Calls for Help Freeing Up Family Homes

[CogitoErgoSometimes]

Free Up Family Homes The charity 'The Intergenerational Foundation' is recommending tax breaks to encourage older people to leave oversized homes. They estimate that there are 25 million unused bedrooms in England. Half of over 65's have 2 or more spare rooms in their home. Housing minister Grant Shapps doesn't sound keen on the idea. But what do you think? Should home-owners and tenants be encouraged to trade down for public-spirited reasons? Or should they be able to rattle around in their multiple spare bedrooms and left alone?

Maybe iggly means higher education, which most certainly has been cut and our youngsters - if they still go on to university - will be paying the price for the rest of their lives.

There is no rise with inflation = effective cut .
Public (and private) sector pension liabilities, aging population these are what economists long term are really worried about. The banking crisis brought it to a head sooner.

Housing lack of control encouraged banks to lend which encouraged house price to rise further (cycle commenced). I will try to find facts and figures on the deficit structural deficit and total debt to show you. This country is in trouble.

As an aside when we moved pre slump the bank wanted us to keep our flat and BTL not sell it. Of course we sold.There were very dubious practices.

Bear in mind with the destruction of industry (this was a crime) the financial sector became important for bringing in money from abroad . Our version of export. The treasury used to call the stock exchange weekly to ask how much money was coming in.

No I don't think those in council homes should be able to live in oversized homes. My MIL lives in a 3 bed council house on her own. She should have a one bed place for her and her cat! It makes me when I then visit a family with 5 children living in a 2 bed house with hardly any garden.

That said - fish breed to the space they have available so perhaps humans should do likewise..
Most private owner pensioners do downsize automatically because the equity contributes to a comfortable retirement. My parents did from a 4 to 2 bed bungalow once my brother and I left home.

pension liability:
"the Government Actuary?s Department estimates the present value of these unfunded pension liabilities at about £2.2 trillion, so even in the context of the official government debt the numbers are very large. Of this figure, £1.4 trillion relates to the state pension and £800 billion to pension commitments for government and other public sector employees. To get to these figures the Actuary?s Department uses estimates of life expectancies and then takes the sums which are expected to be paid and discounts these back to their present values using a discount rate. It uses a discount rate of inflation plus 3.5% per annum."

from:www.economicpolicycentre.com/2010/04/19/government-pension-liabilities-understated-by-1trillion/

Article goes on to say this maybe an underestimate.

Without wanting to get started on pensions - god forbid - I'll just point out there that the local government pension scheme is the only public sector scheme that is actually funded and therefore not included in those liabilities. Something the UK Government seems to have forgotten. Not saying reform mightn't be needed, just that they should acknowledge the difference and not lump them all together. And they should also be raising the miniscule contribution rate for the extremely generous civil service scheme before going after other public sector employees.

The end (and goodnight!)

'He may be married by 25 and certainly not feel guilty if you gave him the deposit for a home. Do not guess at your child's thoughts no one knows but them.' Not if he has any sense ...married yes, perhaps, kids by then, I hope not. He'll only just have finished education if he does an MA. You have kids when it suits you domestically and professionally - I was 29 and dh 35 when we had ds, but by then most of the sea going part of dh's career was done and he was more likely to be around, which helped with getting pregnant. Submarines are fabulous contraceptives.

As my son is 16, I can have a good guess at his thoughts thank you, and he knows the choice is uni fees or house deposit, and he's gone for the uni fees, as he does not know where he will work thereafter. You will spend many years guessing your child's thoughts, and you will learn pretty quickly that you are right about what they are. It saves trouble in the long run. A raised eyebrow and a 'don't even think about it' maintains the omniscient mother impression for years.

You can send different kids to different schools, don't be so daft. My brother went to boarding school at 11, I was already at the local comp as I didn't want to board. I didn't even think that he was getting a private education and I wasn't; I still got better O and A levels.

As to 'I was not refering to mortgage repayments but getting the mortgage and being able to purchase the house in the first place.' Our current house is our third and we were well within joint income tolerance when we bought it, and yes, we could still do it now at current prices. It helps that our home is in Cornwall, prices are reasonable in the bit we live in, and having just looked at where we used to live in Plymouth, solid three bed Edwardian terraces near both good private and state schools are going for £160k, so with a deposit of say £30k a couple on say £45k per year joint income could afford that.

