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DrRylandGrace · 26/05/2026 15:44

BIossomtoes · 26/05/2026 15:25

Why should people substantially poorer than these pensioners be being hammered with the highest tax rates in peacetime in history

The standard basic rate of income tax was 41.25% the year I started work with NI on top. Just the taxation element was more than higher earners currently pay.

I very politely asked you what the evidence is that boomers have a lifetime deficit of £200k and millennials have a £300k surplus but you ignored me. Would you do me the kindness of providing that evidence, please?

You do have access to the internet, I presume, given you are posting here?

As stated previously there are multiple detailed economic large-scale data studies on this matter which have also been reported in multiple national newspapers if you don’t like having to deal with the formulas and academic language in the original papers published in journals and accessible via pubmed etc.

DrRylandGrace · 26/05/2026 15:43

Katypp · 24/05/2026 19:48

Complete nonsense.
The pension is going to disappear in 20 years or so? Engage brain.
You are right - young people have no money. They never have any money. There is nothing unique about today's young families having no money. It was ever thus.
So who is going to bail your generation out then?
Because on one hand there is baying for pensioners to be punished for relying on the state pension, yet on the other you are excusing younger people for not making any of their own arrangements.

Wrong. Look at the economic data which shows an enormous drop in living standards. Young people aren’t just poorer because they are younger. They are poorer than their parents were on average at the same age, and will continue to be so throughout their lives unless our economic policies change so that there is investment in productive areas of the economy to generate growth (without yet more taxes defeating any prospect of achieving this objective), and therefore living standards can start to rise again and there will be a much-needed period of real-terms salary increases after two decades of barely any change at all, which is unprecedented in recorded economic history, as is each generation now being poorer than the one before it at the same age. The “cake” needs to grow. Nothing else will fix the problem. Trying to divide up the crumbs into ever smaller portions to be shared out will not help remotely, nor will creating false scapegoats <insert the EU, asylum seekers, disabled children or adults etc. depending on the news articles published at age 8 reading level in the current week>, none of whom have any impact of significance on the UK’s economic prospects or fiscal position in terms of magnitude compared to the issues I posted about yesterday).

We need growth and rising productivity. The reasons why this isn’t happening are clear. There are solutions that could be implemented to address them. If we do then everyone’s living standards can start to rise again. If we don’t then the decline will continue.

BIossomtoes · 26/05/2026 15:25

Why should people substantially poorer than these pensioners be being hammered with the highest tax rates in peacetime in history

The standard basic rate of income tax was 41.25% the year I started work with NI on top. Just the taxation element was more than higher earners currently pay.

I very politely asked you what the evidence is that boomers have a lifetime deficit of £200k and millennials have a £300k surplus but you ignored me. Would you do me the kindness of providing that evidence, please?

DrRylandGrace · 26/05/2026 15:15

NorthXNorthWest · 26/05/2026 15:04

Don't both to respond. You answer is as predicted.

Also you:

DrRylandGrace · 24/05/2026 20:50 Papyrophile What has been notable is that despite the multiple personal attacks that have taken place (not directed at @Papyrophile , just to be clear, because that was the last comment I responded to I’m sure some are so hard of thinking they’d assume I was referring to this poster and I am not, as her comment was perfectly reasonable I just don’t understand the relevance to what I’d said so have queried this, but this was not a personal attack from her at all) NOT ONE of the posters making the personal attacks calling me “psychotic” or “spiteful” or whatever else has actually bothered to respond at all to my post earlier this afternoon at 13:40 (a detailed explanation of what steps I’d take most immediately to address the UK’s economic issues, as was demanded) let alone put forward an alternative explaining how they’d fix the problems in the UK economy and put forward an alternative prospectus of economic policies that they believe would mean that productivity and living standards would rise.

It seems that there is little interest at all in even discussing proposed solutions, only insulting and disparaging people even if they are complete strangers on the internet and making up things to try to discredit them: no engagement whatsoever with any kind of economic discussion about ways to improve things. Very depressing, and precisely why the UK economy is screwed.

Stunning.

For all the wrong reasons.

We are not being screwed by who you think we are. I think the irony and lack of self-awareness on display throughout parts of this thread speaks for itself on that one...

A bit of projection going on here.

Did you put forward any proposed solutions of your own? Perhaps I missed your alternative suggestion of economic policies and explanation of why these would be more effective than those I suggested… perhaps it got lost amongst your reams of personal insults directed at me and you could highlight it for us all, as I’ve looked again and I still can’t see any constructive policy proposals from you.

DrRylandGrace · 26/05/2026 15:13

BIossomtoes · 25/05/2026 12:30

https://www.retirementlivingstandards.org.uk/

There are some figures here.

And these are stated after tax and housing costs. What is apparent is that a very large proportion of families with children have nowhere near these levels of income, so there is a legitimate discussion to be had about why we are handing out welfare to people whose private income/ wealth enables them to exceed even the very generous “comfortable” income stated in this study, when many families who don’t even have the basic or moderate level are not getting anything like £1000 per month of welfare (and don’t forget that the £1000 excludes any additional top ups with winter fuel allowance, social care costs that the state covers, prescriptions, bus passes, pension credit, housing costs, attendance allowance etc…).

