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.

Ah what is the matter with people, you see things that aren't even there. She isn't complaining, especially about her parents. Everyone has a right to complain about the way the economy has turned out, how much benefits, wars and immigration have taken a toll, and the huge proportion of our wages we have to sacrifice to tax.

I can live with that.
It’s frustrating when you’re having a conversation with someone who turns out to be lying through their teeth. But that’s the internet for you.

So it is.

One of the issues of intergenerational fairness is that the wealth is concentrated and doesn't spread around. i.e. If you happened to be say a teacher or a bus conductor in the 1960s in London and you bought a house you are now quite possibly a multi millionaire. You may not feel like it and your income may not be that high, but in terms of assets. If you didn't get on the property ladder and were a lifelong renter, you've probably got very little in terms of assets. So those better off older people will bank of mum and dad their children onto the property ladder giving them a better life. Whereas others through no fault other than that of birth, will be excluded from property and so the cycle will repeat. It passes down in families, untaxed (unless you are stupid enough to not give it away before you die). It's just not equitable or meritocratic. Or it is squandered on exotic holidays and cruises, which is beyond the reach of future generations.

Exactly. Inequality will become further entrenched.

Going off the main point but 15% interest rates were massively challenging for many people. There was a repossession crisis and homelessness resulting. It wasn’t the minor issue that you imply. It caused massive affordability problems and damage.

People do spend a bloody fortune on stuff these days though, you only have to read MN for a day to know that. Coffee always out of the home, never meet friends indoors, Botox and fillers, hen weekends, redecorating and refurnishing the home, pets, with pet insurance, new clothes and bags, eating out more than once a year, takeaways and convenience food, the list of things to spend money on now is endless. AND the house / income ratio is bust. Most of the boomers everyone is jealous of would have had the most basic and simple of lifestyles, living absolute bare bones lifestyles when they bought their homes. I didn't have an oven / cooker for several months and it was years before I had anything other than a second hand sofa or TV. No central heating either.

They can't believe their luck now and how far they have come and how much things have changed.

But jealousy is silly, most people now would hate to have lived the early lives of now very comfortable boomers. Who knows what life will be like in 20/30/40 years time, most boomers certainly did not foresee their current comfort (IF they have it), so why get cross about a future situation that may not even occur.

There’s a bit of a tendency to over simplifying the situation when it comes to generational wealth.
Take for instance that both my parents left school and started work at 14. Any further education/courses were done in the evenings and weekends. This puts the retiring in 50’s in a different place to those (me included) who attended University and perhaps beyond, not forgetting any gap years etc too.
PP have made the point life was simpler yes, but therefore harder without the luxury of tumble dryers, dishwashers, robot vacuums, even washing machines in many cases. Tending a house and children was harder physically and more time consuming. Almost all cooking was from scratch and if you wanted ingredients often you walked to get them or grew them.
It’s very difficult to fairly compare in my opinion. I know my parents could afford a house but they never ever ate out, went to the pub, cinema, theatre, gigs. There were no beauty treatments, hairdresser for a cut (females only) but any colour etc was from a bottle at home. No gadgets, small tv was rented for many years and no luxury holidays or clothes.
My interest was piqued by the idea of longer mortgages so I just looked it up and true the overall average UK mortgage is now 30 years and for the average first time buyer 31, however, in the past married couples mostly took out mortgages but now many more are taken out by singles.
Also, it’s worth considering that the relative value of your mortgage repayment reduces both as you hopefully gain promotions and higher wages and due to col/inflation so in theory most people should be able to overpay and shorten the duration as the repayment becomes a smaller percentage of salary.
I do however recognise it is so hard to become a home owner due to insane price hikes so greatly sympathise. It’s just I feel the hardships and day to day struggles of past generations seem to be completely glossed over and underplayed. It’s also a little unfair to not acknowledge how many of these parents give significant amounts of time, energy and money to their offspring.

