Work til you drop

[Yellow Fever 3,810]

15 minutes ago, ricardo said:

I had mortgages from 1968 to 1998. The rates may come as a shock to some.

https://www.listwithelizabeth.com/mortgage-interest-rates-historical-perspective/

Yes. But if you recall there was before even MIRAS tax relief on interest. I can't recall what it was called ... open something.

Simply you didn't pay the full interest (or claimed it back against tax).

[Fen Canary 851]

Those claiming that they had it harder because interest rates were higher are talking nonsense quite frankly.

Their house would have cost around 3 years salary, which in todays money would be around £90k. A 20% deposit on that is £18k, leaving a mortgage of £72k. That amount on a 25 year term at 15% means repayments of around £215 a week.

Compare that with today, where the average price is now £290k (according to Google anyway). A 20% deposit of £58k leaves a mortgage of £232k. On a 25 year term at 4% that means repayments of £280 a week.

Therefore even at the peak of the interest rates, the weekly repayments were still less than those faced by youngsters today. The deposit was also 6 months money as opposed to 2 years, and they weren’t paying record rents while trying to save it.

I’m surprised the youngsters aren’t going all French and smashing the place up, they have every right to in my eyes 

[dylanisabaddog 4,955]

3 hours ago, Fen Canary said:

Those claiming that they had it harder because interest rates were higher are talking nonsense quite frankly.

Their house would have cost around 3 years salary, which in todays money would be around £90k. A 20% deposit on that is £18k, leaving a mortgage of £72k. That amount on a 25 year term at 15% means repayments of around £215 a week.

Compare that with today, where the average price is now £290k (according to Google anyway). A 20% deposit of £58k leaves a mortgage of £232k. On a 25 year term at 4% that means repayments of £280 a week.

Therefore even at the peak of the interest rates, the weekly repayments were still less than those faced by youngsters today. The deposit was also 6 months money as opposed to 2 years, and they weren’t paying record rents while trying to save it.

I’m surprised the youngsters aren’t going all French and smashing the place up, they have every right to in my eyes 

Yes, you've hit the nail on the head. The house I bought for £83k in 1997 would now cost £350k. When I parted company with my wife around 10 years ago I paid £150k for a house which I could now sell for £275k. As you say, what matters is the proportion of income spent on housing. That is now way higher than it has ever been before. The young couple who rent the house next to me are a primary school teacher and an industrial freezer/aircon engineer. Those are well paid jobs by Norfolk standards but they can't afford to buy a home. Ten years ago people in similar circumstances would have had no trouble whatsoever. 

The big problem for the country is that the huge amounts now being spent on housing means a significant reduction in the amount that younger people have available to spend on goods and services which produce VAT and income or corporation tax. The young have a much reduced lifestyle compared to me at the same age but an even bigger issue is the reduction in tax take to the Treasury. 

What is really disappointing is that my children are now in their 30's and don't enjoy the same standard of living as me at the same age. I had hoped for more for them. What really astonishes me is the number of people of my generation who seem to take delight in the financial plight of younger people. 

[Nuff Said 5,153]

3 hours ago, dylanisabaddog said:

What really astonishes me is the number of people of my generation who seem to take delight in the financial plight of younger people. 

On similar lines, the attitude (again largely of those over a certain age) of those who seem to think 1) the continued surges in house prices are somehow a good thing, and 2) that they are deserving of a big reward for simply buying somewhere to live years ago, that they are in some way “investors”.

Edited February 7 by Nuff Said

[Worthy Nigelton 1,058]

3 hours ago, dylanisabaddog said:

Yes, you've hit the nail on the head. The house I bought for £83k in 1997 would now cost £350k. When I parted company with my wife around 10 years ago I paid £150k for a house which I could now sell for £275k. As you say, what matters is the proportion of income spent on housing. That is now way higher than it has ever been before. The young couple who rent the house next to me are a primary school teacher and an industrial freezer/aircon engineer. Those are well paid jobs by Norfolk standards but they can't afford to buy a home. Ten years ago people in similar circumstances would have had no trouble whatsoever. 