This is why the most sensible approach is to means test the state pension, given the state pension welfare dwarfs all other parts of the welfare budget and is rising as a proportion of the welfare expense every year. If it was means-tested to taper away to zero at the “comfortable” retirement level per the PLSA standards you linked to (i.e. £43,900 AFTER tax and housing costs for an individual, or £60,600 for a couple) then this would create zero poverty for pensioners, obviously, and save the state £80-90bn per year which is desperately needed to be invested in chronically underfunded areas of the economy which are actually productive and therefore require investment for there to be any hope of living standards rising (education, infrastructure, etc, per my earlier posts). This could be transformative for future generations.

I can’t see what the rational or moral argument against this proposal is, and none has been put forward on this thread or others on the same topic. Why should people substantially poorer than these pensioners be being hammered with the highest tax rates in peacetime in history to pay non-means tested welfare to the wealthy pensioners who have absolutely no need of it (and haven’t paid anywhere near enough tax as a cohort to fund this)?

This is a direct transfer of wealth from families to the elderly, who are already on average the richest cohort in society. Obviously there is disparity in the wealth in that group and some do genuinely need the state pension, but why should we keep paying it to those who don’t?

As stated previously, obviously at the same time you have to make pension saving mandatory with no opt out so that even more people can’t just decide not to bother to save to avoid the means testing and force their children and grandchildren to pick up the tab. Australia has operated a perfectly sensible system for decades which is similar to what I’ve been suggesting, which they used to replace their old system (which was based on ours!) when it became obvious decades ago that the old system wouldn’t be sustainable due to demographic changes. I’m not sure why people think this is impossible to implement in the UK when other countries such as Australia have done so successfully.

It is an inescapable fact that state pensions are by FAR the most wasteful area of public spending when everything else has been cut to the bone, with the resulting negative outcomes with falling living standards. It’s inexplicable that anybody would still be asserting that this huge imbalance in public spending should continue without providing any rational or moral justification for handing out this enormous amount of welfare to people who don’t require it. It all seems to be based on an entitled view that amounts to “I want it and thought I’d get it (even though it’s always been clear that, as with any welfare, the eligibility criteria can change at any point) so I should have it even if the country can’t afford it and it will mean no prospect of growth or prosperity for my children or grandchildren”.

That’s simply not a defensible position nor one that any reasonable person would try to defend.

NorthXNorthWest · 26/05/2026 15:04

DrRylandGrace · 26/05/2026 14:39

I may respond in more detail later but I’m not sure I’m inclined to invest any more of my time in this. Around 50% of your response is either retstating things that I’ve already stated myself or things which are blindingly obvious so were not worth mentioning at all. The question I was asked which was “what measures could be taken to fix the UK economy?” not whether any Government will actually do it (they won’t) or that the electorate would vote for it (they won’t): that’s why things are such a mess. Much of what you wrote is not relevant to the specific question that my post was answering.

The other 50% of your response seems to consist of yet more tiresome personal comments about me and that you don’t like my writing style etc. rather than being about the economic issues, so is not relevant to the thread or my comment to which you responded and, therefore, yet again lowers the tone of the debate. This makes me far less inclined to spend my time later writing a detailed response later because you are attempting once again to turn a discussion about economics into an excuse to make personal comments to someone that you don’t even know.

I didn’t ask for your opinion on my personality and I have tolerated quite enough personal insults on this thread already (not to mention that it is immensely hypocritical for you to criticise me for describing bluntly the level of ignorance and stupidity from a large proportion of our politicians and electorate while simultaneously writing a post to me that is incredibly patronising given I’ve already stated the profession in which I’ve been working for over two decades; repeating things I’ve already stated myself as though you are teaching me this information (!); and phrasing your comments similarly to how one would talk if trying to explain these issues to child in early primary school).

Play the ball, not the (wo)man. It’s really sad that this is the level of discourse that people engage in on serious topics.

Don't both to respond. You answer is as predicted.

Also you:

DrRylandGrace · 24/05/2026 20:50 Papyrophile What has been notable is that despite the multiple personal attacks that have taken place (not directed at @Papyrophile , just to be clear, because that was the last comment I responded to I’m sure some are so hard of thinking they’d assume I was referring to this poster and I am not, as her comment was perfectly reasonable I just don’t understand the relevance to what I’d said so have queried this, but this was not a personal attack from her at all) NOT ONE of the posters making the personal attacks calling me “psychotic” or “spiteful” or whatever else has actually bothered to respond at all to my post earlier this afternoon at 13:40 (a detailed explanation of what steps I’d take most immediately to address the UK’s economic issues, as was demanded) let alone put forward an alternative explaining how they’d fix the problems in the UK economy and put forward an alternative prospectus of economic policies that they believe would mean that productivity and living standards would rise.

It seems that there is little interest at all in even discussing proposed solutions, only insulting and disparaging people even if they are complete strangers on the internet and making up things to try to discredit them: no engagement whatsoever with any kind of economic discussion about ways to improve things. Very depressing, and precisely why the UK economy is screwed.

Stunning.

For all the wrong reasons.

