Can’t believe how much money my parents have amassed

[Tallular819]

My parents started out with nothing, not a penny from their families. My mum was a dinner lady, Dad was a secondary school teacher.

They paid off their mortgage in their 40s. As children we had a holiday abroad every year and multiple uk holidays throughout the year.

They had a lease car which would be replaced every 3 years with a new one.

They paid for mine and my sisters weddings and house deposits.

They’ve travelled all over the world in their retirement and I’ve just found out they have £200k in savings.

WTF?! DH and I have comparable careers, we run 1 old banger of a car, we have 1 uk holiday per year, we’ve stopped at 1 child, we’re on target to pay off our mortgage when we reach retirement, we have a grand total of £4k in savings. We don’t drink, don’t smoke, don’t buy expensive clothes.

Its just hit me how vastly different our financial situations are. I didn’t appreciate just how different the cost of living is today compared to 40 years ago.

Compared with housing costs, all that is trivial.

Nail on the head but it’s easy lazy thinking rather than looking at the facts!

You write Also they paid lower taxes as there were many more workers supporting lower social and pension spending @Putneydad25 but it isn't accurate. When a person born in 1956 began work in the 1970s, income tax was 33% and NI cost another 9%, so over 40% of your earnings were deducted from the first quid you earned. There was no tax free band.

Now basic income tax is only 20% after £12,570 -- up to nearly £50k. The problem is that low-paid people don't pay equivalent rates of tax as people in most of Europe (where public provision is more generous). Plus then, the lower-paid get UC to top up PT work: this is effectively a subsidy for large employers to dodge the costs of sick pay and pension contributions by keeping hours under 18 per week.

My Dad, were he alive now, would be 87. He served for over a decade, leaving in the late
60s, early 70s. There was NO army pension then, zip, nadda, nothing, if you left before the normal pension age for the scheme. It wasn’t just the army this scenario occurred in. Plus contributions if paid in, were not refundable either. This changed mid 70s. I mention this as just one example of how life wasn’t as rosy back then as is portrayed. Details like this get forgotten.

Also, this idea that houses were so cheap in the 70’s any Tom, Dick or Harry could pick one up… affordability aside, mortgages were much harder to come by; very limited numbers given out, lots of criteria to qualify. This in turn limited demand which means prices aren’t driven up. Throw in bigger stocks of council houses, and the market for private houses was smaller; demand is less, prices are lower.

The other difference is that a house in the early 70s was a different proposition. If it was a new build, it probably wasn’t completely finished off; no central heating, no drive or lawn, chicken wire fence. If it were already lived in, again, probably in need of upgrading. Possibly no inside bathroom. Lean to kitchen. No double glazing. No insulation. No central heating. No wrap around extension with bifold doors opening to the garden. Now I know that there are legions of people who would kill to find a house like that now but I’m just making the point that standards and expectations have changed and that drives prices up too.

Wow - but retiring in your 40s wasn't common at all, though. What did they do for a living to allow that??!

Yes, it's the holy cow in the UK, isn't it - none of the parties dare suggest that everyone should be paying higher taxes, not just middle and high earners.

The tax burden for up to £50k is one of the lowest around. Then people complain that other parts of Europe have a better social support system - of course they do, they pay more tax!! People can't expect to have a bright, spanking social support system on a US tax level (OK I'm exaggerating here a bit)...

Also, start charging for going to the NHS, a small token sum and with a 'ceiling' for chronic diseases etc. The NHS is one of the largest organisations in THE WORLD. Free healthcare isn't even a thing in most of Europe, even Scandinavia (with exceptions).

My dad was a policeman and he got injured on duty (nothing too bad) he knew how to milk the system to get disability pay and then got his pension early, I don't think you would be able to do it these days, they also moved abroad to a country where everything was a lot cheaper (dragging me there aswell but that's another story!)

Your parents wouldn’t have had sky tv, mobiles, wifi ect. You need to take this into consideration as it all adds up nowadays.

Lol. It adds up to not very much. We could give up every single subscription or connection in our house for 3 years and still barely save enough to make a single mortgage payment. These things are not why younger people are struggling.

