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!

This is very relevant. In theory, many "boomers" families had a very different set up for example in the 1950s, roughly 30% of women contributed to national insurance during this era, at a reduced rate to men. In most families, men were the main earners and women would bear the childcare/ domestic responsibilities (compared to now where the cost of childcare for working parents can be a huge burden on finances)

Women tend to live longer than men, and many people of that generation are largerly in need of social care/NHS services are they get older, meaning that there may be a deficit of their NI contributions compared to the care they need in their old age. The aging population is having a huge strain on the underfunded NHS and social care services, through no fault of their own. It was bound to cause problems down the line.

Obviously the issue is far more complex than this in terms of housing, successive governments over the last 40 years and changes in lifestyle.
It's very worrying to think what state resources will be available to us in 30-40 years time.

Just to add however. I was brought up in the 80’s. My mum had to work 2 jobs and no childcare so she took on jobs where by she could supervise us whilst she worked. A corner shop where were able to sit in the back room with colouring books or reading books.

Exactly. Where does this “ maximising earning potential” bollocks even come from? My (baby boomer) parents both worked, but generally not in hugely high paid jobs. They could still afford 6 kids and a house. We can’t all be Big 4 strivers (I still
dont actually know what a Big 4 is, but after years in here I know it’s an aspiration, along with Russell group university)
If ordinary people are struggling to be able to afford to have an ordinary small home and a small family this is a problem!

Post-war pay growth averaged between 12% and 15%. The government also constructed nearly 8 million homes. Since the 2000s, pay growth has averaged around 2% to 3%. This explains the discrepancy: one in four pensioners are millionaires in assets. This group also owns 80% of the housing stock...

We're currently in a cycle of no or low growth, just maintaining the status quo created by that generation. It costs seven times more to treat someone over 60 than all the generations combined. Life expectancy comes at a cost.
And their stamp/NI/Tax contributions ran out 20 years ago. They are as a group 33x wealthier than Gen Z.

The wealthiest generation in humankind's history.

It's harder in the sense that you can no longer leave school with no qualifications and go straight into a profession. My dad left school aged 15 (He's 80 now). He now has two good pensions and never struggled to get a job. Now, it's hard even for graduates to find good jobs. Housing prices are also significantly higher in comparison to salary than they used to be. Cost of living increases all the time, whilst wages stagnate.

It's exceptionally difficult to get on the housing ladder now unless you have parents who can help you, as it's hard to save due to the cost of living.

People also don't live in big family units in the same way anymore, which has had a significant impact on how childcare takes place.

I think it used to be easier to move up social class. I now don't think it is. If you leave school with nothing it will be very hard for you. And it's hard even for graduates, unless you've done something vocational.

My dad didn't have fancy jobs- he was in the army, then a prison officer, but had plenty spare to invest in stocks etc. He bought a 4 bed house at £80k which is now worth £350k. I'm a band 6 nurse so earn decent money, but would never have money spare to put in stocks. Without my parents helping me with a housing deposit, I'd very much struggle to ever get on the housing ladder.

People could also afford big families on fairly normal jobs. I now have one baby and would desperately love another, but it will be a huge strain financially. This then creates the issue of less children coming into the workforce, and ageing population, which comes at a huge societal cost.

Lots of pensioners are very well off. Lots of my generation will not be.

@OpenOliveCat Would you not expect a pensioner to be vastly more wealthy than a 20 something? They’ve gained their wealth over decades. The youngsters are just started out, and probably have a far high standard of living than those wealthy ‘boomers’ had at a similar age.

Exactly this.

In the past, it was possible to live on one salary, or for one adult to have a low paid job and still have a decent quality of life, and be able to afford more than one child. My mum did not work for most of my childhood. We had a house that I could never afford now, despite dh and I both working fulltime.

Something I don't understand is why you've made this post when you already have a second home.

You could be accused of accumulating wealth for your children, Why the post then?

Other than the obvious point of your husband earnings, I consider being educated to phd level a massive luxury. You have chosen to put a lot of money into education but are only earning £50k with it. That money could have instead been put towards your house. Could you be doing your job with just an undergrad degree? To justify the phd you should really be earning more...

I totally agree that today's 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. If your children go to a non-fee paying school, you should live amazingly well on your income.