We are not being screwed by who you think we are. I think the irony and lack of self-awareness on display throughout parts of this thread speaks for itself on that one...

DrRylandGrace · 26/05/2026 14:39

NorthXNorthWest · 25/05/2026 21:45

Warning! Long because I don't really have anything else to add after this.

Your posts raise some legitimate issues around demographics, productivity, pension sustainability, infrastructure, incentives and the long-term fiscal pressures facing the UK. I do not doubt that most serious economists would accept that the UK faces genuine structural economic problems which cannot simply be ignored.

Where I think the discussion starts to fall apart is when quite absolutist economic opinions are presented as though they are basically unquestionable mathematical facts. Economics is not mathematics or physics. There are multiple schools of thought, different assumptions, behavioural responses and political trade-offs. As the joke goes - put 10 economists in a room and you’ll get 11 opinions.

That is why statements like:
– “mathematically there is no other option”
– “the maths simply doesn’t provide any other possible outcome”
– “it will happen regardless”
– “anybody who understands basic maths can see…”
fall short, especially when compared with the nuance and uncertainty that serious economic analysis often involves.
You also repeatedly imply that disagreement can only really come from ignorance. I would refer you back to the old joke about 10 economists in a room. Economics is full of competing theories, imperfect information, political trade-offs and debates about incentives, behaviour and risk.

There are lots of possible responses to long-term fiscal pressure:
– productivity and growth reforms
– industrial strategy
– infrastructure investment
– immigration and labour market reform
– healthcare reform
– pension reform
– retirement age changes
– tax reform
– housing and planning reform
– borrowing
– mixed public/private approaches.
They all present different cost/benefit trade-offs. Reasonable people can disagree about those trade-offs without dismissing each other as incapable of “big picture thinking”.

You also double down in some of your replies in a manner that undermines your credibility and your arguments. There is a difference between arguing strongly and repeatedly implying that disagreement mainly reflects ignorance or stupidity.
Comments like:

“economically illiterate electorate”
“mathematical illiterates”
“my primary school children understand this”
“people refuse to accept economic reality”
“grabby and entitled people”
“self-righteous retirees”
“people have no grasp of basic maths”

It is a debate, not a mental wrestling match where the aim is to shame opponents into silence or submission. I have been guilty of this myself and am trying to do better.
Have you considered that people may disagree because they have legitimate concerns? They may:

– question the assumptions
– disagree with the weighting of causes
– distrust how reforms would actually be implemented
– support universal systems because they believe they are the right thing to do
– or think behavioural and social consequences matter more than you do.
That is not the same thing as being incapable of understanding economics or believing the current situation can continue indefinitely.
To be fair, some of your proposals are entirely reasonable. They are also things that many people you have levelled your disdain toward have already discussed themselves:

– infrastructure investment
– industrial strategy
– vocational training and education reform
– childcare provision
– reducing tax cliff edges
– preventative healthcare
– improving productivity and incentives.
They are all legitimate policy discussions. It’s that pesky word again: “discussion”.

But even there, I think your A+B=C approach understates how difficult implementation is in reality. A lot of the argument seems to assume that:
– savings from pension reform would actually be redirected into productive investment
– governments would maintain disciplined long-term strategies
– behavioural responses would remain manageable
– and means-testing would not fundamentally damage trust in the pension and savings system itself.

Those are pretty huge assumptions, not mathematical certainties.
And this is where I think the contribution-based side matters more than you are prepared to acknowledge. The creation of the post-war welfare state was not originally framed as charity.

Beveridge himself wrote:
“Benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire.”

and my particular favourite,

“The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.”

That distinction matters politically and psychologically because many people do not see the state pension as simply “free money”, but as part of a reciprocal social contract tied to decades of National Insurance contributions and deferred entitlement. That does not mean reform should never happen. But it does help explain why people react strongly to aggressive means-testing proposals. Many see it not just as fiscal reform, but as weakening the contribution principle and changing the rules after people have spent decades planning around them.

I also think there is a broader behavioural issue here that your analysis and proposed solutions miss. If people increasingly feel that:

– prudent saving will simply reduce future support or be used by the government as an extension of the public purse
– pension rules will continually change
– asset accumulation will be penalised
– long-term planning is unreliable
– or security in retirement is becoming increasingly uncertain

then people will naturally change their behaviour accordingly. There are always unintended consequences. Look at what happened when it was suggested that the tax-free portion of pensions could be reduced. There was an uptick in people taking their tax-free lump sums. Many people use that money to clear remaining mortgages or stabilise their retirement finances, not simply for luxury spending.

Or take the Renters’ Rights Bill. Regardless of what people think about smaller landlords, many were still providing additional homes for the rental market. Large numbers exiting the market was hardly ideal. Reducing supply while demand remains high simply creates further pressure and instability elsewhere in the system.

