Generational wealth differences

[KeenGreen]

My first AIBU so let’s see what I’m in for!

First to make clear none of the problems now are the fault of previous generations. It is not a blame game!!

So AIBU to be frustrated with the rhetoric that todays generations of young families have it no harder than previous generations in terms of wealth and they just need to be more frugal to have the same standard of living??

I am sick of hearing the idea that older generations. So called boomers (for the record I don’t like this term) didn’t have it easier than younger generations.

I am 38 I have worked since I was 16, lived independently since 17. Put myself through university all the way through to PhD. My husband is 39 works in a school as support staff (LSA) and takes up circa £1200 a month. He has a degree.
I work in a university and earn just under £50K before tax so our household income is probably about £65K not the lowest by any stretch but enough for us to struggle to balance costs. We claim child benefit but otherwise no extra help.
Husband only works term time of course, but that means he’s around for our child during holidays.

We have one DC age 5, and can’t afford any more.
Our closest family lives over 2 hours away, so we have no family support with childcare or help if there is a sick day or anything.

We have a mortgaged small semi detached 1930s house with 3 bedrooms, It needs a lot of work but we haven’t been able to do much because of time and money. Current mortgage fix ends in 2026 and I expect our mortgage repayments to go up by about 50% extra £300 a month.

We pay off student loans and my pension contributions are also high.
I took only 6 months maternity leave because I couldn’t afford to go to half pay for long and not into no pay at all.

My husband had virtually nothing in his workplace pension because of low earnings.
Mine is keep being devalued because of sector changes and it’s definitely not the best pension in education. (Teachers pensions are better).
I can’t even imagine what it will be like to try and live off my workplace pension alone and I would have to go all the way up to retirement age which I can’t imagine myself doing in a stressful job.

Retirement age for us is currently 68, that means we have 30 more years.
But with the way things are going I have no hope that there will be a state pension at all for us, or the age will be pushed even higher, so will probably be dead! Despite the fact I will have been paying in with tax national insurance for 50 plus years by that point.

I just feel frustrated about this idea that I hear people say that our generation just needs to work harder, or get better paid jobs etc because it’s not that easy. We both work hard in the education sector. Enjoy our jobs for the most part and find them fulfilling albeit stressful at times!

Like I said not about blaming previous generations for the picture we are in, but I don’t like the rhetoric of ‘well interest rates went up to 15% in my day’ etc when house prices were so much lower in proportion to wages and the cost of living right now and inflation over the last 10 years shows wages haven’t increased in line with this.

ps I know we are not the most hard done by! But still feel the pinch and we certain don’t live an extravagant lifestyle!

People are misunderstanding what "maximising your earning potental" means. It doesn't mean that everyone should go and apply for £100k jobs in finance, it means earning as much as you are able with your skills and time. The OP's DH has a degree but works part time in a low paid, low skilled job. He has both the skills and time to earn more - eg by training for a higher paid role in education, moving to a better paying employer or perhaps getting a second job.

Mr Monkey has a friend who is a part time support worker for SEN kids. He also works three days a week and school holidays in a retail role.

Well, thanks OP for yet another boomer bashing thread, you did well.

I disagree with this. I remember my grandparents, who were the silent generation, both sets volunteered in their community in one way or the other and massively helped my parents with childcare.

As a millennial, I volunteer every week, alongside working and having kids.

I don’t see my folks, or my friends parents volunteering and many struggle to get any childcare help in the way they were helped with us as kids. There will be differences, I do have some friends with hands on grandparents, but this is the general landscape.

I think whilst your little one is young, it’s reasonable for your DH to do the job he does as I note he picks up holiday childcare and a lot of the housework which is worth a lot to your family.

However, long-term, he needs a retirement plan if he ever wants to retire. This probably means re-training.

I don’t think this is a generational wealth issue - few men of the “boomer” generation - especially with a child - could afford to do a job they enjoyed. They worked to provide financially.

Having said that, your husband does a valuable job and it should be paid more. However, this is a deeper societal issue that won’t be solved overnight (or likely by when he wants to retire) so you still need to look after yourselves

I have only read the first page. I was born in 1960; DH in 1961.

I do not get my state pension until I am 66; DH 67. Between us we have 78 years of full contributions.

Our DC have always been our absolute priority. Whilst we have two substantial homes, one in the UK and one in France, the DC are well provided for and always have been. They are able to follow their dreams career wise rather than follow the money.

