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!

OP are you deliberately being obtuse?

You are posting on an online forum about how you have it tough etc yet you allow your husband to earn £1200 per month in a job he has being doing for 10 years and he has no ambition to change the status quo.

You have a 5 year old who has never been abroad, you have a home that needs renovated but you have no money. Why can’t you see you have a husband problem here and instead of picking that up with him you are deflecting onto boomers etc. I feel incredibly sorry for your child what a terrible example he is being set.

Take some accountability for your life and the choices you have made.

Feeling envious of G/P giving childcare is making you somehow, and in your mind, blaming bloomers.

Your family situation is personal. If your parents don't want to provide childcare, that's a personal issue. Don't blame a whole generation because your parents don't want to give you childcare.

I agree with you @KeenGreen

I lived as an adult through the 60's onwards and can share my own observations. I am not criticising or promoting any government or any generation. There are many variables in each and every personal situation that can make life harder or easier, and unless we walk in someone else's shoes we cannot really understand their position.

There are three things that have stood out to me, with regard to housing, over the last few decades.

1. In the UK, the housing act in 1988, which created tenancies in favour of landlords have had a structural shift in the nature of residential property as an investible 'asset class'. Some in the property sector say it has been the biggest influence. It (eventually) accelerated the growth in house prices. It also encouraged and directed personal financial investment into houses - it was a no brainer to extend your property and most planning applications would allow you to. With other financial deregulation on 1 July 1988, the interest in residential property as a more accessible way to make money aside from bonds, futures and equities was borne, with less risk.
2. Globalisation and advances in technology in the mid-1990s saw inflation fall. Not only fall but stabilise. The 1950's and 60's had low years of inflation, but inflation was hardly stable over any 24 months period. The 1970's and 80's saw inflation levels of 15% to 25% per annum. The fall in inflation from 1995 lasted 25 years and never really picked up again until 2022 when the combination of Russia's invasion and re-mapping of supply chains post Covid posed some challenges to the supply of goods. With low inflation, the UK government was able to borrow cheaply. Cheap money was abundant and the buy-to-let boom took off. Just a decade after the 1988 housing act, you could 'self-certify' your income and limited questions were asked. With a care-free attitude you could put a £10k deposit down on a buy-to-let each year and mass a small portfolio fairly easily. The shit never hit the fan in the Great Recession, because Quantitative Easing allowed the UK to support the economy and of course interest rates were low enough to act as a buffer. The combined effects of 2 and 3 cannot be overstated.
3. The concept of 'New Money'. This may surprise. This is nothing to do with Thatcherism, the Dot.com era or mega stars and influencers. Massive wealth was created in the UK in the late 19th Century during the Industrial Revolution. A lot of plant, equipment and household products were invented and produced in the UK. That wealth was concentrated in a large number of families. By the end of WW2 that wealth became less concentrated. Company takeovers were the norm in order for brands to compete internationally - from Coleman's mustard, to Cadbury's chocolate to aircraft, hosiery and tractors. In order to escape death duties this money has been divested widely across many families and with Inheritance Tax now cited as a 'voluntary tax' for those with liquidity, that wealth continues to flow down. It is a reasonable minority of people today who can trace some inherited wealth back to these sell-offs in the 1960's through to1990's. They will often have a second home, bought with this money.

As I say, individual variances will make a difference.

The reason why 'boomer' fails to resonate with me is because it is used as a personal label. I lived through this 'boom' age, but it does not mean I benefitted from all that was available. We were poor and lived in a rented run down cottage with no car. I had no university education, no tax relief on mortgage payments and no company pension all the while I worked. More importantly I did not have the information in my teens and 20's that other people had and which I have now. That was probably the most important thing - some families seem to have ti together and some do not.

However, by a mixture of perseverance, luck and kind generosity from others over the years I managed to succeed. That does not mean I have no acknowledgment of the difficulties today's younger generation are having. It is impossible to save for a mortgage when 60% of your net income is going out in rent payments, while paradoxically those rents could be significantly more than any typical 20 or 25 year mortgage. Every expense brings another expense. I do not know what type of world we are heading for, but unless we go back entirely to a feudal system, landlords are only going to end up subsidising their own rents through higher taxes to support housing benefits. That is a full circle I can see closing already.

There are many posters on this thread making some very interesting points and giving a lot of food for thought. My main concern for many young people today is the quality of information they are getting to be able to make real world decisions. I do not think much has changed since my early years when you learned from personal experience or from listening to relevant experience of other people. There is less of the former in today's age of personal devices and the latter is practically zero.