I wouldn't say the defence cuts have mainly influenced the young - you have no idea of the amount of folks in their mid to late 30s and early 40s who will be holding their collective breaths over the next 2 years if they survived the redundancy tranches this time.

Gaelic - I read somewhere that the LGPS was now in trouble and wasn't as well funded as it had been. As that's my preserved pension, I hope that isn't the case.

I think - I THINK - the Scottish one is OK which is where mine is. Not sure about the English one - hope that's OK for you! Even so, I still think they could look at lots of different reforms - especially capping the final salary that the pension applies to (ie not the £150k salary that someone got in their last year) - before attacking the average worker, who is already facing salary freezes for the foreseeable future with no opportunity for overtime or performance related pay.

Anatole Kaletsky is a journalist and economist based in the United Kingdom. He is Editor-at-Large and Principal Economic Commentator of The Times, where he writes a thrice-fortnightly column on economics, politics and financial markets. He also writes for "Time":

" ....governments everywhere running out of money, not just in Britain and Greece, but also in America, Germany, Japan and France? Why are taxes relentlessly rising in all advanced capitalist countries? And why is public spending being cut on schools, universities, science, defence, culture, environment and transport, while spending on health and pensions continues to rise?
The populist answer to these questions is that we are all about to pay for the greed of the bankers. But this is not true. According to IMF calculations, the credit crunch, bank bailouts and recession only account for 14 per cent of the expected increase in Britain?s public debt burden. The remaining 86 per cent of the long-term fiscal pressure is caused by the growth of public spending on health, pensions and long-term care. The credit crunch and recession did not create the present pressures on public borrowing and spending. They merely brought forward an age-related fiscal crisis that would have become inevitable...."

"The rational solution to this fiscal crisis would be for governments to reduce their spending on pensions, health and longterm care. Yet these are precisely the ?entitlements? protected and ring-fenced by politicians, not just in Britain but also in America and many European countries, even as other government programmes are ruthlessly cut."

"While many politicians claim to be obsessed with education .... in reality they support health and pensions to the point of national bankruptcy, while squeezing universities."

"The NHS spends an average of £350 per head on the 16-44 age group. By contrast, the NHS spends an average of £2,700 per head on the over 65 age group. Almost half the entire NHS budget is currently spent on pensioners."

I have not included parts where anyone political is mentioned as I do not believe in quoting politicians. The bit on NHS has had a few additional facts removed (I kept in important ones ). This is merely to emphasis that at some stage taxes etc on young will probably rise etc just as people live longer , but we will all need to save more (especially for potential care requirements etc) and keeping certain living expenses down eg house prices will help.

Kaletsky is right but dim members of the public led like sheep by those with their own agendas rather like to have a public whipping boy so have picked on the banks. The elderly need more medical care so obviously are going to be more expensive if you have a free NHS where most elderly have not paid for BUPA etc.

There are other models than state funding for the old however. Many many more countries around the world have family looking after the old not the state. We may come to a point where we have to move to that if we fun out of funds for the state to pay universal state pensions for the old and it is universal state pensions which most pensinoers live on and the guarantee labour brought in which said if you're feckess and save nothing we will make your income up per week to X when you are old. If you saved for retirement and your income from your pension is at X then you gain nothing extra which always struck me as rather unfair on those who had saved.

Summary from BBC news website:

The Spending Review has seen the schools budget in England emerging relatively unscathed from the chancellor's axe.
In contrast, universities face a much more uncertain future.
The teaching budget is going to be cut by 40% and as some subjects, such as science and technology, are protected it's likely to mean even deeper cuts elsewhere.
Arts and humanities courses could end up with more or less all their state funding for teaching withdrawn.
The University Alliance warned against "sleepwalking towards a privatised university sector"

Am I the Rhubarb from the olden days?? Erm, not sure what you mean so I guess not.

Iggly don't you worry you might be putting a lot of pressure on your son? I think knowing that your parents sacrificed having a second child in order to put you through a private school, and then moved into a small flat so you could have a house could make someone feel a bit, well, responsible? I'm not sure I would want to live with that on my shoulders.

Why would I mention anything to DS about a second child
Later on we have thought of adoption......