That’s great that they have such savings behind them!
And they paid for your wedding and your house deposits !
( I had no such help )
I can see how it’s puzzling though .

Why is it puzzling? Are you really puzzled? Can anyone here help you to figure it out?

My grandmother and grandfather achieved this, but they worked hard and made sacrifices . They lived off my grandfather’s salary and saved my grandmother’s. They saved on the side for the treats they wanted and other than a mortgage they never had debt.

Living on one salary is a luxury not a sacrifice.

Ah, voting right wing. That's why you're skint.

You are focusing on a few elements of income tax, I’m referring to tax as a whole. From the OECD

• Historical Trends:
• Following WWII, the tax-to-GDP ratio fell to a low of 28% in 1960-61, before rising again in the 1970s and falling in the 1980s due to cuts in income tax and a decrease in oil and gas revenue.
• Modern Trends:
• Since the 1990s, the tax burden has risen, reaching a 70-year high of 36% of GDP.

There’s a saying that I think I actually first heard on here, that you can now afford more of what you want but less of what you need. So Netflix, a fancy mobile on contract, hen weekends in Spain, weekend city breaks, takeaways and meals out, a room makeover courtesy of B&M, are affordable whilst a house is not. Of course when this is the case or feels like it is the case, there’s little motivation to forgo that ‘want’ as doing so won’t enable the ‘need’. Of course this is all generalities. Some people obviously can’t afford those things right now so there’s no saving to be had. For some people who are spending, the saving WILL make a difference but they are living their lives in a culture where the ‘wants’ are normalised and it’s hard to see a bigger picture of what difference incremental savings can make.

There was a tax free personal allowance in 1956!

1969/70 was a high tax burden year, but all other years over the past five decades have been less tax burden of GDP than currently. So we ARE suffering some of the highest tax burdens today.

You can't just look at income tax. All the indirect taxes have risen over the decades, some didn't previously exist at all. VAT has over doubled and extended to things that previously weren't chargeable to it! We now have landfill taxes, insurance taxes, air taxes, sugar taxes, etc which have all fuelled inflation! We've basically moved from high direct tax/low indirect tax, to high indirect tax/low income tax. So whilst one tax may have fallen over the decades, plenty of others have risen.

I agree. My parents, b. 1933 to rural working class families, ended up with a very comfortable retirement. Mum did pin money part time jobs, dad was a middle manager in an electronics firm who engineered his own redundancy aged 57, with a £70k payout in 80/81. They owned their own house bought in 1970 for £6k, on dad’s wage, which we sold upon mum’s death 10 years ago for £450k.

In retirement, they came to visit us 8 times in Australia.

My family are fortunate in that we inherited from them (no care home fees), and DH and I got on the housing ladder in Australia where our 2 FT wages could pay off a mortgage in 8 years.

I'm in my early 60s with 2 young adult DC.I believe they will have a considerably less prosperous life than my parents. Their main ‘hope’ is inheriting from DH and me.

My mum worked in an office as an admin clerk, dad a security officer. They died without a penny, and left nothing to their children. , had nothing to leave. There are more people that had nothing than you might think, from the way people talk.

Funny I’ve been thinking if this a lot lately as we were utterly broke over half term , not a penny , overdrawn and c cards maxed out

my parents ( would be in their 80’s) bought a 3 bed family home at 21 in London on only my dads salary as they would not have even asked mums ! similar careers and income to us but had foreign holiday every year where we haven’t had one since the kids were born and retired at 58!!!! I won’t be able to afford that till I’m 68

my kids will not be able to buy a home until we die !

big bug difference in quality of life in just one generation

Exactly. I had a colleague who once said to me "You may want it, but do you actually need it?"

His words always stayed with me.

Beginning to see I am lucky in having parents who were much poorer/ frugal, lived in a tiny house and never went on any foreign holidays. Course I won't be getting an inheritance either.
That's ok though.

Yes, it's true.

However, a lot of the 'luxuries' we talk about today are costing a fraction of what something similar would have cost back in the 1970s/80s.

And if you can't afford to buy and feel rather helpless about being able to do so in the future, perhaps a treat is what you need?

I guess in a sense, today's young don't have a liquidity problem but an issue with hard assets.