4.9 per cent a year.
What is hitting middle class professionals hardest is the compound effect of year-on-year rises at twice the official inflation rate, at a time when their salaries, if they are rising at all, are probably pegged to that rate. As a consequence, a 6 per cent rise in school fees, for example, compounded over the eight years since the start of the decade, means they have actually risen by 60 per cent over that period.
Meanwhile the middle classes are not immune from the rises in costs that are hitting the population as a whole. Two years ago annual food price inflation was a relatively benign 3.2 per cent, while the cost of alcoholic drinks was actually declining slightly. The latest CPI shows food costs rising by 8.7 per cent annually, while alcohol is ahead by 5.4 per cent.
The CPI is calculated by monitoring a range of goods and services and giving each a weighting according to their relative importance in an average household’s spending. So offset against higher food and drink costs, and so bringing the average down to the reported 3.3 per cent, are relative falls in the cost of clothes, shoes and electrical equipment such as TVs and DVD players.
The five categories disproportionately used by the professional middle classes, however, are social protection, which takes in nursery fees, playgroups and retirement homes, health insurance such as that provided by BUPA, domestic services, private school fees and nannies’ salaries.
Analysis by The Times suggests that this “middle class basket” has risen in cost over the past year by 7.5 per cent, more than twice the rate of inflation as measured by the Treasury.
Tom Harris, the Transport Minister, caused an uproar earlier this week by telling families to “stop being so bloody miserable”. He meant that living standards over the past few decades had improved so dramatically that a temporary dip might not be the catastrophe it appears.
But for many Times readers, gingerly opening the letter informing them of next year’s school fees and wondering why the nanny seems so much better off than they are, everything is relative. And the merlot they drink to calm their shattered nerves is not getting any cheaper either.
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I am not sure I could ever be middle class, banding does not show that the current climate hits all. I worked hard, but was taxed heavy for having a company car, I needed for the job (not a perk), private health, and they even taxed the pensions. I have now left the UK, life,tax, safety all gone!
Harvey G Monk, Dubai, UAE
Yes thats exactly why Labour will be routed in 2010.
Ian, Bristol,
Im severely disabled, trying to feed and house a family of 5 on benefits for 3 due to the way the system works. I have no choice but to use a van doing about 20mpg to get about . I regularly have to choose between diesel fuel and food. 25% inflation when you dont buy new cars and high tech toys.
am, letchworth,
It's all very well laughing at the Middle Classes who can no longer afford luxuries such as cleaners, nannies etc. But don't forget if these people are no longer employed, then the plight of the lower class families is further exacerbated.
Ask not for whom the bell tolls. It tolls for thee !
Mark Smithard, Houston, USA
Clearly this is all about double income families who want it both ways.
What about pensioner couples, who"s double (fixed) income requires them to fund council tax and domestic fuel bills alone at the rate of 18% of available resourses?
Now these are the people who are really hit the hardest
Maurice Smith, Medway, UK
my pension increase was £1.67 this year.help is not at hand for all of us. had i abanded my children they would be the poorer and i now perhaps affluent.
peg, beckenham, eng
To Mark in Epping, you're obviously in the wrong borough, move down the road to Buckhurst Hill, the council give out benefits like sweeties. The working classes don't see what the fuss of owning property is all about or education, they just want to have fun! Whilst our crippling taxes pay for them.
James, London, UK
I am 'middle class' and school fees are crippling me. Why don't I send my children to the local state schools? Because they are all rubbish. Would you send your kids to 'ghetto' schools?
Virginia, Islington,
They have to start economising. Get rid of the expensive 4x4's. You really don't need them to drive around inner London. Use state schools and hospitals and clean their own homes!
