O/T Budget.....new threshold for NI

I have no way of commenting if the situation you relate is typical. I didn’t think I was living in an ivory tower, but perhaps I am.

 

Thing is pal, I'm not from the boomer generation. Child of the 80's/90's here who didn't get offered free university etc. I did a YTS for 75p per hour in the 90's and worked my way through life from then.. Hundreds of applicants for every job. It's far easier to get employment these days and you certainly wouldn't earn the equivalent of 75p per hour for the pleasure.

Ps. If you read my post about young uns and cars, it was an observation finished with but it's far too easy to blame a generation so you are taking it completely out of context.


Like my post said. We have always had the rich and poor, through every generation, nothing has changed apart from the rich getting richer.

 

Fair enough

 

Uni was free in the 90s wasn't it?

I'm not sure how an example of one job in the 90s can be extrapolated into an implication that employment is either easier or better paid now. Real wages have been on the decline since the 90s.

As for the car observation, what was the point in it if you weren't trying to imply some form of generational fault?

 

The cars...It was an example of how easy it is to point the finger at a small proportion of a generation.

Similarly to the view that all those in the so called baby boomer years all had it brilliant.

So many variables between generations, that could he argued as to who had it better..

Look at the impact of the loss of the mining, steel and glass industries in places like Barnsley through the boomer gen.

I just think it is impossible to blame a whole generation based on what is always the case of actions of the few, rich v poor etc..

 

Fair points, however I think there are key differences which have to be acknowledged.

 

On the uni thing.. A student Grant at the time I was old enough was purely a viz character, replaced with loans..

 

Tuition fees were introduced in 1998. Student loans from 1989 - although I didn't get a loan (I graduated in 93), that was the start of grants being reduced in favour of loans. So I got a grant (~£600 for my last year!) but not long after me they didn't...

 

I was meaning tuition fees were free, £27k for a degree now...

 

Something has changed though. The rich getting richer has had a gravitational pull on all property prices.

Cards on the table, I’m a boomer (just). So I’ve lived through the recessions in the 70’s (at school) 80’s (comfy job) 90’s (redundancy) so I didn’t get back to my 1990 earnings level till about 2004, the 2008 recession didn’t touch us, and the current one won’t either.

So I grew up on an ordinary working class street where most families had a ‘decent’ life on a single income, but my mum worked 2 jobs to get us holidays as it’s what she wanted.

there have been times I’ve worked 3 jobs, but I think it’s more luck than hard work that means I can afford to retire whilst I’m still fairly young and fit and that by the time I get my retirement pension I’ll be getting much more than someone working for NMW.

My kids will all buy their own homes, and have decent jobs, but they’ll never be as comfortable in retirement as we will be.

 

Narrowing this intergenerational divide down to house prices Vs income is over simplistic. There are many different issues that separate the current generation from those born in the 50s and early 60s. Some are good and some are bad. In many respects it was easier to focus on what was important for the post war generation as there was less choice of what to spend your money on and fewer temptations. Package holidays arrived for the masses in the mid 60s and before that a week or two at a UK resort was the norm. Internet, mobile phone all essential nowadays did not exist and many people did not even have a landline and relied on the nearest phone box if they needed to make an urgent appointment or something. Food was not as cheap or plentiful as many here seem to think but we ate well thanks to the frugal nature of parents who survived WW2 rationing and knew how to make decent meals from scratch using cheap ingredients. Convenience food were few and far between . It is fallacy to say that for most families with one or two kids could expect to have a higher standard of living on a single wage. Yes house prices were lower relative to income but that fact does not consider that interest rates were far higher peaking at around 17% I recall so over 25years it swallowed up a sizeable chunk of disposable income. Few had or could even afford to rent a colour TV. Free HE was a major benefit and many took up the opportunity to become more socially mobile. My wife, daughter of a disabled miner forced to retire early, grew up in a rented terrace on Princess Street. Outside WC tin bath in front of the range ,(albeit that was exceptional even then) She passed her 11 plus went to Broadway then college and became a teacher.
Now here's the thing. The current generation have all the disadvantages at the present moment but many will benefit when they inherit the wealth accrued by their parents during their working lives. In the meantime they will struggle. The BIG problem though is that only works where the parents own their own house etc. It is also the case that the same parents have been in the position to give their kids a 'leg up' and help them .. pay for driving tests, sometimes a car and even house deposits. Those who parents not so fortunate who,say, live in rented property and have few assets and low pay do not get that assistance. The result is that the gap between rich and poor, the haves and have nots increases each generation. As it happens both my daughter and son in law benefitted from parental support at key times. Together with a good work ethic they, as a family, are considerably wealthier and more secure financially than we were at the same stage in their lives we were. I don't dispute for a moment that times are hard for many now but many challenges existed then as they do now it is just that they are different. At on time my wife and I even moonlighted selling seafood (remember Kershaw's?,? in clubs and pubs to earn a bit of extra cash even though she was a full time teacher, as I was made redundant when a commission only job I was temporarily working in ended when the firm went bust overnight. I was also working as a musician and that as anyone will tell you is very precarious and was pretty poorly paid.
All I am saying is there is no clear cut answer to which generation had it harder. Overall the stistics show each generation tends to be better off financially but that does not betellbthe whole story by any stretch.