There is literally evidence that the boomer generation on average 'took' 200k out of the economy on average due to things like their final salary pensions, free uni etc, while the current young people are predicted to 'give' each something like 30k.
Its not a myth that they got more. There was literally a report done which demonstrated this. I'll try and find the link it was a govt report. I don't know why people try and claim otherwise when it was in black and white.

OP, I am a final year boomer. I haven't lived your life so I cannot compare accurately but I can tell you about mine.

I worked from 13 cleaning, Summer holidays from 16 I worked full time in a factory clocking on at 8am, and evenings washing up in a pub, saved it all for college. I went to a poly (now a post92 uni). I got a grant that covered my halls room and about half my bus ticket. No money for food, books, clothes, socialising. Student loans did not exist so it was literally work or drop out. At college I worked every Friday, Saturday & Sunday night, so I could eat & buy books.

I took a grad job in a bank (which I hated) and lived in an unheated bedsit with a shared bathroom 😫for 3 years while I saved, literally no social life, I worked & slept. No holidays, no takeaways, nothing. At 24 I bought a scruffy flat using the 0% mortgage I could get through my employer. Worked there another two years, until I could afford a normal mortgage, then left and started my real career at 26.

I didn't have a holiday until I was 29. Didn't have my ds until my 40s. When ds was two I became a single mum. I've worked full time all the way through, and moved jobs to be close to the school. Juggled childcare. Worked as a babysitter in the evenings. I've never had any help from family. No benefits except CB.

But I have accumulated a pension fund because I've worked continually from 13 to now - 61 and still working full time. I have 43 years NI paid, the first two years even though I was still at school.

The remarks about takeout coffee & avocado on toast come because to those who grew up as we did, the idea of wasting £3.50 on a coffee is ludicrous. It's hilarious. We didn't waste a penny., darned tights, picked coins up in the street. I still don't buy take-out coffee.

People's expectations of housing, heating, clothing, socialising are much much higher. People waste money on nails and brows and pay tv. You have a husband who chooses to do a nmw job only part of the year ! All of these things were unimaginable luxuries compared to how we lived. I have a colleague who spends £100 a month on vaping and another £100 on coffee, then whines about not affording a pension. 🙄

Houses are absurdly expensive I agree, but equally you have to admit that people do waste a massive amount of money.

Student loans are unfair and should be scrapped but do we need 50% to go through college? When I went, only 10% got places ( & fewer women), We fought to get in. Others did OU in the evenings. I've repaid the govt's 'investment' in my education by paying upper rate tax for 35 years.

Our economy cannot afford for us to have it all. Each of us needs to decide on our priorities. My priorities were to have a home of my own and to provide my one child with a decent childhood. I have achieved that.

I'm Gen X and my parents are very slightly older than Boomers. I don't think it's quite as black and white as some people would make out. It was, without a doubt, much easier to buy a house for previous generations. My parents had high interest rates but they still didn't seem to find it hard to buy a house. However, buying things to put in it were a lot more expensive, such as white goods and televisions (which we never bought and only rented) and furniture. We also only rented a video player. When we did buy things, it was only once, we never bought a newer model of anything. Some of my friends didn't have a telephone or a car. Not many people I knew went abroad for family holidays.

My mum is surviving mainly on the State Pension in a house that she owns but can't afford to maintain properly when things need doing.
My son, Gen Z, doesn't own a house but went abroad about 4 times last year and eats out every week.

I’m older than you , gen x, so my parents are silent generation but I’m massively better off than them despite not going to university or being given any money towards a house. Now guaranteed I don’t smoke and go to the pub every day like my dad but we have a good standard of living, 4 bed house , paid mortgage off no loans etc. perhaps those few years make a huge difference?

We didn’t have a fridge in the late 70s/early 80s. Similarly, we didn’t have a tv much of the time, and when we did it was rented. When we couldn’t afford it, it went back and got rented again when there was more money. We lived in a council house, no central heating (it was there but never used), and ice on the inside of the crittal windows in winter. Never had a holiday, ate out probably twice during childhood at the local cafe. You sound like you had a far more privileged upbringing. I’m GenX.

You dont have any understanding of how previous generations lived. Foreign holidays - not many people had those. Own your own house - most people rented and often property that would be considered slums today. Some didnt have indoor toilets or a bath. Clothes were from a charity shop, not because you were saving the planet. Meals out - maybe fish and chips from the newspaper at the seaside, that was a big treat. The day trip to the seaside (by train, not many people had cars). Listened to the radio a lot as no tv and when you did finally get one in black and white. No telephones in most homes. Started work at 14 or if you were lucky 18 and when you got your pension only expected a couple of years of it before you died.

