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!

I'm genuinely very sorry if this is a reflection of your own experience, BeGoldHedgehog - it would certainly explain some of the extreme negativity - but it honestly isn't everyone

Unfortunately it's true that some boomers pull up the drawbridge and don't give a toss about anyone else, their own DCs included, but then it's equally true that some younger folk fail to take advantage of opportunities they're offered and look to blame everyone else instead

Or to put it in one sentence, people and their circumstances vary for all sorts of reasons

My parents (who are in that age range) were utterly horrified by it, as were many of their friends. I’m similarly horrified by how much prices in our area have risen in past 10 years. Sure it’s nice for us our house increased in value but if we want to continue living in it then it’s not like we can get that money to do anything with. I primarily see the impact to people starting out now and think how it will be for my own kids. We’ve managed ok inspite of a challenge getting started but it’s so much tougher now to get started buying than it was 20ish years ago and it’s just getting worse. Treating homes as assets vs infrastructure has a lot to answer for. It’s absolutely not older people’s fault but I wish there was just an acknowledgement that housing affordability is a crisis for those renting and trying to make a start buying vs just trotting out that it’s swings and roundabouts/we had challenges too. If we won’t accept there is a problem that’s very different then how can we expect it to be resolved.

In an ideal ( unrealistic) world I'd love everyone's homes to devalue to more realistic levels by government order , but it is ridiculous to think like this , would never happen and be a logistical nightmare as well causing riots.
I think something needs to happen , but what I've no idea. There may be a crash I suppose , but that isn't always the answer either.
Maybe they might just level off a bit.

Incredibly cheap debt has been a significant factor in the rising cost of housing. Interest rates are now at a more normal level. Since the interest rate rises, house prices have stagnated compared to the previous 20 years of record low rates. Interest rates remaining at this level will help to temper the property market and ultimately help our children get on the ladder.

But people want the rates to go back down to the record lows. That will only cause house prices to continue to rise faster than wages.

Change can be extremely hard for autistic people. Some get burnt out with a fuller workload too and can't always manage full time. It sounds like between work and housework he's doing pretty good.

Maybe he could get some summer work, such as looking after a kid or two, although I know that can be hard to schedule.

I think the best possible things alongside stopping right to buy would be to tail off all buying incentives over a longish period, make it unattractive for investors to buy residential property and increase social housing stock. If you can stabilise house prices then they stop being a great investment to put any extra money in, which in turn reduces how much prices will climb. It also might mean people with available cash invest in businesses instead of property.

Yes. We need to get rid of the PPR exemption to CGT.

Currently this exemption means your house is one of the very few ways you can make money without paying tax. Unsurprisingly this has encouraged people to put more and more money into their house.

The exemption would have to be tapered off gradually as people have relied on it but it is a distortion and should go. Other countries don’t have it and have much more wage-proportionate property prices.

Renting also needs to be made more secure and appealing as the current state of rental here also pushes up buying prices.

Renting affordability and availability is in my opinion the biggest problem in this country for many people. Obviously all housing affordability is a problem but for earlier generations and especially the post war generation social housing was available and it was built to good standards. Houses fit for heroes to return to.

A Government needs to build in a similar style to the post war building to start to level out inequality. How many jobs and apprenticeships could be created by such a national housing programme. Why don't they just do it.

This is getting worse as the government adds taxes to landlords which the landlords simply pass on to tenants, making it even harder for tenants to save and therefore harder for them to get on the ladder, when the original thinking behind taxing landlords harder was to make it easier for people to get on the ladder.

What all kids need is a wealthy, generous bank of mum and dad coupled with the family home to live in while saving. It’s getting much harder to move up in the world of hard work.

Why don't they just do it
Because the Gov won't make any money out of it.
HTB loans( ended in 2022) mean the Gov is going to rake in £££ for selling people shitty, cheaply built houses they can't now afford but interest is payable anyway if repayments aren't completed in the 5 year period and the total must be repaid 25 years after it was taken out or if the property is sold.
This is the double whammy with rising interest rates increasing mortgages but also HTB interest is going to rise each year in tune with RPI plus 1%
I don't think we have seen anything yet sadly.

This. Op has made it clear that the point of the thread is
‘Year on year the situation is getting worse for each younger generation coming through’. Instead of a discussion about what could be done, this thread is in danger of being derailed by some posters who see it as an opportunity to ‘Bash the Boomers’. Looking at you Hedgehog. You’ve posted* *around 100 times on this thread - why not not start a thread of your own?

I think there is the extra point - be careful what you study at University- paying £9000 a year tuition fees and ending up with a job tact pays £1200 a month.

My last school wanted LSAs with degrees (especially in STEM) - their work hours were 8-4/4:30 and they did pre /after school groups as well as break duties! All for less than £1200 - schools would be lost without them!

Ok if it was the wife working school hours then would she be called lazy?

You sound very tired and worn out. Things aren't fantastic at the moment, but it's worth remembering that Britain engaged in some serious self-harm with Brexit and then shot the economy in both knees during covid, so all things considered it's a wonder things aren't worse.

