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!

To be fair, what you described as your childhood wasn’t typical for the 1980s. I attended a very good grammar school in an affluent area (though we were very poor) and there was only one girl in our year with a nanny. She was ribbed mercilessly for it. (It turned out that her ‘nanny’ was actually her Mum’s girlfriend but they felt the need to hide it back then). Even my ‘posh’ friends didn’t go abroad every year. I didn’t go on holiday at all ever, until I was 30.

@Bleachbum But the calculations don't reflect the actual situation. There may possibly have been some exceptions, but in the 1970's it was normal for banks not to take account of the woman's salary, and the maximum multiple was 3x the man's salary. Even when DH and I bought in the 1980's it was 3x + 1x salary.

Well mine wasn't, nor was it unique. Your point is?

That your experience wasn’t the norm so you can’t suggest that because the young generation as a whole can’t have a lifestyle like that now, that it proves a drop in living standards.

Nobody is suggesting that it’s not difficult to buy a house now but it’s not as impossible as Mumsnet suggest. My DCs bought homes in their mid 20s. My DS and his gf bought a 3 bed house last year for 3 times their combined salary, and neither are high earners. They also run a car, have holidays, gym memberships, and weekends away. I imagine they’ll feel the pinch if they have DCs, but for now they’re managing okay and have a much nicer home and lifestyle than I or my friends had at their age.

Well £50,000 mortgage would have been great but most of us had mortgages of over £150,000 and we worked very hard to pay them off. I think it depends on where you lived and what career path you had chosen.

i know it’s hard for young people nowadays but consider it was hard then as well.

I’m mid 50’s. I bought on my own and struggled to buy basic furniture (like a bed!) for 18 months as i laboriously did up a room at a time on my own over 5 years. My mortgage took up over 50% of my salary. I lived in a rough area and everyone used to raise their eyebrows when they heard where it was. I now live in a basic terrace due to having to cut back on work to support a child with SEN needs. My first job was aged 13 and I worked constantly until my mid 40’s and have continued to work as much as I can/need to. I am jealous of all the families I know who live in beautiful Edwardian leafy streets enabled largely by parents who have ‘helped’.
I do hear you but I have worked stupidly hard and made huge sacrifices and don’t like my house and street. My only observation of the generations 15-20 years younger than me seems to be that there is more of an expectation of wanting what a typical’boomer’ has much earlier and less willingness to compromise. I am aware though that maybe the families I know who are younger are not the norm and really quite wealthy!

@Bleachbum you didn't include MIRAS??

Yes my parents had it harder than I have, despite me having the same level job as my Dad.

You say you dislike the 'narrative' of a 15% interest rate but that was crippling for families. Nowadays, everyone expects to go on at least one holiday a year, a flat screen TV, TV subscriptions, mobile phones....

We never went on holiday as kids. Not once! Not even the UK. EVERYTHING was about paying that mortgage. The property wasn't cheap. Yes, relatively to now it is, but back then it meant we went without everything because my parents chose to pay the mortgage off early.

I have chosen not to pay my mortgage off ASAP. My kids and our memories are more important and includes an annual holiday in the UK. I can make that decision because the mortgage rate is 4.85% which I complain about. If it was 21% like my parents had, I would also have forgone everything else to pay it off.

I think YABU. Every generation thinks they have it tough. I'd rather have my work/life balance than slogging every hour like they did. And yes, I am extremely grateful to them for sacrificing their happiness and luxuries to secure a home for us.

I'm a millennial aged 43 and am on less than NMW working part time WFH, with only £875 as a freelancer. I have an art history degree, and worked my way up the publishing role career ladder after university until I had my eldest DD, then was made redundant. I went freelance, had a terrible head injury and post concussion syndrome before being injured permanently by an off label antipsychotic prescribed for severe insomnia and anxiety, and have been living with the medication induced neurological involuntary movement disorder called tardive dyskinesia now for nearly a decade.

My ill health certainly impaired and impacted my earning potential but I'm not going to stop working as I think it's imperative to keep going, especially as I have 3 DC. My DH earns a good salary but we are certainly not well off.

My parents are very comfortable, certainly not struggling in any way at all financially and both worked bloody hard in professional careers. My DF is a retired professor on a final salary pension, and they both have excellent provisions for old age, with investments, premium bond funds etc. It made me feel proud and happy to see them enjoy the fruits of their hard work, especially as they had to watch my DB pass away horribly from cancer aged 34.

They didn't always have things easier, and as "Boomers", they have told me about their frugal early years with small properties, low salaries and high interest rates etc. Not everything was easy and they earned every penny well.

If I could be as successful and hard working as they were, it would make me feel proud.

"In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3% of disposable income."
"Today, those figures are around £292,000 and 45.1% respectively.
Its research suggests the 6.43% mortgage rates of today are equivalent to a rate of 25.7% in 1980."

I am bit confused by your comment. My comment was in response to Yazzi benchmarking quality of life by her and her parent experience. There were lots of people back then with a lower quality of life than Yazzi can imagine. I know, I was one of them.

House prices aren't the only measure of quality of life.

You say you dislike the 'narrative' of a 15% interest rate but that was crippling for families. Nowadays, everyone expects to go on at least one holiday a year, a flat screen TV, TV subscriptions, mobile phones....

How can people not have a mobile nowadays?!

Yep, so you had to have a higher than average salary to afford an average priced home. Or a bigger deposit.

It has gone up to 4x salary in recently years due to low interest rates making servicing mortgages more affordable.

The biggest difference between the generations is the cost of rent and complete depletion of available social housing.

@Trolleysaregoodforemployment what's that got to do with my post?

The biggest difference between the generations is the cost of rent and complete depletion of available social housing.

And the size of the deposits required and wage stagnation.

They could certainly share one per family, and leave it at home.

Interesting this article popped up on the BBC website 🤔

but back then it meant we went without everything because my parents chose to pay the mortgage off early.

I have chosen not to pay my mortgage off ASAP. My kids and our memories are more important and includes an annual holiday in the UK. I can make that decision because the mortgage rate is 4.85% which I complain about. If it was 21% like my parents had, I would also have forgone everything else to pay it off.

This doesn't make sense. you just said you went because your parents chose to pay off the mortgage early.

They could certainly share one per family, and leave it at home.

😆

This has to be the most stupidest thing i've seen on here in a long time. The mobile phone shouldn't be mobile 😆

My apologies. @Yazzi’s DF had the same job as OP?

I thought Yazzi was talking generally about living standards dropping. Sorry Yazzi.

I read your post as quality of life only being measured by house prices. If that's not why you were posting those, I apologise.

No, not really, see my earlier post. You need to take into account women work now more than ever before. So a UK family brings in more money. So are willing to spend more on a house purchase. Which pushes up prices.

150K in 1970
Did you buy a castle?

My point is, as I have repeated, that anecdotes don't count for all that much (mine or yours), and the data bears out that cost of living pressures have wildly increased while quality of life has not.

I don't know why but I cannot link here, which is frustrating. But google "quality of life and cost of living 1990s-2020s". And you will see many reputable economic studies bearing out my point.