What will be the intended and unintended consequences of the mansion tax or AB’s potential land value taxes? Many homeowners are asset-rich on paper but cash-poor in reality. People often say they can simply downsize, but downsize into what exactly? There aren’t enough homes, let alone enough of the right type of homes in the right locations. Yes, freeing up larger family homes may help a few buyers. But there is uncertainty at the moment, so many people will delay big purchases. A quick look at the market will tell you many of those homes are already languishing. The people downsizing then move into two or three-bedroom homes and start competing with first-time buyers, younger families and other downsizers in an already constrained market. If there are still not enough homes overall (and it will take years to deliver them), pressure does not disappear, it simply shifts elsewhere within the system.

Governments have not been entirely honest, upfront or consistent when it comes to tax policy, incentives and market intervention. So I think you overstate the level of trust many people still have in them, particularly those who have spent decades trying to build stability and independence for later life. Not just people, but businesses too. How many firms have chosen not to expand because of rising tax burdens, higher employer NI, business rates, wage pressures and difficult trading conditions all arriving at once? Businesses that feel unable to plan with confidence often become more cautious, and that is not generally good for investment, productivity or growth.

So we end up with:
– lower saving
– lower investment
– reduced trust in institutions
– reduced entrepreneurial risk-taking
– lower workforce participation
– or even moving assets and talent elsewhere.

Those are entirely predictable first and second-order economic effects. You mentioned cliff edges yourself. What is the incentive to move beyond them if people can end up worse off overall through a combination of taxation and/or withdrawal of support? That is a perfect example of behaviour adapting, but not necessarily in a way that benefits the wider economy.

You also clearly place a lot of emphasis on pensions and demographics, but I do not think the UK’s problems can really be reduced mainly to retirees or welfare costs.

There are also major structural issues:
– weak productivity growth
– underinvestment
– housing shortages
– planning failures
– unstable industrial policy
– infrastructure weakness
– declining investment confidence
– Brexit-related trade frictions
– and decades of political short-termism, with taxpayers often ultimately carrying the cost.

Add in the broader issue of the UK making money increasingly through debt, owning assets and/or moving money around rather than through productive work, innovation, infrastructure and long-term investment and you have the perfect storm. Property becoming treated primarily as an asset class rather than somewhere to live is probably one of the clearest examples of that in the UK economy. That was driven far more by decades of policy, finance-led growth and structural incentives than by ordinary pensioners.

Who got the dividends and who is picking up the cost for the water companies? Because I also think there are valid questions around relying so heavily on partnerships and investment structures focused primarily on maximising short and medium-term investor returns, often using complex tax “efficient” structures that can move large portions of profits out of the country rather than supporting long-term productive investment and sustainable economic growth. It goes without saying that investment is essential, but fiduciary responsibility matters too, because incentives and time horizons are important. If large parts of the system increasingly reward:

– asset extraction
– short-term returns
– leveraged gains
– complex tax efficiency structures
– and investment models built around relatively short 3–5 year exit windows

then where is the incentive for genuinely patient long-term investment?
Shareholders and PE are not necessarily the saviours many people present them as.
Where are the investors willing to:
– build productive capacity over decades
– invest through weaker periods
– prioritise long-term infrastructure
– support innovation with uncertain payoffs
– or accept slower returns in exchange for a stronger and more stable economy over the longer term?

I am concerned about how reliant the UK has become on international capital and external investors in ways that can benefit the country in the short term, but allow a large proportion of the longer-term profits, dividends and returns to ultimately flow back out of the country again. Like I said foreign investment is not inherently bad and obviously the UK benefits from external capital, jobs and investment. But if too much of the economy becomes structured around short-term capital flows, asset inflation and extracting returns rather than building long-term productive capacity, resilience and domestic investment, then that can create long-term structural weaknesses of its own as well.

And while comparisons with countries like Australia are interesting, systems cannot always be transplanted neatly between countries with very different:
– demographics
– resource wealth
– pension structures
– housing markets
– immigration patterns
– and institutional histories.
Australia also benefits from a very different resource base and economic structure to the UK.

You clearly more informed in some areas than than many posters and some of the structural concerns you raise are perfectly valid. But you don't have to be an economist to understand incentives, behavioural responses or the importance of trust in institutions. Nor should economic literacy become an excuse for hostility toward people who disagree with you.

I find my own views challenged and adjusted regularly through discussions. Some core beliefs will stay the same, such as believing a civilised society should have a social security system, but other views evolve over time as I am exposed to different viewpoints and research different subjects.

Your points comes across as dictatorial, dismissive and at times openly contemptuous toward people who disagree with you. Ironically, given how economically literate you clearly are, that feels like a missed opportunity to genuinely educate people or challenge their thought processes rather than alienating or trying to shame them.

People are far more receptive to an economist analysing trade-offs than to a politician defending an ideological position.

I may respond in more detail later but I’m not sure I’m inclined to invest any more of my time in this. Around 50% of your response is either retstating things that I’ve already stated myself or things which are blindingly obvious so were not worth mentioning at all. The question I was asked which was “what measures could be taken to fix the UK economy?” not whether any Government will actually do it (they won’t) or that the electorate would vote for it (they won’t): that’s why things are such a mess. Much of what you wrote is not relevant to the specific question that my post was answering.

The other 50% of your response seems to consist of yet more tiresome personal comments about me and that you don’t like my writing style etc. rather than being about the economic issues, so is not relevant to the thread or my comment to which you responded and, therefore, yet again lowers the tone of the debate. This makes me far less inclined to spend my time later writing a detailed response later because you are attempting once again to turn a discussion about economics into an excuse to make personal comments to someone that you don’t even know.