Imagine being in Germany in 1944 - on the way to losing another world war, the country in tatters. It must have felt like the world was ending. It wasn't. Countries go through bad times and it's up to the citizens to keep going and build the world for the next generation. Looking on hopelessly and feeling defeated isn't really an option - we are the ones at the helm at the moment so really it's up to us.

There's every chance your son will have a great life. Don't let the gloom get you!

The idea that year on year things are getting worse is bullshit and I wish people would stop repeating it.

Things are not as simple as it was for the generation who took advantage of a world rebuilding after a huge war. That doesn't mean there's no hope.

House prices cannot keep going up forever. That is not how money/the economy works. I don't know how to say that more simply without being even more of a patronising git.

There is a lack of housing but there is also a distinct lack of young people. Give it a few years and the very obvious consequences of that will play out.

Every generation has its shit to contend with. I worry that this generation is especially lacking in oomph - a doom and gloom narrative seems to have taken hold and it colours everything unfortunately. Is it a fallout of lockdowns?

The fact is the OP is doing fine. She's maybe not as wealthy as she likes but on a world scale she is one of the luckiest, wealthiest human beings alive. She doesn't have what she expects, which is disappointing, but not a reason to rend ones clothing in anguish.

VERY good point here: 'There is a lack of housing but there is also a distinct lack of young people. Give it a few years and the very obvious consequences of that will play out.'

As in Japan. Lots of properties standing empty because the birth rate has plummeted.

Lots of my son's friends don't want children
They can't see much of a future themselves let alone bringing more children into it.
I honestly can't say I blame them

I think there is a portion of society that had relatively cheap essentials and expensive luxuries. Now we have expensive essentials and cheap luxuries
I never thought of it like this, but it is so true.

I think each generation had some things easier and some things harder. Generation X had fantastic role models in terms of long hours working but this coming the rewards that are expected. They worked longer hours but under much less pressure because there wasn't the scrutiny there is now. However, they accepted faults, errors, mistakes as part of life and fate.

X generation started to have higher expectations and say in their life. Errors and mistakes started to need an explanations and learning process. We introduced health and safety and the rest. People became more accountable. This was great in reducing evitable mistakes, but added significant stress in work and life in general. The X generation were taught to be resilient but that left them acting like martyrs and unhappy at work, whilst enjoying an easier economic lifestyle with increased luxuries so all in all, it balanced out not so badly.

And then we have the new generation. They grew up hearing their parents constantly moaning about work and how unsatified it makes them. They have been raised by parents under pressure who just look forward to when they won't need to work any longer. How can society expect them to be motivated to work? Not only do they see not gratification to work but worse, it doesn't allow them to enjoy the lifestyle their parents had.

My view is that we somehow need to return to a life where working is more satisfying for the majority. Bring back commitment in growing staff, social opportunities, a sense of belonging. This can only happen by accepting a level of reduction in individual productivity, but with less stress, less anxiety, less demand and a feeling that work is fulfilling psychologically, we can expect more commitment and less sickness.

I do blame them tbh. I think it's a lazy and entitled attitude that shows a complete lack of understanding of the consequences of choosing to opt out of continuing your own species. Sometimes I wonder if humans just can't cope with the level of cognitive ability we have - we know too much and worry too much to actually just live.

I'd love if my children could have very long lives and have generations of descendants themselves. But if we only live another few years then our lives will still have been worth it. I don't get this approach of just giving up and opting out. It seems so utterly feeble.

What will happen to all these people when they get into their 80s, find the world hasn't actually ended and have no family at all left?

Oh and please don't say 'Nobody should have children expecting them to look after them in their old age.'
In some circumstances, adults don't have anything to do with their parents, true. But it is far far more normal and typical for people to at least give something of a shit about their parents and in many cases for them to at least hang out with their parents right up to their death. Older people who don't have children tend to find that their birth family dies off, their friends die off and then they are left with nobody that they have a strong connection to. Regardless of some parent/child relationships breaking down, it's a fact that having children is an important part of ensuring that your family continues and is a long term source of mutual company and support.

I don’t believe that people should have children thoughtlessly without any consideration about what you can give them or what future they can have. That future, in an overcrowded world with finite resources, where too many have the wealth and entitlement to hop across it and take from those already there, is looking bleak.

Its got nothing to do with "generations" "boomers" "zoomers" or whatever terminology. There are poor young people poor old people and poor all ages in-between. Wealthy families have intergenerational wealth that they pass along.

I don’t think he’s lazy nor would I think a woman working school hours is lazy. The issue is he is not maximising his earning capacity not that he is lazy.

Yes I agree with this but unfortunately I it wasn't on my mind when I got up the duff after a nasty bout of listeriosis age 16.

My house was bought for £5,400 in 1960, brand new. In today's money that's £164,000. We paid £800,000 2 years ago with another £150,000 of renovation work needed. That means its was nearly 6 times harder to buy my house now than it would have been in 1960.
Its just one example but yes I think its harder now than it was.