The big problem for the country is that the huge amounts now being spent on housing means a significant reduction in the amount that younger people have available to spend on goods and services which produce VAT and income or corporation tax. The young have a much reduced lifestyle compared to me at the same age but an even bigger issue is the reduction in tax take to the Treasury. 

What is really disappointing is that my children are now in their 30's and don't enjoy the same standard of living as me at the same age. I had hoped for more for them. What really astonishes me is the number of people of my generation who seem to take delight in the financial plight of younger people. 

So refreshing to hear someone from an older generation actually be truthful about the plight of millennials and gen z. I'm an older millennial and am a high earner as is my wife, so have managed to buy a nice house in a good area, but the reality for so many of my friends is markedly different and it's getting worse. To keep inflating asset prices might be popular with older voters but it is storing up a huge problem with the young.

[Yellow Fever 3,810]

7 hours ago, Fen Canary said:

Those claiming that they had it harder because interest rates were higher are talking nonsense quite frankly.

Their house would have cost around 3 years salary, which in todays money would be around £90k. A 20% deposit on that is £18k, leaving a mortgage of £72k. That amount on a 25 year term at 15% means repayments of around £215 a week.

Compare that with today, where the average price is now £290k (according to Google anyway). A 20% deposit of £58k leaves a mortgage of £232k. On a 25 year term at 4% that means repayments of £280 a week.

Therefore even at the peak of the interest rates, the weekly repayments were still less than those faced by youngsters today. The deposit was also 6 months money as opposed to 2 years, and they weren’t paying record rents while trying to save it.

I’m surprised the youngsters aren’t going all French and smashing the place up, they have every right to in my eyes 

Well said Fen.

There is an 'affordability ' index which takes into account (or tries too) some of these factors. 

You can start here -

https://www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/housingaffordabilityinenglandandwales/2022

[TheGunnShow 5,966]

8 hours ago, Fen Canary said:

Those claiming that they had it harder because interest rates were higher are talking nonsense quite frankly.

Their house would havExactly, e cost around 3 years salary, which in todays money would be around £90k. A 20% deposit on that is £18k, leaving a mortgage of £72k. That amount on a 25 year term at 15% means repayments of around £215 a week.

Compare that with today, where the average price is now £290k (according to Google anyway). A 20% deposit of £58k leaves a mortgage of £232k. On a 25 year term at 4% that means repayments of £280 a week.

Therefore even at the peak of the interest rates, the weekly repayments were still less than those faced by youngsters today. The deposit was also 6 months money as opposed to 2 years, and they weren’t paying record rents while trying to save it.

I’m surprised the youngsters aren’t going all French and smashing the place up, they have every right to in my eyes 

Exactly, as I'd said earlier, the last time house prices were, relatively speaking, so high that they were nine times average salary was the 1870s. Interest rates might have been higher in the 1970s, but the basic price was far more affordable.

The real stat here is house price (or indeed rent, for that matter) relative to salary levels.

EDIT: In fact, you can go further. There's been some bellyaching in some press quarters about the younger generation not hitting socially prescribed milestones at the same time - they're getting married later, they're having kids later, they're not saving into pension funds....

And the problem is simple, they can't bloody afford it.

Edited February 7 by TheGunnShow

[Yellow Fever 3,810]

4 hours ago, dylanisabaddog said:

What really astonishes me is the number of people of my generation who seem to take delight in the financial plight of younger people. 

There are some well known phrases often heard from the elderly - 

'It was better in my day' or alternatively 'We had it harder in my day'. You can also add 'The young need to 'man- up' and similar - we 'saved' our money. We'll also hear about all the frivolous mobile phones (but somehow ignore the smoking  / drinking / pub culture) to fritter money of previous generations.

Even the Romans had identified these trends! Nothing new under the sun.

Of course, objective reality often tells a very different story.

 

Edited February 7 by Yellow Fever

[TheGunnShow 5,966]

8 minutes ago, Yellow Fever said:

There are some well known phrases often heard from the from the elderly - 

'It was better in my day' or alternatively 'We had it harder in my day'. You can also add 'The young need to 'man- up' and similar - we 'saved' our money. We'll also hear about all the frivolous mobile phones (but somehow ignore the smoking  / drinking / pub culture) to fritter money of previous generations.