 

House prices are crazy especially the closer to London you get. Supply and demand one of the biggest factors. Interestingly again the so called experts who get paid a fair whack to predict trends got it so wrong about the impact on the pandemic....Analysts predicted that house prices would fall approx 16% as a result of the pandemic. In fact they increased by 9.8%.. If my analytical predictions were that poor at work, I'd be out of a job. Must be the same analysts they use for predicting referendum results and elections.

 

I was looking at a house yesterday. It sold in 2019 for £250k and came back on the market yesterday priced now at £440k. Now, I don't know what work was done to it in those 3 years, but that is a little more than 9.8%...

 

There is some validity in comparing house price inflation. over the past 4o years but some on here are missing an important fact. As a proportion of income, mortgage payments are actually lower than many periods particularly mid 70s and 1980s where interets rates actually hit a wopping record 18.63% in october 1981. For many years the rate was 7-11% p.a.
The actual purchase price of the house is far less relevant than how much a month you have to pay to service your loan especially as a proportion of net income . As we know on a 25 year mortgage even small increase of 1% can hit people on the limit . Imagine what none fixed rates increasing several percent within a decade can do!
Yes house prices nowadays are high but the lower amount you repay per month for mortgage repayments compensates substantially. also many people had endowments designed to pay teh capital on maturity and made ineterst only paymenst but teh endowment market was a con as the terminal bounus was not guaranteed and many people found the amount paid out fell short of the outstanding capital and had to remortgage.
It is a bit like buying a new car at a low interest rate compared to borrowing money from a bank at high interest rate for a second hand one only worse because the mortgage term is over many years so interest often ended up being more than the prinicple sum borrowed.

 

And the deposit?
A 90’s mortgage for a £50k house often demanded a deposit of £0.
The same house today will cost £250k or more so your young buyer has to find a deposit that’s greater than the average annual income.

 

Well despite the low rates the current proportion is on par with where it was for the majority of the 80s. Additionally you're selectively comparing the worst times that generation faced to the best times this generation is going to face, as interests rates are at historic lows and are only going to go one way, and as they go up things will become ludicrous.

 

We bought on Park road in 1990 and sold in 2012. We had DG new roof and updated GasCH in that time we lived ther and valued at 120-130k we bought at around 60k so your idea of a 5x increase is not strictly accurate as it did not even take into account inflation. In many areas of the country house prices have not risen anywhere near the amount you claim and the stats are distorted by London and SE prices.

 

We paid £43k for this in 2000, current value £275k

I know we bought cheap (deceased estate) but this is in line with other properties I know of people who’ve bought / sold over similar periods.


Oh and if I was still in the same job I did in 2000, my salary would have increased approx 20% at most.

Which brings us to the cause of house prices outstripping wages, wage stagnation created purely so that the balance of the worlds wealth has increasingly moved to the super rich. This of course (back to my first post) is what drags up the value of property, as those with more money than they could possibly ever spend ‘invest’ in property, which inflates all property values.

 

Interesting comments, Tekky. Thing is, NI only kicks in at a certain level (raised by Mr Sunak this week) and applies at a graduated rate thereafter. I struggle to see an argument as to why those reliant on pension income shouldn't pay it. Those who only have the benefit of the state pension probably wouldn't incur it?

The 'paper millionaire' point raises interesting issues too. Having both lost our surviving parents in 2020, Lady Kaht and I benefitted from a share of their estates, the majority of the value of which was contained in their houses. Our parents were children during the war and I was one of five; Lady Kaht one of four. I can't imagine how difficult it was for our parents to raise such large families (acknowledgements: the Catholic Church) in what were less prosperous times. I kind of wish that our parents could have had the benefit of some of the wealth they eventually passed to us during what must have been difficult times. But you'd need a time machine for that. But given the age in which we live, and the power of IT, can it be beyond us to devise a way to smooth out the distribution of wealth and resources, and the ebbs and flows of our financial lives? The universal income idea is worthy of much more investigation. But of course it's anathema to a population which is conservative with a small 'c' (to say nothing of a large one!).

 

'Unfortunately', we inherited absolutely nothing . I was estranged from my father (my mother died) when I was 13 and my stepmother -long story - and her family would have inherited his house and everything. As I said my wife came froma very poor background and her dad died aseveral years before her mother did (aaged 80) and who live in Buckley house. She lived on a miner's widow pension + state pension so , as you can imagine there was nothing to leave once funeral expenses etc were covered . Basically, I and my better half have what we worked for (with some luck in decision making along the way)and I have no issue with that. My daughter and son in law will benefit when we 'pop off' as will our grandaughter when they do. That IMO is one of the causes,in spite of any 'dampening effect' of death duties, inheritance taxes creating an increasing divide between haves and have nots.