Additionally DH's parents were poor and working class and never inherited a penny. Mine were not and my mother inherited her parents' assets (substantial).

Neither sets of parents have helped us with childcare, ever, not even in an emergency.

Our children will benefit in ways that many from previous generations didn't but now will. Their grandmother's money will bypass us to go directly to them because we, as nasty, greedy "Boomers", don't need it. Hopefully they will have to wait 20 to 30 years for ours.

Prior to mass ownership, there were no assets to pass on.

The ageism on MNet is reprehensible.

I broadly agree with you, OP, that things are more difficult for young people now.
But I am confused about what you say regarding your workplace pension - if you're an academic, this is presumably the USS? That's a great pension, though I appreciate it's not as good as it used to be...many people would still give their right arm for a USS pension!

Boomer friend. Mortgage based on 2.5 times joint salary in 1980. House cost was just under £20,000 and they could only get an 80% mortgage - commonplace in the 80s as banks/building societies were a lot more prudent. 2.5 times salary was the most you could get on standard interest rates - anything else was through a broker, attracting fees and higher interest.

They had to save for a 20% deposit - £2000 - on a combined salary of just under £5000 per annum. Mortgage payment took up the whole of one salary and ate into the second when interest rates went from 11% base to 15% and then to 17.5%. They both had to take on second jobs to make ends meet. I think everything’s relative and the notion that all boomers had it easy is a myth - it’s just that the issues were different.

And I can certainly remember my boomer mother sneering at me for living in a 3 bed semi in my 30s (I still do) while she pointed out she’d lived in a big 4 bed detached house in her 30s. I pointed out to her she’d never have been able to afford a house as expensive as mine! 🤣

Yeah but people don't want to hear it. This thread shows that. They like to believe that the wealth or financial comfort is due to hard work and good choices. Which obviously play a role. But you can work hard and make good choices now and the wouldn't pay if like they have for the baby boomer generation in particular.

People will always come back about high interest rates in the past or inflation. But it's bit comparable. House prices as a % of salary were significantly lower. Then they rose massively giving significant wealth to many. In addition younger generations now need to get into substantial debt to get a degree for jobs which did on the job training for previous generations. Starting off adult life in a worse financial situation. But yeah it's all the coffees people buy!

This sums it up, where does the ignorance come from though?

So you don't take on extra work, OP? Sounds like both of you could tutor as a minimum. My 20 year old has 2 jobs - a full time one and a part time one. I have taught for years but I also tutor and exam mark and in the summer I run a summer club for 3 out of 6 weeks. I have just thrown out sofas I've had for 18 years and they were second hand when I got them. We don't do expensive holidays. The car was new 10 years ago but won't be replaced until it's on its' knees. I rarely eat out or go out because I can't afford to.

Life is tough for young people right now. It's not so easy for some of us in our 50s either, despite us having had things easier. Way I see it is don't moan if you're not maximising your potential income.

Teaching is a notoriously low paid profession but you’re both fortunate that you are well-educated and have the ability to improve your financial situation if you’re willing to find opportunities to retrain or upskill.

Your husband clearly finds satisfaction in helping young people at school, but by continuing to basically earn minimum wage he isn’t prioritising helping his own family with his refusal to step out of his comfort zone or progress his career.

If each was maximising their income they would be on over £60k, possibly close to £100k depending on their hours/business. Easily able to afford at least a 2 bed flat or house in many areas, even in the south east.

People have always moved around to achieve what they’ve wanted, whether that’s work or housing or education. Why is that seen as so outrageous now?

Tbh it sounds like you just have shit parents who haven’t spread their wealth.
Im a wicked boomer and this is what DH and I have done for our DC’s despite only ever earning average wages:-
Paid for driving lessons
Bought first car
Supported them through uni (I didn’t go, working class girls in the 70’s didn’t, however clever)
Paid deposit on rented accommodation
Gave them lump sum to purchase first properties
Regularly pay for holidays/furniture etc
Friends also regularly provide free childcare for their grandchildren.

Im not asking for a medal, this is what every single one of my friends have done for their children; isn’t this what families do support each other?