I do take the point about squandering it on exotic holidays, but actually that’s spreading the love around.
My arsehole parents received generous inheritances from my grandparents who arrived on Boat from Ireland with nothing but the clothes they stood in. But they wanted their children to have any money that they left. Those children have not trickled it down to the grandchildren i.e. Me.
But it is my life’s work to do the same to make sure that my children benefit from my endeavours. That’s all any of us can do.
Top tip massively over insure yourself for life insurance

I’m slightly surprised, but good for them. They’ve made a financial success of life.👍😉

I think the issues people have with their wealth are probably;

1. They didn't earn it by working harder than anyone else, their houses did, they bought cheap and are now sat on a pile because of it.
2. Those expensive properties mean that future generations can't save because rents are so high because property is so expensive
3. They don't pay any tax on that wealth as unlike say the US where there are property taxes which can add up to 1-3% of the value of your property every year.
4. Their pensions are being paid by people who are working now and who have typically to pay student loans as well. When they worked there were many more workers per retiree so they didn't pay as much as young people today.
5. They are a huge voting block and control the governments, witness the Labour u-turn on winter fuels.

So I don't begrudge them the money, but they are now being triple locked and winter fuel pandered to by successive governments even though they are THE RICHEST GENERATION THAT WILL EVER LIVE.

I'm alright I managed to get on the property ladder in London in the 1990s (early Gen X also benefitted).

But I do see how it is unfair, my kids will be OK, but others won't be.

I totally understand what you are saying.

My MIL died a couple of years back in her late 90s. My husband's share after the house was sold was 500,000. He was 69 when she died and as ungrateful as it sounds, felt that the money had come to late to be of any major benefit to us.

He gifted each son 50K and put 50 K in my personal account.

We struggled through the 90s and early part of this century. I stayed home to raise our sons, then I went back to school. My wages then went to paying off the mortgage as quickly as possible as we were not young when we had the children. I also manage to gift our sons 35K for their downpayments on their homes. Also paid towards a wedding and then paid for a divorce.

We've done the math. We live on his pension and I retire next month. There will still be money left for the family to share. Both sons will be far better off than we ever were as my Mother has told us there is no money coming to me as she will be leaving it to her grandchildren. Her home is worth over 1million and she recently gifted each grandchild 20K to avoid inheritance issues.

As you can probably guess this boomer was never her mothers favourite child and I was also told I was responsible with money, so didn't need any. My brother on the other hand is another story.

This! At no point did she express jealousy or disappointment or her wish to have some of the “amassed “ monies! She was merely pointing out her incredulity. People need to stop being so quick to judge.

I didn't read it like that, more how times have changed, so today you wouldn't be able to save so much on better wages.
More a dig at the cost of living than her parents imo.
My dad worked long hours in a factory, my mum worked part time in a playgroup. We had lots of days out, holidays and always had what we needed. My husband and I both earn a reasonable wage but both work full time. we're ok, but their annual income was about £10k less than just one of ours! By comparison we should be living better than they were.
Their mortgage was £18k, ours was £185k!

Times have changed!
When I married in 1993 we bought a 5 bed, 2 bath, 2 sitt, Dining, Kitchen, Cellar, Attics for £81,000. Of that our mortgage was £45K. Jointly we were earning £35K .

Well, it's true that the cost of living was probably less, but life was an awful lot more simple.

A TV was a major expense. I paid £500 for a 26" stereo telly back in the late 80s. £500 now even without allowing for inflation will buy a huge telly with all sorts of bells and whistles. I never had a broadband or mobile bill. Video games? Expensive branded clothing? Coffee carried around? A night out was a couple of drinks down the pub? We really had much less to spend our money on. Expectations and horizons were much more limited.

Times have changed but once the mortgage is paid off - and if you stay together then many will pay off in their 40s , if you then save your mortgage payments over the next 20 years till retirement - that’s a second home your could buy

The average age of a first time buyer is 33, and the average mortgage length is 25 years, so there won’t be many people nowadays paying their mortgage off in their 40s.

We're all mortgaged until 65 these days

Meritocracy is dead in Britain. It is as simple as that.

We don’t even get ‘let them eat cake’ any more. Just ‘work more’. But there are only so many hours in a day or a week, and you can be chewed up and spat out with no warning. This is Neo-imperial, Victorian style.

No not everyone is mortgaged till 65 though

theres all the people who buy off the back of inheritance

and all the people who buy away from London and the south east

the OP gave an example of her parents. It’s not everyone of that generation and sone in the younger generations will also manage that and have their children going “oh look “

yes house prices especially in London and the south east are barmy and something needs to change there but it’s not as simple as sone here make out

Of course not everyone (I was being a bit facetious when I said "all") is. But the average first time buyer is.
I agree something needs to change, but it isn't and current reality is that younger people are increasingly mortgaged up to retirement.
Perhaps some of us will get an inheritance. Perhaps it will increasingly go on care costs. Who knows. But they can hardly be universally relied upon.