The downsize would be fine for me if I thought he could have space for family if he wanted one. Obviously any sibling would be equal share as well. I think we all want the best for our children.

With schools I think he may have more pressure in a large class room as he can be different (as are all children) but is accepted by his peers as they have been with him for 2 and a bit years now.

My lot will inherit our house eventually, until then the door will always be open. But it is their father's and my home, bought and loved with years of work.
We won't be paying their uni fees, either. They will get a loan like everyone else.
They have had a charmed and privaledged childhood with experiences to help them through life and a great education. The rest, as it was with us, is up to them.

Slacking9to5 : myself and DH have had very good education and hold professional degrees we still have been helped financial by parents with deposits (yes we saved as well everything we could as well), no holiday for 7 years worked whilst at Uni. The irony as I have said is years later we could maybe afford more children (if we can move to somewhere with good local schools).

Free education is crucial, and it is so sad that you are not having another child because you can't trust the local schools, Iggly.

It makes sense in families to pool your resources IMO, so we have a family fund that each earning member pays into every month. We have used it for holidays, and roof repairs (for my daughter) so far, but it's also meant to cover emergencies. If my youngest child was not able to support himself through university as the others did (because he will have to pay the exorbitant fees), that money would be there to help him out.

I actually think myself and DH are lucky. It would have been nice to be born a few years earlier but fine. Lots of our friends are in far worse situations.

If I had a big house and my kids and their families were struggling in a smaller one, I would probably suggest a swop. But something like that would depend on us all living in the same area.

Most parents work hard to provide for their families - everything we have, we share as the children are growing up. What I don't understand is why this changes as the children grow up. When does it become 'my' money and 'your' money?

Solopower thats lovely . We get some help with the fees from family as well as reduction from school .

Me and Dh were exhausted this year and losing it........ so family gave us some money for short break in France (hence first holiday in 7 years).

My personal take on this is that it is a lot about getting older people to liquidate their assets. Money in the bank will mean that they will have to pay for their own care. Forcing people to sell their homes to pay has fallen out of favour so this is the stealth way of doing it.

Few people have the expertise to liquidate and then adequately hide cash assets. The amount of people that would actually take this up is very very small and would make sod all difference to the housing stock on the market -no one can afford to buy anyway. There is no housing stock coming onto the market because people cannot afford to sell. That is the case for older people with no mortgage -perhaps they don't all want to live in McCarthy Stone homogeneous retirement flats - good for them

Wait and see when you are old and have worked all your life just for someone to tell you you should be living somewhere more 'convenient'

I think what I feel is rather than trying to persuade older people to move into smaller houses, younger people should maybe concentrate on thinking more in terms of their own children, and how to help them.

As power in Western societies is normally held by people in their 40s - 60s, presumably anyone over the age of 40 has helped to create the problems we face now, either by voting for the wrong parties or living on credit or being feckless or selfish - whatever. I don't think we need to blame ourselves, as most of us just didn't know any better, but we all have a duty to try to put things right for future generations.

It's too late to do anything about those in their 70s and 80s - some of whom are very wealthy, but others who are really poor.

"younger people should maybe concentrate on thinking more in terms of their own children, and how to help them. " That's beautifully put.

"we all have a duty to try to put things right for future generations." This is a difficult one, we are living longer and needing care more often. If the house bubble bursts there is no equity to pay for that care out of the proceeds of the home (if it is not done by family). But, in contrast if the young are having less to pay on rent/living they could pay the short fall in taxes (still need to pay for their own pensions as the state one will diminish). All I know is I want to cover as many eventualities as I can for my child/children.

Well, Pinky, I think the UK government should provide free personal care for the elderly as they do in Scotland. Along with a free health service and education.

But, TBH, I don't see the logic of 'I've worked hard all my life and saved up my money so why should I pay for my retirement home'.

Firstly, most of us work hard, but few get rich and most people just can't save up huge nest eggs. Secondly, the post-war generations really have benefited from social conditions that made it possible for some of them to amass huge amounts of money, so it's right that they should now pay something back and contribute towards the cost of their accommodation.

And why would you expect not to pay for your housing, if you can afford it, just because you reach a certain age?

Either that, or make all care homes free for all old people. Then the rich ones would be able to leave all their money and their big houses to their children and the rest of us could pay for their accommodation with our taxes. [hhmm]