Many people in the UK earning £25,000 or £30,000 a year feel as though they don’t earn enough. Some would even describe themselves as poor. By global standards, though, they’re relatively well off. So why do so many people feel poor?
We compare ourselves with our neighbours
Most of us don’t compare our income with people in other countries. We compare ourselves with the people around us: friends, colleagues, neighbours and what we see on social media. It’s hard to feel well off when you drive past a £1 million house on the way home from an average street.
This is often called “keeping up with the Joneses”. It can leave people feeling poor even when their income is good by any wider measure.
How UK incomes compare
Some figures help put this in context:
- The median UK household had a disposable income of £39,200 in the year to March 2025, after tax and including benefits (ONS).
- Worldwide, about 838 million people lived in extreme poverty in 2022, on less than $3 a day (World Bank).
Want to see where you rank? The How Rich Am I? calculator from Giving What We Can compares your household income with the rest of the world, adjusting for household size and living costs. Most people on an average UK income find they’re in the richest fifth of the world’s population, and often much higher.
Poverty in the UK is still real
None of this means that hardship in the UK isn’t real. The UK measures poverty in relative terms: a household is in relative poverty if its income is below 60% of the national median. In 2024/25, about 13.4 million people, or 20% of the population, were in relative poverty after housing costs, including 27% of children.
Costs in the UK are also high, especially rent, energy and childcare. A household that’s well off by global standards can still struggle to pay the bills here. Comparing yourself with people in much poorer countries doesn’t pay your rent.
But for those of us with a decent income who still feel poor, it’s worth stepping back.
Most of us live better than any previous generation
Most households in the UK have central heating, a fridge, a phone, internet access and the protection of the rule of law. Life expectancy is far higher than a century ago. Most of us live in ways our great-grandparents could hardly have imagined. Yet it’s easy to take this for granted and focus on what we don’t have.
The income gap between the richest and everyone else has grown in many Western countries. But in some ways the lifestyle gap has narrowed: a billionaire and an average earner can use the same smartphone, stream the same films and buy many of the same everyday goods.
What this means for your money
Feeling poor because you compare yourself with others can push you into spending you can’t afford. Recognising how well off you already are can help you:
- Resist the urge to keep up with the Joneses
- Spend on what matters to you, not what impresses others
- Save and invest the difference, building real security over time
So next time you drive past a £1 million house, don’t feel bad that you’re not living there. Appreciate what you have, and focus on building your own wealth at your own pace.
If you’re struggling with money, free and confidential help is available from MoneyHelper and StepChange.
Pedro is passionate about finance, marketing, and technology. He is a growth manager at several online projects and a former digital marketer for a fintech company.
