There’s a solution to this

The rise of the £150,000 millennial earner – and why this luck could soon run out
Young entrepreneurs are starting to earn big money but by rejecting the safety net of employment they could be putting themselves at risk

The number of under 40s who are making this sum or above rose by 38%.

OK, cool. The “worry” is that they’re missing out on unemployment pay etc etc and those accoutrements of the welfare state because they’re not employed and not paying full NI whack.

Umm, yeah, but they’ve got significant incomes, sufficiently significant that they can go buy those insurances. Actually, sufficiently significant that they can go save and produce an income which equals that welfare state.

The risk, as long as they do that of course, is minimal. And the cost? Well, higher earners pay much more in than the value of what they might get out using the state mechanisms. Thus they’d be better off going that private route anyway.

18 thoughts on “There’s a solution to this”

  1. The payments are sod all, and come after you’ve drained your savings.

    And, OK, these are people making £150K. Maybe Covid gives them a bit of a beating, but people who can earn that much tend to be useful people. Most software specialists could downgrade to doing PC support. Which would still pay more than the dole.

  2. Bloke in North Dorset

    The sort of person who has the competence and drive to earn £150k in the private sector isn’t the sort of person who ends up on the dole.

    Those who make £150k a year doing non-jobs will just have to learn to cut their cloth. Its hard to have any sympathy with someone who’s been earning £100k plus for more than a couple of years if they didn’t save enough to see themselves through 6 months of economic turmoil.

    And shouldn’t the Telegraph be celebrating this rather than trying to turn them in to supplicants of the State?

    The number of young people choosing to become their own boss is rising faster than in the general population, official figures show. The number of millennial company directors hit 56,000 in 2018, up 37pc from the previous year.

  3. Older Millennials are pushing 40 now so no surprise there are more high earners.

    I fail to see why this is a cause for concern.

    Dear Christ, the Terriblegraph is a miserable rag these days.

  4. I would think that baristas and pub staff etc are far more at risk than people who earn £150k. No wonder print journalism is dying if all they do is publish articles with zero content

  5. Bloke in North Dorset

    Diogenes,

    Yes, but that article is almost an advert for Salisbury House Wealth and the wealth management industry in general. It isn’t because it stops short of explicitly saying anyone earning that much really should let us manage their wealth.

    As an aside, we bought the Telegraph and Sunday Telegraph at the weekend, first time in years. It came across as a much better read with far less crap. It looks like the lack or advertising has made them tighten up the writing, maybe by furloughing the weaker writers and concentrating the minds of those who are left, and sticking to what’s important to their readers rather than their own interests.

  6. experts have warned that this group is one of the most vulnerable to the financial aftershocks of coronavirus

    I haven’t got a subscription so can’t read the full piece, but do they actually back up that assertion? Or is it a case of unnamed “experts” strike again?

  7. experts have warned that this group is one of the most vulnerable to the financial aftershocks of coronavirus

    People earning £150k? What the fuck? These people (the article writer) are on drugs.

  8. Bloke in North Dorset

    Andrew M,

    Its not behind the firewall, at least to the point that I got through using Brave:

    Tim Holmes, of financial adviser Salisbury House Wealth, which submitted the FOI, said high-earning young people often work for themselves. “Worryingly that means they are at risk from a huge fall in income at the moment,” he warned.

  9. @Rob

    Depends what you mean by at risk – if they’ve been sensible they should have plenty tucked away for a rainy day, so no sympathies there from me. But high earners historically do have very severe income contractions during economic shocks, proportionately. One of the risks of having a tax base concentrated in income tax of the higher earners is that the flow dries up quickly in a downturn compared to a wider tax base.

  10. “Worryingly that means they are at risk from a huge fall in income at the moment,” he warned.

    That statement is obviously true – the self-employed are at risk from falls in income at any time. That’s part of the point of self-employment – you take the higher rates to cover the lean times.

    What it doesn’t say is that those at risk are fucked if the cash flow dries up. No doubt the wealth management company is keen to highlight the risks of not planning for lean times, and happy for the terriblegraph to advertise for them.

  11. What risk? To a Keynesian – and we’re all Ks now – this is a self solving problem. High incomes fall, tax revenues fall, deficit blows out, that grows the economy again…..

  12. @Tim

    I think even someone advocating that view would have to acknowledge a risk for eg a Eurozone economy or US state with constitutional balanced budget requirement, that they may end up being forced into a policy of austerity at a juncture where they would rather avoid one.

    How many of them would argue the existence of a budget deficit due to business-as-usual spending and sub-par tax receipts is, in itself, a “fiscal stimulus” though? Rather than raised levels of public spending or transfers?

  13. “How many of them would argue the existence of a budget deficit due to business-as-usual spending and sub-par tax receipts is, in itself, a “fiscal stimulus” though? Rather than raised levels of public spending or transfers?”

    Well, Krugman etc would because he’s done so. Politicians not so much of course.

  14. If they haven’t put enough away to last literally years with no income, despite earning £150k, then that’s their problem.

  15. It’s not as simple as it seems. An entrepreneur may have started earning £150K only years after taking out large loans to finance starting the business and making do on a much smaller salary. Such loans may well include personal guarantees, so if the business fails the entrepreneur goes bankrupt, which may also include losing any provision made for bad times. If you’re a PAYE worker, lose your job, and go bankrupt, this does not affect your entitlement to benefits.

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