Even the Romans had identified these trends! Nothing new under the sun.

Of course, objective reality often tells a very different story.

 

The modern variant peddled by the hard of thinking is "buh Netflux nnn avvocaaaado toast!!!"

These people are so stupid that if you asked them what their favourite colour is I'd half-expect them to say "December".

[Virtual reality 712]

I’m self employed and just finished work on a job that will be entering the rental market next month, in a let’s say less desirable location in the county. It’s a 4 bed mid terrace house and it’s going up for rent for £1600 a month. How can people  be expected to save for their own home or retirement when basic rent is this amount? 

Edited February 7 by Virtual reality

[Yellow Fever 3,810]

For those youngsters (I'll swear I'm still 28 but rather too many of hundreds of extra months) a word as to how we also had tax relief on our mortgages - MIRAS as it was known (before that I think all loans had tax relief but clunkier to claim!). Obviously benefited more the larger loans / incomes. Those where the days! It clearly makes it a little difficult to compare the true cost of borrowing for mortgage between now and then if part of it was pseudo tax free (there were limits)!

Before April 1994, the rate of tax relief given to home-owners was 25 per cent. That month it was cut to 20 per cent, and a year later it was reduced again to 15 per cent. A reduction to 10 per cent announced in Mr Brown's July 1997 Budget took effect in April 1998.

Halifax figures for a £60,000 interest-only borrower show that while Miras is now worth £17.37 a month, in the early 1990s it was worth £85 a month. This had fallen to £41 by the start of 1995.

 

 

[Rock The Boat 1,332]

On 06/02/2024 at 15:10, wesforprimeminister said:

can tell what sort of prat you are, obviously never faced any issues or hardships with money, sure karma will do you one day.

You've got at least 40 working years to plan and prepare for retirement. If that isn't long enough then one wonders what IQ level you are sustaining. 

[Rock The Boat 1,332]

On 06/02/2024 at 18:38, Virtual reality said:

There’s always one…

Incredulous that almost every poster thinks their retirement income is a problem that someone else has to solve for them. You have to take responsibility for your own life, make sensible life choices and stop depending on nanny to bail you out. Is it any wonder that indigenous  Brits are falling behind in all measures of success. 

[Rock The Boat 1,332]

On 06/02/2024 at 19:23, Worthy Nigelton said:

My biggest issue with this is that it is not progress. What's the point of living longer if it just means working longer and having all of your unhealthy years in retirement. I'd rather die at 75 but retire at 50, than live until 100 but work until I'm 75. Our governments and the system has failed people if living longer means more work and less healthy free time. If that is the case, a fundamental change in the way society is ordered has to occur, or we should act like the French and start setting fire to things. I really mean it (maybe not the fire part) but if this what capitalism and western culture demands, then civil resistance is the only way and things need to get serious... it is totally unacceptable.

You are quite capable of organising your affaires so that you work until 50 and die at 75.  It doesn't require government intervention. 

[Aggy 758]

2 hours ago, Rock The Boat said:

Incredulous that almost every poster thinks their retirement income is a problem that someone else has to solve for them. You have to take responsibility for your own life, make sensible life choices and stop depending on nanny to bail you out. Is it any wonder that indigenous  Brits are falling behind in all measures of success. 

So are you suggesting we stop giving state pensions to everyone currently entitled to them with immediate effect? 

Edited February 8 by Aggy

[TheGunnShow 5,966]

Yeah, Rocky's just flat-out wrong on this one as that stance really does not take current realities into account. Firstly, it's far harder for first-timers to get onto the property ladder, fewer people can afford to get married, and fewer can afford to have kids. House prices are now nine times the average salary. The last time there was such a serious discrepancy was the 1870s. (And that's before we even get to rent prices).

Secondly, most benefits are paid to working people, not the unemployed, so this notion that people aren't working hard enough is just a cheap gaslighting trick. Tax evasion is a far greater problem which has always cost the UK government many times more than unemployment benefits over a year.

Thirdly, wage increases have not remotely kept pace with the cost of living.

Ask yourself this simple question: if people can't afford to get on the housing ladder despite working full-time, how the heck are they supposed to finance a pension?