I didn’t ask for your opinion on my personality and I have tolerated quite enough personal insults on this thread already (not to mention that it is immensely hypocritical for you to criticise me for describing bluntly the level of ignorance and stupidity from a large proportion of our politicians and electorate while simultaneously writing a post to me that is incredibly patronising given I’ve already stated the profession in which I’ve been working for over two decades; repeating things I’ve already stated myself as though you are teaching me this information (!); and phrasing your comments similarly to how one would talk if trying to explain these issues to child in early primary school).

Play the ball, not the (wo)man. It’s really sad that this is the level of discourse that people engage in on serious topics.

Nemorth · 26/05/2026 12:00

OneShyQuail · 26/05/2026 07:39

Its £300 per year, so split over bday and xmas, and this is the first time ive ever been able to save for a holiday....so you haven't done an "expensive holiday in years" we never have.....

I save for emergencys, I save for the kids (driving and house deposit) have done for years. There's been nothing left previously as a single parent. Its only now I have a partner we are in a position to go away....

People are reading my post like weve holidayed for years.... we haven't 🤷‍♀️

the post I quoted first quite clearly said £300 per child for Christmas. No mention of birthdays. That developed later (I saw it come in).

NorthXNorthWest · 26/05/2026 11:50

Papyrophile · 26/05/2026 08:35

Catching up on last night's contributions. Big thanks to everyone for their carefully worded and constructive thoughts, and for the insights into other people's lives. We're running out of thread here, but I wish we could forward this to every politician and civil servant in a senior role.

I wish I had the confidence that it would make a difference to politicians and civil servants reading this. I am all out of trust.

ruethewhirl · 26/05/2026 11:24

BIossomtoes · 26/05/2026 11:17

Repossessions were so common in the late 80s/early 90s that I had to tell the estate agent I didn’t want to view any. They were incredulous that I didn’t want to benefit from someone else’s misfortune.

OMG absolutely. I moved to an expensive part of the country in the early 90s for a job, and I remember how distastefully some people would crow over their gain at someone else's expense. 'Oh, thank you, it is rather nice isn't it, it's a repo,' etc... Just ugh. I wouldn't have wanted to buy one either.

BIossomtoes · 26/05/2026 11:17

Repossessions were so common in the late 80s/early 90s that I had to tell the estate agent I didn’t want to view any. They were incredulous that I didn’t want to benefit from someone else’s misfortune.

crossedlines · 26/05/2026 10:45

yeah I know the 15% wasn’t for too long, but it was long enough for us to almost hand the keys back to the building society! And for many many repossessions. The average over the last 50 years is of course skewed by the exceptionally low rates over the last 20 odd years. If you look at the period of years these so called ‘lucky’ ‘boomers’ were buying a house, you can see how screwed we were. But of course if people are determined to just go with the rhetoric that boomers are just all-out lucky and ungrateful with it, then facts won’t get in the way of that mindset!

like many ‘boomers’, I have adult children: I know exactly the particular hardships their generation face and I desperately want solutions to the housing crisis - and for the govt to stop pretending that half of young people should be in university. I push for change through petitioning and the voting system. Just like I pushed for change to the bloody awful maternity rights (12 weeks paid leave!) and paternity rights (non existent!) and subsidised childcare (non existent!) which I lived through . And the changes to those are some of the very big advantages which my children and the younger generations benefit from.

I recognise that there are advantages and disadvantages for every generation. But people who boringly bash any specific generation really just want to whinge.

BIossomtoes · 26/05/2026 10:28

Badbadbunny · 26/05/2026 10:18

15% was a very short term anomaly. Historically rates were far lower than that most of the time. Mortgage rates were only 15% or more for only 9 months, so using that is a bit of a red herring.

Average mortgage rates over the past 50 years was around 7.5%.

But even for a short time, 15% of a much smaller mortgage can be less than say 5% on a much higher mortgage when wages havn't increased at the same rate as house prices.

https://www.economicshelp.org/blog/1485/interest-rates/historical-real-interest-rate/

inflation-interest-rates-dec-25

Historical Interest Rates UK - Economics Help

Historical Interest Rates since 1800. Graphs and data to show historical trends with focus on recent decades. Also historical inflation and the impact on real interest rates.

https://www.economicshelp.org/blog/1485/interest-rates/historical-real-interest-rate/

Badbadbunny · 26/05/2026 10:18

15% was a very short term anomaly. Historically rates were far lower than that most of the time. Mortgage rates were only 15% or more for only 9 months, so using that is a bit of a red herring.

Average mortgage rates over the past 50 years was around 7.5%.