Luke, London, UK
dont think the working classes will escape either. the elite hate the middle class. once they have put them firmly in their place you can bet it will be us next. this is a pretext to slavery.
time to rebel, people. surely we come before banks and corporate bullies!
david o malley, bolton,
So the poor are really better off than they rich? Offensive nonsense.
julia, london,
On the basis that the middle classes are expected to fund lower earners with things like free school meals for children they don' even have I think they have a right to complain. They earn their money - they should be able to spend it how they like, even paying for nannies - its job creation!
Rose, Stirling,
But surely those whom The Times arbitrarily describes as "middle class" (largely focussing on middle managers, I suspect) are the very people whose wage inflation has ALSO raced ahead of the average?
How many of them actually exhibit middle class virtues: thrift, charity, responsibility, industry?
Ian Kemmish, Biggleswade, UK
We'll know when the working and benefit class really feel the pinch, the number of satellite dishes on our former council estates will start to fall.
Will, Lincoln, England
"...nannies, public school fees, private healthcare and house cleaners..."
This perfectly encapsulates the way in which media types are completely out of touch with the rest of this country. Most of the middle classes don't have any of these.
Ben, London, UK
I am horrified by the poor spelling, punctuation and grammar appearing in many of these comments. Is this caused by bad schooling or poor typing skills? Does it say something about our state schooIs? Is this why hardworking young parents work overtime to be able to afford a private school?
Isabel Michie, Noosa, Australia
I am totally gutted, there i was thinking i was middle class and we don't even have a cleaner. Its rough up in Cheshire but we eat well, go out a lot and have lots of holidays - good thing we don't have to pay for all those posh things!
John, Cheshire,
So - only two holidays this year?
Frank Upton, Solihull,
My heart bleeds for the poor hard-pressed middle clases. School fees up, nanny fees up, oh whatever next?
Give them up and spend the money you save on extra bottles of merlot to forget the terrible lifestyle you now have to lead!
Mark Armitage, Leamington Spa,
Mary from Derby, you have echoed my thoughts exactly.
Sally, Letchworth Garden City, UK
Do yummy mummies know how to clean?
Lynne, melbourne, australia
The middle class has been expanded by those with the lifestyle but not the income.
The credit crunch has stripped away the ability to live beyond your meens. That must be a good thing in the long run - Uncomfortable but required.
It has been fun, but now it's back to work everyone!
Mike, Tauranga, New Zealand
These items are not essentials. Surely the people being hit the hardest are the poorest whose entire income is consumed by food, gas, electricity, petrol to get to work etc.
Allan, Torquay,
The poor don't have these expenses, and for the rich its self explanatory, no revelation here.
Perhaps fewer holidays, a cheaper merlot, doing ones own cleaning is the order of the day.
Perish the thought !
What would Hyacinth think?
Keeping up appearances can be expensive after all
Jason Pearson, Toronto, Canada
The best performing state school is still well behind the private sector. Then there are all the other myriad of benefits. So no thanks, we will take the financial pain. The alternative is not worth thinking about.
Robert, Kendal, UK
All over the world, the current financial meltdown translates to a war against the middle class. Those who relied on debt i.e. loans to preserve their way of living are now waking up to a crude reality -- that many of them may end up being worse off than the poor.
Mathew Maavak, Kuala Lumpur, Malaysia
They can always just send their kids to comprehensive schools. That should save some money.
Geoff, New York, US
So the hard-pressed bourgeoisie might have to learn to clean their own houses instead of hiring some plebs to do it for them. Tough times ahead and there was I thinking that people on the lowest incomes were hardest hit by higher costs. Food and fuel are obviously luxury commodities then.
Paul, Coventry,
My Heart Bleeds. Their are people on low incomes who cannot afford to eat and heat their homes, a £1000 hike in annual gas and food bills is practically a death sentence to many a war veteren not to mention low income families with mortgage problems. Get a grip.
Mark, Epping, Essex
So ... do I assume that being middle-class is now defined by 'nannies, public school fees, private healthcare and house cleaners '? I remember a time when these would have been upper middle class attributes. Where does that leave we professionals who don't have the above mentioned. Working class?
Mary, Derby,