I do think s couple's expectations and expenses are different now, too. Mobile phones ( for most members of the family), phone contracts, WiFi bills, laptops for schoolchildren, out of school activities, hobbies, gym memberships, cars, Netflix etc ... These are all expenses, that earlier generations did not incur because they did not exist. Earlier generations were guided towards saving for things, making food at home, passing clothes down though the children and saving for your "old age". You made one pram or pushchair last through all your babies (where possible). Life is more expensive for everyone, now but the older generations are more cushioned because they managed to save.

I agree. I bought my first house for £72k in 1988 on a 100% mortgage( easily available then), no savings, borrowed a bit of money from parents to pay fees etc.

The mortgage was an endowment mortgage which loads of people had then, with interest rates at 12% and higher it was predicted you'd have a large sum at the end of the term to pay off the mortgage, the capital amount you owed didn't decrease.
When interest rates increased people with repayment mortgages found it very difficult, next door neighbours who were a young couple with children were repossessed and had to go and live with her parents and another house up the street was repossessed too.
5 years later the market had collapsed and we needed to move, we were in negative equity, the house was worth 56k yet we still had a mortgage of 72k. I was made redundant from my job and used part of the redundancy package to pay off the difference so we could move.
Redundancies were common at that time( big 4 London financial services), it was awful, I saw male senior managers( who mostly had wives who didn't work) being escorted off the premises crying. Everyone made redundant had to leave the premises the minute they were told.
So it wasn't all as easy as some posters have made out.

TBH very few people -I know - and I don't live in SE or London will have paid mortage off by 40s.

In 50s with overpayments - a few and fingers crossed we might get there.

https://mojomortgages.com/first-time-buyer-mortgages/average-age-of-a-first-time-buyer-uk

• The national average age of a first-time buyer in the UK is 33 years, 8 months.
• Of all UK regions, Londoners join the property ladder the latest in life - averaging 36 years and 8 months old.
• Comparatively, first-time buyers in Wales tend to join the property ladder earliest in life, averaging 31 years old.
• Today, the average first-time buyer isn't expected to be mortgage-free until they are 63 years and 8 months old.
• However, in London, this surpasses the current retirement age at 66 years, 8 months.
• The average mortgage term that a first-time buyer chooses is 30 years.
• The North East has the lowest average deposit (£29,740) and mortgage total (£144,953) for first-time buyers, making it one of the more accessible regions for those joining the property ladder.

...

London stands out as the region where first-time buyers face the longest path to mortgage freedom. The average Londoner buys their first home at 36 years and 8 months old, with a 30-year mortgage term, meaning they won't be mortgage-free until they're 66 years and 8 months old.

The West Midlands and South East follow closely behind, with first-time buyers in these regions expected to pay off their mortgages at 64 years and 5 months, and 64 years and 4 months, respectively.

At the other end of the spectrum, Wales has the youngest average age for first-time buyers at 31 years old. With an average mortgage term of 28 years, Welsh first-time buyers can expect to be mortgage-free by age 59, the earliest among all UK regions.

Scotland also fares relatively well, with first-time buyers there expected to pay off their mortgages in 60 years and 7 months. This is partly due to having the shortest average mortgage term at 27 years.

It's not just a SE/London problem - it looks like most of Britain mortage is being paid right up to retirement ages or least very close to 60- and those are ones who scramble together the deposists to buy - more and more expect to rent - so will be paying rent out of retriemnt funds.

https://www.equityreleasecouncil.com/news/locked-out-two-in-five-expect-to-rent-in-retirement-as-confusion-clouds-options/
The research reveals just a quarter (25%) of current renters believe they’ll be able to buy a home before retirement. It leaves a significant majority of the renter population facing the uncertainty of long-term renting and the prospect of having to adapt their retirement plans as a result.

Inhertiance tends to happen around ages 55-64 - so for most not a help to buy unless a huge amount.

That said my IL and parents faced really tough economic times as well - it's just playing fields has shifted around housing costs.