Someone upthread posted this
She had the opportunity to go to university which none of my parents’ or my generation (X) could do.

Can you explain why? Because my uncle (boomer) went to university as an adult with kids in the 1970s. My aunt worked full time in a factory and he got a full grant.
It was much easier to go to university in terms of funding, especially until the early 90s, so I’m interested in why it wasn’t a possibility?

Now we have expensive essentials and cheap luxuries.

Very good point!

In the past if you only had one person on a low wage life was very tough - you didn't have those families buying houses or owning cars and having holidays

One decent , or two low wages would be a decent council house - 3 bedrooms for however many kids

Two good wages might be house buying for people from a working class background

I hate it when people say 'just get a better job'.

Because it's so easy to get jobs nowadays isn't it 🙃 Even basic jobs have lots of applicants. Everything wants a qualification or loads of experiences. Gone are the days you can leave school with no qualifications and enter a profession, work your way up, and retire early due to a good pension.

I'm not here for a debate. I'm telling you the facts (Averaged). The golden age postwar rebuild is done. It's never coming back, and it has nothing to do with work ethic despite the contrary controversial opinion of that generation.
Just a happenstance of being born into that generation.

They don’t own a second home, they sold the first house they bought and now own/live in their second house. Not the same as an additional property!

(at least that’s what I think the op is saying, I think the term “second home” may confuse people)

My dh was told he needed a degree, but it was all paid for by his employer and he could work and earn. It wasn't always easy for him as he had been out of education for a while by then following his apprenticeship ( also paid for ) and we had a small child , but he was given time off to study and a day release for a few years etc.
I really don't see that happening these days and they now only hire graduates. Employers have different attitudes to a lot of their staff.

Plastering is a doddle. They do 3 day courses for around £400, then your DH would have a skill that could save you thousands! As you own multiple homes, I would expect one or both of you to be DIY competent.

Because there were nowhere near as many university places as now. In the 60s-70s only about 5% to 10% of school leavers went to university. The rest got jobs or went into other training eg apprenticeships.

Rich kids from posh schools were the traditional university students. Enlightened postwar government started opening things up for working-class kids to get into university. Not by dumbing anything down but by giving grants and paying fees. Harold Wilson was a hero.

The age of improving lives which we witnessed after the Second World War won't come back if people keep voting selfishly and the rich are enabled to gather ever more wealth to themselves at the expense of the average person

Young pension age should always be the richest time of anyone's life - unless they expect the state to fund them totally

Margaret Thatcher massively increased the number of universities in the 1980s, largely by repurposing former technical colleges etc which used to provide practical training.

OP, I've just read that you've got a PhD and are working in a university, so presumably an academic. You'll have plenty of wfh-type time available in order to look after your child so it seems odd that your DH needs to have work that leaves school holidays free too.

I agree that the big difference nowadays is the cost of rent and house prices; the second in particular is bordering on insanity, made worse by silly government schemes which may appear to help but mainly prop up prices for mass developers which then trickle down

The second big difference though is the expectation among some just starting off that they should have it all. Try suggesting that they should begin with second hand stuff, cut down on Instagram-worthy holidays and salon procedures in order to save and all the rest and all too often you're met with horror

So as with much else it's a balance; yes some things have made life a lot more difficult, but equally some really don't help themselves ... just as it's always been

Well you are actually annoyed at your particular circumstance - your DH needs to earn more - simples

She had the opportunity to go to university which none of my parents’ or my generation (X) could do.

I don't understand this either. I'm mid gen X and went to uni, so did my brother who is 12 years older (younger boomer). It definitely wasn't unusual for someone in my position to go to uni.

Did not come from a well off background - both had full grants (mine topped up with student loans). Didn't have a parent pushing us to do this at home either - one was dead by the time my brother went to uni and the other was a working class shift worker.

This was the career guidance from my dad 'have you applied to uni yet?'. My answer was 'yeah, I'm going to [RG] uni to do X'. Conversation ended there with an 'oh, ok'. No well done or anything. I may have got that if I said I was going to Oxbridge though. Came home after first year and he introduced me as doing Y at uni to his friend. He gave me £100 for fresher's week and that was it. I guess from somewhere there was the expectation though!