The Cost Of Living In The UK vs Wages (swiftmoney.com)

[Worthy Nigelton 1,058]

6 hours ago, Rock The Boat said:

You are quite capable of organising your affaires so that you work until 50 and die at 75.  It doesn't require government intervention. 

Some people are, but most aren't.

[canarydan23 4,060]

8 hours ago, Rock The Boat said:

Incredulous that almost every poster thinks their retirement income is a problem that someone else has to solve for them. You have to take responsibility for your own life, make sensible life choices and stop depending on nanny to bail you out. Is it any wonder that indigenous  Brits are falling behind in all measures of success. 

Incredulous that someone who can't even tie their own shoelaces thinks they're qualified to talk about anything other than Thomas the Tank Engine.

[JonnyJonnyRowe 451]

On 06/02/2024 at 10:58, Worthy Nigelton said:

Looks like the state pension age is going up to 71. You know the private pension minimum age will go with it to maintain a 10 year gap.

If that 10 year gap is maintained then you'd need less money in the pot to achieve your desired annuity, as you'd be taking it later, so the answer is to save some outside of a pension wrapper, for example a stocks and share ISA, to build the £60k you need to cover three years to retire at 58.

[JonnyJonnyRowe 451]

On 06/02/2024 at 22:04, ricardo said:

I had mortgages from 1968 to 1998. The rates may come as a shock to some.

https://www.listwithelizabeth.com/mortgage-interest-rates-historical-perspective/

Right, but the mean average salary today is £33,000 and the average house price is £285,000 - 8.6 times average salary.

The average salary for a manual worker in 1973 was £1981 and the average house price £8,832 - 4.5 times the average salary of a manual worker (I can't find overall average earnings pre-1999)

So clearly interest rates are only one factor here, the ability of people to absorb them is not comparable.

[BroadstairsR 2,186]

The O/P was referencing increases in the retirement age before receiving a state pension.

Perhaps there should be some system devised whereby work should be graded out in line with pension assistance being graded in.

It can be a life-changing shock to many, used to working and used to the work-place environment, to suddenly find themselves with so much time on their hands.  However, others can't wait for the day, so the above suggestion might throw up complications.

Of course, we are back to talking about the State Pension here. Those with private pensions or who have paid into a lucrative superannuation scheme and/or a Pension Annuity plan can go on cruises or take up a hobby of their choosing, travel, fishing, golf, boozing, but they might also need sufficient savings to embark upon such things.

How the French handle the low retirement age with their massive national debt with such ease is beyond me. I don't suppose they have such a vast army of ex-pats as the UK does. People drawing their state pension and spending that money in support of another country's economy.

Edited February 9 by BroadstairsR

[dylanisabaddog 4,955]

28 minutes ago, BroadstairsR said:

 

How the French handle the low retirement age with their massive national debt with such ease is beyond me. I don't suppose they have such a vast army of ex-pats as the UK does. People drawing their state pension and spending that money in support of another country's economy.

Off topic I know but those people still get to vote. I find that slightly irritating. 

[Herman 9,802]

Rents are a killer and a real problem being stored up for a future day. What happens when generation rent hit pension age? 

Does anyone have any data of rental costs pre-Thatcher? 

[DraytonBoy 159]

The French state pension system is very complicated, depending on your job and when you started work your pension can kick in from age 50 onwards. Last year the pension starting age for most industry sectors was increased but the latest age (67) remained the same. How powerful your union is within each sector also has a big effect, someone working in a train ticket office can retire at 57 whereas an ordinary office worker or a shop worker will have to wait until 67. 

[dylanisabaddog 4,955]

4 hours ago, dylanisabaddog said:

Off topic I know but those people still get to vote. I find that slightly irritating. 

Sorry all, I was trying to quote @Herman

See his post 2 back

Baby boomers have just started to die and will have all but gone in 20 years. That's an awful lot of inheritances which will ease the problem for some. But you make a very good point. Some people are currently spending half their income on rent and when they reach pension age their income will halve. 

Edited February 9 by dylanisabaddog

[Foxy2600 305]

3 hours ago, dylanisabaddog said:

Off topic I know but those people still get to vote. I find that slightly irritating. 

And rushing back to use the NHS....