Maybe your parents couldnt do it but for many young people today it's foreign holidays from a very young age, gadgets and games, live in warm houses with indoor plumbing, school till 18, supported through university by parents, handed everything on a plate. Then your parents are expected to cough up for a deposit on your rent and/or house and to mind your kids for you. And you begrudge any penny they may choose to spend on themself while failing to maximise your own income.

OP, let's be frank. You have a husband problem for which you're blaming previous generations. If he was like most other married-with-kinds husbands of 39, with a degree, he'd have graduated into a decent job market in the noughties and be on £40k+ by now and looking for promotions and new opportunities to maximise his value in order to support you and your DC. Instead, for whatever reasons — dreaminess, poor MH, lack of ambition or confidence, a political or moral refusal to participate in the cut and thrust of modern life — he's found a nice, low-pressure-long-holidays job in a school with 'nice' children. He likes it — who wouldn't? He couldn't survive on his own on that income, let alone support a wife and child, but he has you to support him. I'm not saying he doesn't do good or important work, just that work like that has never been valued and never been well-paid and anyone taking it will do so in the knowledge that they will always be hard-up.

I seem to be surrounded by angry people in RL, all of whom blame boomers and inheritance for the fact that they struggle financially to afford what many take for granted. Almost all of them are in denial of the fact that they, long ago, opted out of competing in the world of work. They gave up work as teachers to sell stuff on Etsy and do a bit of tutoring and wonder why they can't afford to go skiing at Christmas. Or they dropped out, went travelling for 25 years after granny died and left them some money, then come back to the UK in their 50s and moan about the cost of housing and the lack of benefits. Or, like your husband, they decided they wanted a part-time, low stress job so they could paint, make pots, write their novels and 'be happy'. It's not the fault of older generations.

I think people also forget that someone with a PhD working at a university with a partner also working part time in education, with only one child in tow, would definitely have been able to afford a considerably above average standard of living back in the day without anyone saying their partner wasn't earning to their full potential...

I agree about this. My grandpa was a pit worker and set up a building company when they closed and then later he started doing up properties to sell and rent out and was still doing this well into his seventies. As as child I can remember him going over to the properties for maintainance work and never stopped until he died. This was 40 odd years ago and so before the property market was on the up but no doubt if it was now he would have been an asset millionaire. My grandmother had her own business in the 60s-80s. They were honestly the textbook strivers. Anywhere they could make a bit of money they were on it. I do think there is an attitude change for a lot of people today who aren’t thinking how I can I earn more? Certainly I don’t love my job but it pays well. Was it my dream? Absolutely not but I would earn less doing something else. I would have absolutely loved to have done a PhD but there was too much opportunity cost for the money. I would never have made that investment back so had to make the choice to prioritise the family finances.

If course you are not BU, and my God some of the sexist comment on here… I think it’s quite notmal
for families to have one parent working slightly shorter hours/ term time so they can be available for young children, it’s just that normally that’s the woman and most people don’t have a problem with that…
I can’t believe few posters actually called the husband “ lazy” ! Probably the same posters who would be moaning that there’s no SEN support in their kids school!
We need to live in a world where families can a) have time to look after their young children and b) lower paid support jobs exist.
Im Gen X, and I definitely had an easier start. There were no jobs where I grew up but I could go to university with a small loan, I could have bought a flat in London on 4x my crap salary on a 100% mortgage ( wish I had!) and I could work all over Europe. My kids start in life is not so easy and they definitely have the dice loaded against them in a way we didn’t. I think my generation could genuinely come from nothing and achieve. Now it’s much harder to even get an apprenticeship, or get your foot in the door.
I fell into job after job, in my chaotic fashion. Sometimes they were fantastic opportunities. I have many friends from similar non rich backgrounds who fell into media, film, fashion, journalism. There was a sense of possibility.
It’s harder for a 39 year old than it was for me and harder still for a 20 year old.

@KeenGreen “I admit to feeling jealous of those who have childcare help”

But your husband has been working part time in a low paid job for 10 years, so well before you had children. Why did he go straight into that role from university? He clearly didn’t start for the childcare-friendly hours because that was n/a at the time, so why are you jealous of people who have help with childcare? It wouldn’t make any difference in your case as your husband is too comfortable in his job (by your admission) to work anywhere else or do anything else.

