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!

First response nails it

Yes. Part time, with regular predictable hours - and thinking they were hard done to.

Ha ha.

few hours on a Saturday morning would make a huge difference

No it wouldn't!! You get taxed higher on a second job. And at £12 an hour it really wouldn't

I know. I'm a mother. I planned for children and being able to take a break. However, the point you have missed is that the DC have a much higher combined income in their partnerships. There may be times when childcare nets off a whole or more than one of the lower salaries. However, that situation keeps people on the career roundabout and more importantly maintains pensions. Notwithstanding the fact that my DC are significantly younger than the OP and whilst DS is an early career researcher at 30, it is likely he will be a reader/assistant professor by 40. DD a Head of Department at 35 and their salaries will fund more childcare.

I wasn't aware that tax thresholds increased disproportionately for second jobs. Have I missed HMRC bringing that in?

I was a mother in the 1970s and knew very few SAHMs. Lots did work part time as childcare was really hard to find then, some of us shared childcare so my friend used to pick mine up from school as I worked fulltime, I had her's all day Saturday as she worked in her family business then.

Twenty years ago was 2005 - it was already pretty normal to be a working mum. I was already a parent then and knew very few SAHMs - most worked part time at least.

"Until 2020 the most common working arrangement for families where both parents worked was for a man to work full-time and the partner part-time. However, since 2020 the most common working arrangement has been both parents working full-time."

Because - at my time, when I went to University in the late 70s - there were only places and funding for the top 6% of students, so of course places were highly competitive. There were then some Polytechnics and technical colleges, which tended to be more practical/ work oriented courses. Day release courses and night school alongside work were also a lot more popular back then.

I do not think Tony Blair opening up the number of University places did many young people a favour. They leave higher eduction with large debts, and end up having to have a degree for many basic jobs which don't really need them in order to compete. As several posters have pointed out, today's young people start working and earning a lot later than the "Boomer" generation, thus taking a double hit financially. Not only are they losing years of earnings and career progression, they accrue very high debts and decades of repayments for the privilege. This in turn affects their ability to save a deposit, or to service a mortgage.

I have two degrees up to Masters level, but nowadays I really don't know that I would go to University. A friend's son has just done an apprenticeship with one of the Big Four straight from school, qualified as an accountant and has just bought his own house in his very early twenties, without parental help (all outside the south east). Other routes to success are available.

Who gets paid £12 an hour for tutoring? Round her the cheapest would be £40 an hour. You still pay tax but do 4 hrs on a Saturday morning and you've got over £600 extra month, even after tax you've got close to £500.

I think this is very accurate - the children of the middle/upper middle classes are feeling the generational divide more starkly as stuff they probably took for granted growing up is getting less affordable. Private school is probs the best example, fees have gone up massively in the last twenty years and it's become less doable for middle class families to scrimp and send their kids.

I was a mother in the 1970s and knew very few SAHMs.

Statistically less than a quarter of mothers worked in 1971..

You don't get taxed higher on a second job unless it takes you into a higher tax band. No one tutors for £12 an hour.

Agreed

No it's not higher I stand corrected, but the ops partner would start to pay tax on anything over the tax free threshhold.

But he's not a teacher, so how would he get a tutors pay?

Well that’s true for everyone.

Some of those mothers probably had older kids, so a mother of a school age child in 1971 could have had that child in the 1950s. I had a baby in the 70s and it was the norm where I was for mothers of my age to work although it was often part time. I think some of it was probably cash in hand, in a bar in the evening, doing some cleaning. I worked fulltime which was more unusual.

So we are essentially saying work more. I think the post is about how we have to work harder for less than previous generations did. This proves it

Education, education, education said Blair.

Not everyone tutoring is a teacher. Have a look at the agencies, it isn't a requirement with many of them.

Yes, which agrees with what I said. Most women worked at least part time so working mums weren't a rarity at all in the early 2000s.

I wouldn't pay £40 an hour for someone who is TA

As they should. And they would still ha e additional money.

DD tutors. I can't remember if she charges £35 or £40 for the hour. One of the parents is getting mate's rates because they are the Head!

Some of those mothers probably had older kids, so a mother of a school age child in 1971 could have had that child in the 1950s

they wouldn't be boomers though would they?

1950s. I had a baby in the 70s and it was the norm where I was for mothers of my age to work although it was often part time. '

Can you post some statistics to support that then?

I think some of it was probably cash in hand

Avoiding tax! how very naughty

Plenty of couples both worked fulltime in the past, he has chosen a part time term time only job so won't be working anything like the hours people were working in the 70s. Longer working hours and fewer holidays back then.