But even for a short time, 15% of a much smaller mortgage can be less than say 5% on a much higher mortgage when wages havn't increased at the same rate as house prices.

crossedlines · 26/05/2026 10:01

One of our dc’s is in that position: eventually managed to buy and now spending less on the mortgage than they did on their rent! And yes the cost of the property was a lot more than the property dh and I bought back in the 80s, but the proportion of their wage which pays the mortgage each month is much lower than the proportion we paid. And that was before interest rates shot up really high to 15%. Sometimes people forget (or weren’t adults back then so wouldn’t have known!) that mortgage interest rates were consistently a lot higher than they are now.

crossedlines · 26/05/2026 09:56

Once people do get on the housing ladder though, mortgage interest rates are still incredibly low compared to a few decades ago. There need to be far more schemes to help young people who are trapped and can’t save a deposit due to paying rent: the irony is once they’re paying a mortgage is often less than their rent was. 100% mortgages, housing association schemes etc needed

Badbadbunny · 26/05/2026 09:41

ThreadGuardDog · 25/05/2026 20:55

And as I said upthread. Everything is relative. Housing may have been cheaper than it is now, but wages were nowhere near what they are currently. My son and his wife are ‘saving’ for the deposit on a flat. Constantly moaning that it’s hard but they both think nothing of spending over £5 each on coffee every morning on the way to work or ordering eye wateringly expensive take aways every week. In the meantime they’re living with DH and I at minimal cost to enable them to save more. Wasn’t the norm when I was their age.

House prices have risen far faster that wages over the past 25 years.

Currently the average house price is almost 8 times average wage.

In 2000 it was around 4 times the average wage.

So average house prices relative to average wages have doubled over 25 years.

crossedlines · 26/05/2026 08:38

Ok, so in terms of the people who could afford to put something into a pension, there is a serious issue about many people not fully understanding how pensions work and how important it is to look ahead to when you’ll want that money.

It’s an issue which disproportionately affects women massively; the figures show a far greater proportion of women than men have inadequate financial provision for their older age.

I’m not talking about affordability but about misconceptions and lack of planning. In my line of work there is an excellent pension scheme but I have colleagues who’ve opted out. I know another woman, a friend, who tells me it’s ok not to have a pension because her dh has a really good work pension so they’ll live on that after retirement and if he dies first, it’ll come to her. She honestly had no clue that she will just get a fraction of it. And these are intelligent, capable women, so I can quite believe that there are tens of thousands of people out there with very little idea.

Not sure what the answer is…. I mean; auto enrolment is obviously a good thing, but how to educate people more effectively about how a pension works? Helping people see the long term impact of not making contributions. Understanding that part time work = part time pension. It was sobering to me that even just a short number of years working 3 days a week has knocked quite a chunk off my pension. I don’t regret that as this was when my babies were small, and returning to work with a 12 week old was tough- so 3 days was the solution. But I’m hugely relieved that I stepped back up to full time soon and went for promotions : with a pension based on salary and years of service, it really motivated me to go for promotions when I could, rather than remain in a lower paid role.

Somehow, the message needs to be got out there to people who could afford to put money into a pension but aren’t. I know there is a lot of excellent info on various websites, but I imagine the people who delve into that are probably the people who already have a fairly good understanding of the importance. It’s how to reach people who don’t really know much or perhaps have misconceptions.

Papyrophile · 26/05/2026 08:35

Catching up on last night's contributions. Big thanks to everyone for their carefully worded and constructive thoughts, and for the insights into other people's lives. We're running out of thread here, but I wish we could forward this to every politician and civil servant in a senior role.

OneShyQuail · 26/05/2026 07:39

Nemorth · 25/05/2026 20:48

I only spend £150 per DC at Christmas. We’ve not had an “expensive” holiday for 3 years. I class anything over £2,000 as expensive and there are 4 of us.

I do save £20 per month per DC into a pension for them.

Same sorts of figures of a couple of things (not the bigger picture I realise!) but different choices made.

You probably think£300 per child at Christmas isn’t much, whereas I think it’s LOADS!

Its £300 per year, so split over bday and xmas, and this is the first time ive ever been able to save for a holiday....so you haven't done an "expensive holiday in years" we never have.....

I save for emergencys, I save for the kids (driving and house deposit) have done for years. There's been nothing left previously as a single parent. Its only now I have a partner we are in a position to go away....

People are reading my post like weve holidayed for years.... we haven't 🤷‍♀️

ruethewhirl · 25/05/2026 23:15

Bsfff · 25/05/2026 20:45

And why is/was that?

Well, I wasn't squandering my money, if that's what you're getting at. It may be news to you, but lots of people don't earn much when they are first starting out in adult life and it's all they can do to cover the bills and food until later in their careers when they're earning more. That was the case for me.

But to be honest, looking at how you've been posting on this thread, I'm not buying your faux astonishment over this. I think you're just out to be goady, but if you're not and you're genuinely 'baffled', maybe you need to check your damn privilege.

crossedlines · 25/05/2026 22:15

NorthXNorthWest · 25/05/2026 21:45

Warning! Long because I don't really have anything else to add after this.

Your posts raise some legitimate issues around demographics, productivity, pension sustainability, infrastructure, incentives and the long-term fiscal pressures facing the UK. I do not doubt that most serious economists would accept that the UK faces genuine structural economic problems which cannot simply be ignored.

Where I think the discussion starts to fall apart is when quite absolutist economic opinions are presented as though they are basically unquestionable mathematical facts. Economics is not mathematics or physics. There are multiple schools of thought, different assumptions, behavioural responses and political trade-offs. As the joke goes - put 10 economists in a room and you’ll get 11 opinions.