I’d say compared to the same stage of life as a ‘boomer’ OP doesn’t have it anywhere near as hard as she thinks. She had the opportunity to go to university which none of my parents’ or my generation (X) could do. Myself and several of my cousins have all done degrees in middle age when we can finally afford it. People seem to take a university education for granted now. We lived in a tiny 2 bed bungalow that my dad did everything on - kitchen, built in wardrobes, you name it. My mum made our clothes, home furnishings, our Christmas presents. My parents went abroad once in their entire lives. We ate homemade cheap meals, my mum made bread every week and did the supermarket shop on her pushbike. She never owned a dishwasher and when we were little did all the washing in a twin tub. People rented tvs because they were too expensive to buy. My parents never had a night out, socialising was having some friends round for a home cooked dinner, a day out for us kids was a playdate. Many people today (including, by her own admission, the op) will end up the same as the media portrait of boomers in the long run, house paid off, inheritance to leave.

And of course if all boomers fit this wealthy media portrayal there would be no need for charities like Help The Aged, let’s not forget those living in abject poverty of all generations.

You are not being particularly unreasonable, however as someone else mentioned, neither of you have maximised your earning potentials. Education isn’t exactly a boom industry renowned for its generous bonus schemes. Why did your husband need a degree to be a TA? I’d get him into a higher earning industry/role, with higher salaries you could pay for childcare during holidays, you don’t need someone working term hours. Also you mention having done nothing to your home, why can’t you do man on/man off at weekends, one person does childcare and the other arranges DIY/whatever needs to be done?

My husband and I both worked full time for a while in higher earning jobs, with two young children. I had a breakdown, the kids were miserable. It was an awful time. Fact is I know many people in their 40’s burnt out from trying to do it all. About all every well saying her husband should earn more but will that actually help the family. Everyone I know who has managed some kind of balance for their family has one member of the family who has stepped back in their career. We were told to work hard and get good careers but actually doing that while managing a young family is bloody hard. Especially when you factor in the rising number of children with SEND.

This is happening because of growing wealth inequality. The super wealthy are accumulating assets, while ordinary people are priced out of the economy.

Asset prices keep rising, while wages remain stagnant. This means workers get poorer in relative terms, while asset owners get richer simply by holding onto their wealth.

Since wealth generates more wealth, and ordinary people don’t have enough to invest, inequality keeps getting worse. The wealthy then use their financial and political power to shape policies in their favour—such as low taxes on wealth, deregulation, and policies that protect asset values.

If ordinary people can’t afford to participate in the economy, demand for goods and services falls, leading to slower growth and economic stagnation. Governments then rely on low interest rates and quantitative easing, which ironically make the rich even richer.

Economy needs rebalancing and that can be done by introducing a wealth tax.

Gary Stevenson explains these things so well. He's got a youtube channel called Garyseconomics.

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 mean, honestly. Where - and how - are you hearing this enough to make you 'sick'?
Because 'boomers' is a term of derision and contempt for this very reason. Everyone thinks it was easier for them. They are the Karens of this generation.

It’s all very well talking about paying for childcare all the time ( which I do pay for some so not criticising) but when my children were in full time childcare they were unhappy, they wanted more time with their parents. It’s not so simple as just work more. Parents are quite rightly trying to balance everything.

Not my experience of my parents’s boomer generation My parents were both teachers working full time when I was born and they struggled to buy a decent family house. They managed though but it certainly required both of them to be working full time. We had no holidays until I was older and we had very cheap cars.

To add: my mum also worked a part time job and took in piece work from the local factory. Many today have no idea how hard it was to be a similar age in generations past.

I think the issue is that in the time when boomers had small families one person could afford to go part time or have a lower paying job. Not so much now.
Dh and I are professionals with a small mortgage ...it is a squeeze.
I think it would help if the generations weremore sympathetic tbh.

My parents never had a pot to piss in, always rented, and never gave us a penny as adults aside from small Christmas/birthday gifts (maybe £20).

I bought DM a flat when DF died. I also support her with help towards her bills as she’s living on pension credit.

My DCs have good jobs, good pensions, and have bought their own houses (albeit in the north, not the SE). So outside of the centre of the universe London/SE I don’t think it’s impossible for young people to buy property. It’s unfair to say all boomers are rich and all young people are poor. It’s more accurate to say that young people can no longer afford to buy in London/SE. I (Gen X) am more comfortable than my boomer parents ever dreamed of being.

I completely agree and recently saw a post on instagram that explained it quite clearly.
I was fortunate to buy my first house aged 21 (now mid 40’s).
My husband and I had a combined salary of £30k and our house was purchased for £30k with 5% deposit.
Today. A house costing £150k, a potential buyer would need a 20% deposit which would be £30K. Even a 10% deposit would be £15k
For people whom are single earners and wanting to purchase a house by themselves that is a lot of savings.