Wannabe middle class Brits rack up £35 billion of debt

We're all middle class now... or so we thought. How many Brits who classify themselves as middle class are actually working class by financial standing?

15 million wannabe middle class Brits are in denial of their true working class status, and instead are turning to debt to finance their lifestyles. In their attempt to keep up with the ‘upper middle class', middle class wannabes are supplementing their income with a combination of secured and unsecured loans totalling nearly £35 billion.

More worryingly, the survey by price comparison website moneysupermarket.com revealed that more than 6 million of these ‘wannabe middle class' households bring in less than £15,000 a year - well below the national average. This clash of earning power and social class means people are relying on credit cards and bank loans to finance their monthly spending - while many use secured credit, 2.7 million turn to unsecured loans, with each person having an average debt of nearly £13,000.

Class Shift

People aspiring to be middle class actually display many of the same financial and lifestyle characteristics as those people claiming to be ‘working class'. Rent and mortgage payments were found to be virtually the same at £366 for a working class household compared to £334 for those claiming to be middle class. Average income between the two sectors also varied little (£23,000 for the ‘working class' and £33,000 for middle class) but by contrast the ‘upper middle class' were found to earn a great deal more with mean earnings of almost £52,000 a year.

The ‘upper middle class' are also spending twice as much as the ‘ wannabe middle class' on rent and mortgages (£668 compared to £334), and more than twice as much on the most visible sign of wealth - going out and entertaining (£206 compared to £89). Unsurprisingly this group is also now where you can find the outward signs of what was once associated with a typical middle class lifestyle. For example the true middle class are far more likely to have domestic staff - 34 per cent of the true middle class have a cleaner, and 20 per cent have a gardener - compared with 13 per cent and 11 per cent respectively from those declaring they're middle class and funding these luxuries with borrowed money.

Sue Hayward, a personal finance expert and journalist, and a consultant to moneysupermarket.com on the project said: "It's amazing to see how close the earning and spending patterns of those people claiming to be working and middle class are - I know class divides have moved in recent times but this shows the gap is shrinking. This research will really drive home to people that if they want to get their hands on the luxuries the true middle class are enjoying then they need to save money where they can, and look at better ways of managing their money and not relying on credit cards to get them through".

Richard Mason, managing director of Insurance and Home Services at moneysupermarket.com said: "With the credit crunch taking hold and the housing market faltering it's worrying to see that so many people are spending and borrowing beyond their means to try to keep up with the lifestyles of others. Consumers need to take immediate stock of their household budgets to identify the pressure points and seek money saving opportunities."

Reverse snobbery

Interestingly there is also a reverse trend to the ‘wannabe middle class' taking place - instead of people aspiring to have the middle class status, they are wanting to be part of the honest, hard working, fashionable, working class. A staggering 10.2 million (48 per cent) of those declaring to be ‘working class', earn over the average annual salary, bringing home between £25-50,000 per year, with an additional 5.3 million so-called ‘working class' people on incomes of over £50,000.

Where are the social climbers?

By comparing the disposable income and the amount of people calling themselves ‘middle class' in ten cities around the UK, it becomes clear that Cardiff is home to the most aspirational social climbers. Residents of the Welsh capital believe they are middle class, in spite of the fact they earn less money and are only able to afford the luxuries of a middle class lifestyle by borrowing. By contrast, cities at the bottom of the table, such as Leeds, follow the reverse trend with many of their residents claiming to be working class but having higher than average levels of disposable income to fund their middle class lifestyles.