That is why statements like:
– “mathematically there is no other option”
– “the maths simply doesn’t provide any other possible outcome”
– “it will happen regardless”
– “anybody who understands basic maths can see…”
fall short, especially when compared with the nuance and uncertainty that serious economic analysis often involves.
You also repeatedly imply that disagreement can only really come from ignorance. I would refer you back to the old joke about 10 economists in a room. Economics is full of competing theories, imperfect information, political trade-offs and debates about incentives, behaviour and risk.

There are lots of possible responses to long-term fiscal pressure:
– productivity and growth reforms
– industrial strategy
– infrastructure investment
– immigration and labour market reform
– healthcare reform
– pension reform
– retirement age changes
– tax reform
– housing and planning reform
– borrowing
– mixed public/private approaches.
They all present different cost/benefit trade-offs. Reasonable people can disagree about those trade-offs without dismissing each other as incapable of “big picture thinking”.

You also double down in some of your replies in a manner that undermines your credibility and your arguments. There is a difference between arguing strongly and repeatedly implying that disagreement mainly reflects ignorance or stupidity.
Comments like:

“economically illiterate electorate”
“mathematical illiterates”
“my primary school children understand this”
“people refuse to accept economic reality”
“grabby and entitled people”
“self-righteous retirees”
“people have no grasp of basic maths”

It is a debate, not a mental wrestling match where the aim is to shame opponents into silence or submission. I have been guilty of this myself and am trying to do better.
Have you considered that people may disagree because they have legitimate concerns? They may:

– question the assumptions
– disagree with the weighting of causes
– distrust how reforms would actually be implemented
– support universal systems because they believe they are the right thing to do
– or think behavioural and social consequences matter more than you do.
That is not the same thing as being incapable of understanding economics or believing the current situation can continue indefinitely.
To be fair, some of your proposals are entirely reasonable. They are also things that many people you have levelled your disdain toward have already discussed themselves:

– infrastructure investment
– industrial strategy
– vocational training and education reform
– childcare provision
– reducing tax cliff edges
– preventative healthcare
– improving productivity and incentives.
They are all legitimate policy discussions. It’s that pesky word again: “discussion”.

But even there, I think your A+B=C approach understates how difficult implementation is in reality. A lot of the argument seems to assume that:
– savings from pension reform would actually be redirected into productive investment
– governments would maintain disciplined long-term strategies
– behavioural responses would remain manageable
– and means-testing would not fundamentally damage trust in the pension and savings system itself.

Those are pretty huge assumptions, not mathematical certainties.
And this is where I think the contribution-based side matters more than you are prepared to acknowledge. The creation of the post-war welfare state was not originally framed as charity.

Beveridge himself wrote:
“Benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire.”

and my particular favourite,

“The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family.”

That distinction matters politically and psychologically because many people do not see the state pension as simply “free money”, but as part of a reciprocal social contract tied to decades of National Insurance contributions and deferred entitlement. That does not mean reform should never happen. But it does help explain why people react strongly to aggressive means-testing proposals. Many see it not just as fiscal reform, but as weakening the contribution principle and changing the rules after people have spent decades planning around them.

I also think there is a broader behavioural issue here that your analysis and proposed solutions miss. If people increasingly feel that:

– prudent saving will simply reduce future support or be used by the government as an extension of the public purse
– pension rules will continually change
– asset accumulation will be penalised
– long-term planning is unreliable
– or security in retirement is becoming increasingly uncertain

then people will naturally change their behaviour accordingly. There are always unintended consequences. Look at what happened when it was suggested that the tax-free portion of pensions could be reduced. There was an uptick in people taking their tax-free lump sums. Many people use that money to clear remaining mortgages or stabilise their retirement finances, not simply for luxury spending.

Or take the Renters’ Rights Bill. Regardless of what people think about smaller landlords, many were still providing additional homes for the rental market. Large numbers exiting the market was hardly ideal. Reducing supply while demand remains high simply creates further pressure and instability elsewhere in the system.

What will be the intended and unintended consequences of the mansion tax or AB’s potential land value taxes? Many homeowners are asset-rich on paper but cash-poor in reality. People often say they can simply downsize, but downsize into what exactly? There aren’t enough homes, let alone enough of the right type of homes in the right locations. Yes, freeing up larger family homes may help a few buyers. But there is uncertainty at the moment, so many people will delay big purchases. A quick look at the market will tell you many of those homes are already languishing. The people downsizing then move into two or three-bedroom homes and start competing with first-time buyers, younger families and other downsizers in an already constrained market. If there are still not enough homes overall (and it will take years to deliver them), pressure does not disappear, it simply shifts elsewhere within the system.

Governments have not been entirely honest, upfront or consistent when it comes to tax policy, incentives and market intervention. So I think you overstate the level of trust many people still have in them, particularly those who have spent decades trying to build stability and independence for later life. Not just people, but businesses too. How many firms have chosen not to expand because of rising tax burdens, higher employer NI, business rates, wage pressures and difficult trading conditions all arriving at once? Businesses that feel unable to plan with confidence often become more cautious, and that is not generally good for investment, productivity or growth.

