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!

Brave and ballsy post. I do agree with quite a lot of it though.

When your children are at school then life will open up. This has happened for nearly all our family. Struggle in the early days and then life gets easier. Each generation has a different struggle. Take every opportunity that comes your way and good luck.

Do you think two most common roles in the country during the 80's and 90's were academic and stay at home mother? That wasn't the setup for most people. Many people, including my parents, had two jobs just to get by. Home ownership was not something that everyone thought possible, even then. Of the very few of my friends who were able to buy homes (deposits saved by working overtime or second jobs) at least half had to hand their keys back to the bank thanks to interest rates. The others were sat on negative equity for at least a decade. Don't think to tell me about the 1980's and 1990's, I lived it.

Yes - typo… 7 year old was climbing all over me 😊

You have totally missed the point. Which is that for the working class, quality of life hasn't improved and for the middle class it has declined.

I was obviously talking about OPs circumstances comparing to a family in similar circumstances a generation ago. Life was better for them.

Honestly, I'd rather do it now.

The main issue is that the proportion of salary that goes towards housing and bills is massive. Disposable income is virtually non existent for today's families. My first home was 25k in 2001......3 bed semi detatched in crewe cheshire with a 100 foot back yard. Back then I could earn around £250 a week.......so 13k per annum.
Nowadays, that house would cost at least £180k yet basic earnings are no more than 23k per annum.......
There is a huge disparity between mortgages and rents and income.

OP, you do realise your children will be posting on forums like this about how much better you had it?

So many threads with posters wanting their parents to help them with a deposit and how they will help their kids - yet you can tell that they aren't going to be a position to do that for their kids.

We are all born into different circumstances. Some have it easier, some have it harder. The generation wars get old.

I'm gen X. How about the younger generations make the changes they want to see in society? (Yes, I've done my bit towards society and still do).

When I had my first child in 1989 we lived in a two room bed sit and shared a bathroom with big fat harry upstairs. The rent was £25 a week husbands wage £75.
I remember having to get a bath when I came out of hospital to soothe my episiotomy wound and fat Harry's insignia bubbles were still in it. 😄

Ok, let’s do that….

Let’s assume an average boomer family bought their house in 1975 on a 25 year mortgage.

Average male salary in 1975 - £1,900pa
Average female salary in 1975 - £1,000pa

However, only 50% of mothers of working age were in employment. So we’ll only take half of the woman’s salary.

So, that’s a combined income of £2,400pa.

Average house price in 1975 was around £10k. So, around 4.2x annual salary.

Now, let’s compare that with an average family in 2024 also 25 year mortgage.

Average male salary in 2024 - £40,000
Average female salary in 2024 - £36,000

Now, around 75% of mothers of working age are in employment. So let’s take 75% of the woman’s salary.

That’s a combined income of £67,000. Let’s: give that a multiple of 4.2x (same as 1975) and you get £281,000. Around the same as the UK average house price in 2024.

Add to that 1975-1980 interest rates started at 11% ending the decade at a record 17%. During the 80’s interest rates started hovered around 12% over the decade and during the 90’s interest rates hovered around 6% over the decade. Someone buying a house on a 25 year mortgage in 1975 would have paid an absolute fortune in interest by todays standards over the course of their mortgage.

At the end of the day it’s not that different now compared to the boomer generation. Mothers work, we have closed the gender pay gap a bit. We now have maternity leave and careers. We’re not pushed out of school onto a short-hand course with our only option being a secretary until we marry and have kids. That has meant as couples we have stronger earning power and can afford to offer that bit more on a house we love. Especially with the cheap debt we have had. Cheap debt and women working has caused property prices to increase but only in line with what we can now afford. Property is only worth what someone is willing to pay for it.

@Yazzi , people in those circumstances expected a lot less then. It was not uncommon for solicitors, uni faculty and the like to live in two bedroom townhouses, share one car, etc. I was there with friends who were exactly that sort of youngish (under 50) professionals.