I’m not blaming the past generation.
The situation is not of their own making.

the idea of wealth creation is laudable concept for the privileged.

as mentioned in my OP I had to be self reliant from the age of 17, working all hours in retail whilst finishing my A levels. I then turned down my university place because my loan would even cover my fees let alone help me with living.
I worked in retail and call centres to make ends meet.
I went to university at 22 for my undergraduate degree first person in my family to get a degree. I worked my socks off at university both in studies and employment and industry experience.
There was no postgraduate government loans, I had to pay for my Masters degree with a postgraduate loan from Barclays.

For me wealth creation was getting qualified and putting myself in the best earning potential I could be, plus buying our first home with all the deposit saving etc that went into that.

We live in our second home now. And this will be our forever home, so wealth creation for me is a stable career (as stable as any career can be) and a home that will be paid off before we retire, and be passed on to our child through inheritance.
And I know I am lucky to be in that position!

OP, you do realise that women at the tail end of the so-called Boomer generation have had their state pension age increased from 60 to 67? Those that finished school and started work at age 16 will have been in the workforce for 51 years at pension age.

Jumping on here late. But are retired boomer teachers or educators wealthy?

It is a sad fact but it is widely known that the public service jobs (teachers nurses etc) are not the money jobs and people are called to those jobs for other reasons.

Hopefully this generation who have struggled won't be selfish and entitled like the boomers. Who happily cash in their pensions paid for off the backs of the young. Who themselves won't have pensions because they can't afford kids to pay for their pensions.

I think each generation has had its own challenges tbh. I'm Gen X and my parents came into the generation before the baby boomers - I think they're known as "the silent generation". In some ways, their lives were much harder than mine. In other ways, their lives were much easier.

I'm not convinced that Millennials and Gen Z have it harder than the Boomers overall. They just have different challenges.

I think there can be a tendency for each generation to focus on the particular things that might be harder for them, and to brush aside the challenges faced by other generations. So each generation ends up feeling hard done by in some way.

The OP sounds like she is doing OK overall. She has a 3 bedroom house and a better pension scheme than many people could ever hope for. Her DH has had the freedom to be able to accept a low paid role so that he can prioritise his mental health. It isn't exactly as if they're having to spend all day in the mines to make ends meet.

Most people work from 16 now, and study. And most people now will not be able to retire...EVER

There has been richer people and poorer people forever, people who live easily and people who struggle more. None of this is new, it's not specific to any generation.

My grandparents live through WW2, through having their homes destroyed by bombs, having their young children evacuated, having to stretch food rationing out, no welfare state, no NHS. They would have rolled their eyes at some of the "challenges" people talk about today.

When I was born there was no statutory maternity pay and women just stopped work to have children. So my mum had no career, no workplace pension.

In your own example, you've chosen to study to PhD level, much further than most people choose to progress to, that comes at a cost. Your DH has a lower than most salary, yet combined you still have a job each, a child, mortgage, three-bed home.

I don't think it's always the case that people need to work harder or get better paid jobs - certainly that helps, and certainly housing is more expensive these days in relation to pay. But the significant difference I see among the younger generations I know, is that people often don't live within their means and don't prioritise what they claim to want most.

As an example, some of my colleagues will often talk about how difficult it is to get on the housing ladder - and it is. But they rent alone, go on a couple of holidays using credit cards - paying it later, regular nights out, smartphones, Netflix/amazon/etc subscriptions, new clothes, and so on. All fine if that's what they want in life. Whereas I lived in multiple-occupancy house shares, no holidays or any luxuries, social time with friends was a bottle of wine and chat at home - I scrimped and saved and went without a lot to get a big enough deposit together to recognise what size mortgage I could get. And it took me a decade to do it! I prioritised that because it was the most important to me.

????????

This is such an unfair generalisation. My parents and in-laws (all boomers) have been incredibly generous both financially (the one set who have plenty, the others don’t have as much but are still generous with what they have) and with practical help. In fact I can’t think of any people of that generation who behave in the way you’ve described.

You do know how the state pension works ?????

It’s definitely a thing.

on our road of identical semis the 70 year olds used to work as gardeners, carpentry and primary school or didn’t work. The newcomers are top lawyers and bankers.

They may have it harder but they get not sympathy for blaming their parents or boomers. ( needless to say some will get big inheritances)
Working from home is something that this youngest generation can enjoy which btw has also contributed to higher rental prices and houses prices as nomads have moved countries, cities and to the suburbs. It is not a blame game.