So we end up with:
– lower saving
– lower investment
– reduced trust in institutions
– reduced entrepreneurial risk-taking
– lower workforce participation
– or even moving assets and talent elsewhere.

Those are entirely predictable first and second-order economic effects. You mentioned cliff edges yourself. What is the incentive to move beyond them if people can end up worse off overall through a combination of taxation and/or withdrawal of support? That is a perfect example of behaviour adapting, but not necessarily in a way that benefits the wider economy.

You also clearly place a lot of emphasis on pensions and demographics, but I do not think the UK’s problems can really be reduced mainly to retirees or welfare costs.

There are also major structural issues:
– weak productivity growth
– underinvestment
– housing shortages
– planning failures
– unstable industrial policy
– infrastructure weakness
– declining investment confidence
– Brexit-related trade frictions
– and decades of political short-termism, with taxpayers often ultimately carrying the cost.

Add in the broader issue of the UK making money increasingly through debt, owning assets and/or moving money around rather than through productive work, innovation, infrastructure and long-term investment and you have the perfect storm. Property becoming treated primarily as an asset class rather than somewhere to live is probably one of the clearest examples of that in the UK economy. That was driven far more by decades of policy, finance-led growth and structural incentives than by ordinary pensioners.

Who got the dividends and who is picking up the cost for the water companies? Because I also think there are valid questions around relying so heavily on partnerships and investment structures focused primarily on maximising short and medium-term investor returns, often using complex tax “efficient” structures that can move large portions of profits out of the country rather than supporting long-term productive investment and sustainable economic growth. It goes without saying that investment is essential, but fiduciary responsibility matters too, because incentives and time horizons are important. If large parts of the system increasingly reward:

– asset extraction
– short-term returns
– leveraged gains
– complex tax efficiency structures
– and investment models built around relatively short 3–5 year exit windows

then where is the incentive for genuinely patient long-term investment?
Shareholders and PE are not necessarily the saviours many people present them as.
Where are the investors willing to:
– build productive capacity over decades
– invest through weaker periods
– prioritise long-term infrastructure
– support innovation with uncertain payoffs
– or accept slower returns in exchange for a stronger and more stable economy over the longer term?

I am concerned about how reliant the UK has become on international capital and external investors in ways that can benefit the country in the short term, but allow a large proportion of the longer-term profits, dividends and returns to ultimately flow back out of the country again. Like I said foreign investment is not inherently bad and obviously the UK benefits from external capital, jobs and investment. But if too much of the economy becomes structured around short-term capital flows, asset inflation and extracting returns rather than building long-term productive capacity, resilience and domestic investment, then that can create long-term structural weaknesses of its own as well.

And while comparisons with countries like Australia are interesting, systems cannot always be transplanted neatly between countries with very different:
– demographics
– resource wealth
– pension structures
– housing markets
– immigration patterns
– and institutional histories.
Australia also benefits from a very different resource base and economic structure to the UK.

You clearly more informed in some areas than than many posters and some of the structural concerns you raise are perfectly valid. But you don't have to be an economist to understand incentives, behavioural responses or the importance of trust in institutions. Nor should economic literacy become an excuse for hostility toward people who disagree with you.

I find my own views challenged and adjusted regularly through discussions. Some core beliefs will stay the same, such as believing a civilised society should have a social security system, but other views evolve over time as I am exposed to different viewpoints and research different subjects.

Your points comes across as dictatorial, dismissive and at times openly contemptuous toward people who disagree with you. Ironically, given how economically literate you clearly are, that feels like a missed opportunity to genuinely educate people or challenge their thought processes rather than alienating or trying to shame them.

People are far more receptive to an economist analysing trade-offs than to a politician defending an ideological position.

A lot of sense here

Lopella · 25/05/2026 22:11

jumpingjohnny · 25/05/2026 22:09

If you need 2 jobs to survive, as in just essentials, nothing else to cut back on, then you are either:
A) entitled to UC, in which case paying some pre-tax salary into a pension would increase your UC payments.
Or
B) massively overstretching yourself, really bad with money and you need to get in touch with step change or similar.

Edited

😂😂😂😂😂😂😂😂😂

jumpingjohnny · 25/05/2026 22:09

Lopella · 25/05/2026 22:04

Already work 2 jobs

If you need 2 jobs to survive, as in just essentials, nothing else to cut back on, then you are either:
A) entitled to UC, in which case paying some pre-tax salary into a pension would increase your UC payments.
Or
B) massively overstretching yourself, really bad with money and you need to get in touch with step change or similar.

Lopella · 25/05/2026 22:04

crossedlines · 25/05/2026 21:38

Can you take on extra evening/ weekend work? Even if it’s a temporary thing to tide through the most expensive time. That’s what dh and I did back in the late 80s/ early 90s when mortgage rates went through the roof and childcare had no subsidies. We were both working in professisonal roles but there just wasn’t enough money coming in to cover everything. Taking on extra work was very tough but we did that rather than opt out of the pension scheme and goodness I’m glad we did.

Already work 2 jobs