No one was buying 4BR detached and flying abroad every year and getting takeaways and operating two cars, especially if they had young children. No one was SAHP.

We got in the property ladder late 90s, with a guarantor. Otherwise we couldn't have. We struggled with repayments on a grotty house we had to do work on, in one of the worst areas of town. But we were happy. It didn't really appreciate much while we worked and saved for better. We made 3K on it.

Now there are so many schemes available that would have helped us get into a new build. So I would rather do it now.

Your anecdote does not match the data:

Thirty years ago home-makers made up 35 per cent of the 'economically inactive' population - but now the level is just 19 per cent.

• Daily mail article titled "End of the stay-at-home mum?" - can't link for some reason.

Furthermore the one professional/ one SAHM set up was my exact set up as a child growing up in the north in the 1980s and 1990s. It was extremely comfortable with a part time nanny, overseas holidays, nice house, 3 kids. A life my husband and I, working full time in higher income jobs than my father did, can't provide for our family.

Of course people have it worse and were very grateful for what we do have. But that doesn't belie the fact that there has been a decrease in quality of life for comparable incomes.

Maybe this is true in your family but over 30% of families had a stay at home parent in the 90s. Google it.

Sorry OP, like so many women posting on these boards you have a husband problem. Why on earth is he working in such a low paid job if he has a degree? He needs to sort himself out and you need to stop whining about previous generations and their perceived wealth, when you are living with a man who, for reasons unknown , has decided to settle for minimum wage and long holidays!

Yeah this. ^ People definitely want a lot more/buy a lot more luxuries these days, and waste more money ... eg, on phones that cost 4 figures, and expensive laptops, and MP3/ipod type things, and takeaways, and meals out... And every couple has to have a car each, and they MUST have at least one holiday abroad every year, and all the latest fancy clothes and gadgets. AND they often have to have everything new in their home. Lots of stuff people got when they were starting put together was second had/from charity shops (35-40+ years ago,) but most people these days turn their nose up at second hand stuff. Some people these days have children who have expensive hobbies and interests too.

People settled for much less 35-40+ years ago. (Had little choice sometimes as there wasn't much surplus income.)

.

I've attached hopefully an interesting graph

"I don’t like the rhetoric of ‘well interest rates went up to 15% in my day’"

Just to point out that interest rates were 15% in the 1970s and again in the 1990s.
I think people are muddling the two high interest eras and getting confused.
The 70s was dire -interest rates above 10% for the entire decade.
1990s interest rates hit 15% and I think 17.5% for days.
I know I was there!

I think that's where the different viewpoints are coming from.

Ps Take into account the fact that wage stagnation and deflation plays a major part in why its so difficult these days.
Today's salaries get you half what they did 20 years ago.

And? I'd still rather do it now for reasons explained in another post.

Absolutely agree with you OP. I was recently chatting to in laws about us wanting a larger house now that children are getting bigger but how we can't afford to move. They think it's crazy that we can't afford to buy a bigger house given our salaries. I asked them what they thought our current mortgage is. They guessed £500 a month... it's actually £2000. They are clueless about how expensive life is for us!
But, their world was so different when they were our age. They now own two fully paid off (large!) homes and have income of over 100K a year on final salary pension.

They spend more on housing, but overall quality of life? I don't think so.

I grew up in those exact circumstances in that exact era, and my quality of life was better, and so was my parents. They say the same.

What of you are a single parent or one of you can't work through ill health? This all assumes everyone has a combined wage and is earning more than national minium wage.

Ageing population. Old geezers won't die, and won't pass on their wealth or properties, and won't downsize. Politicians still want their votes... cos.. ageing population.

No it's not.

It's saying quality of life and cost of living is generally (aka on a broad level, there will always be exceptions) worse, across the board, than it was 30 years ago. Economic data bears this out, too.

What's weird to me is the old generation saying "people just don't work hard", rubbishing entertainment and holidays. My parents and their friends (and most migrants I know) very much want their children's lives to be better than their own. It doesn't seem to be the case for the older generation on this board.