Monday, Aug 30, 2010
40 somethings relying on boomers for their pensions
Save our Savers: Why save when you can inherit?
No doubt there will be a tirade of abuse, from one regular in particular, but this article proves the hypocrisy of many 30 and 40 year olds:
Blame the boomer generation for home ownerism and everything else that's wrong yet I still have a right to an inheritance.
Posted by mr g @ 10:16 PM (1512 views) Add Comment
32 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. techieman said...
"No doubt there will be a tirade of abuse, from one regular in particular" paul the other one mr g ;)
2. enuii said...
I'm 40 something and one thing is certain, I'm not pinning my retirement on waiting for my parents or the wifes to die in order to fund my/our retirement. I'm not waiting till I'm potentially 75 to get the man off my back or pay the mortgage off as I'm quite happy with my modest house, modest car and the simpler pleasures in life and therefore quite well adjusted to a modest retirement which is quite achievable.
The problem with this country is that too many people think they are middle class when they do not have the income i.e. they have a middle class lifestyle on borrowed money.
In a way it's a symptom of the selfish and insular lifestyle that has been disguised as 'aspirational', a complete con based on the so called 'american dream' that has driven americans themselves to work themselves dog eat dog into the ground over the last 40 years.
Anyway I for one would rather go without than rely on someones death to fund my retirement.
3. mr g said...
Right first time Techie
4. paul said...
Tirade of abuse
(I note that techieman is a boomer too) Hmm. Let's see if this sounds abusive or even like a tirade ...
The boomers' homeownerist wealth heist has continued aided and abetted by government for at least ten years now. It therefore seems reasonable that when those same boomers die, their wealth is transferred back to the people they took it from the first time round. Geddit?
So is that an abuse tirade or reasoned rebuff to a flawed argument, mr g and techieman? If you think the former, I'm afraid your in minority company on this site.
5. Mr G said...
@Enuii
A mature and sensible comment if I may say so and one which also reflects my approach to life.
My reason for posting this article was to comment on the appalling situation which we have got ourselves into through greed, the "I want it and I want it now" culture and simply living beyond our means.
IMHO I believe that members of all groups over the age of 30/35 are equally guilty of creating this mess.
6. techieman said...
am i a boomer ? i thought i was gen x myself. i think the fact is paul you seem stymied by the following argument. i was born at the wrong time therefore i have been robbed of opportunities by the boomers. not only that i have to pay for it.
you are probably right. but you should spend a bit less time complaining and a bit more seeing how you can use the fact that boomers are n longer net consumers of stuff to your advantage. you seem like an intelligent young man, so go and read some of dents work and stop feeling sorry for yourself- jeez get over it!
.. and it was a little joke or did the boomers / gen x have a monopoly on humour too?
7. mr g said...
@Paul
Lets see if you get this:
Like Enuii I lead a modest lifestyle and I resent being accused of greed and all the "homeownerist" garbage, not every boomer is the avaricious barsteward that you think they are.
As I've said before, I have always considered my house to be my home, ie somewhere to live, not an investment or cash machine for withdrawing equity. I've worked f**king hard to pay my mortgage and raise a family and in doing so, not gone on foreign holidays or p*ssed it all against the wall, so just accept that there are some decent hardworking people in the boomer generation.
8. This comment has been removed as it was found to be in breach of our Blog Policies.
9. Crunchy said...
2. enuii said...'Anyway I for one would rather go without than rely on someones death to fund my retirement.'
That's not very middle class. lol
Why anyone aspires to be any class confounds me.
10. enuii said...
Pauls statement 'the boomers' homeownerist wealth heist' is appallingly generalist as many of us just live in our houses and get on with our lives. I think a lot of people on this site are here because there is something drastically wrong with this country and indeed the whole western/american economic system and the current house price anomalies are a visible symptom of that. All this boomer/generation x vs the rest crud is just that, it is divisive rubbish and it is insulting to generalise by stuffing people into boxes based on their birth year.
Human nature is the same across generations, there are good, bad, selfish and selfless people of all ages and getting up so blatantly up-tight about one generations so called advantage over anothers is generalising to such a point as to be missing the point completely!
11. Crunchy said...
6. mr g
I agree with you, but let's face it.
I bet you wouldn't swap your place in the generation pool with the next. It's all been geared up.
Your generation has been manipulated as much as the next generation, but have felt the soft side of it so far.
Winston.
12. enuii said...
Just before I go to bed I also hate this 'homeownerist/homeownerism' tripe pedalled by certain posters which is again generalising to such a point that it spoils the argument and thus tars everyone who owns their home or pays a mortgage on one with the same brush.
I'm off now before a turn rabid like some other posters!
13. enuii said...
Swap 'a turn' for 'I turn' in previous post - over and out.
14. Crunchy said...
4. paul said... 'The boomers' homeownerist wealth heist has continued aided and abetted by government for at least ten years now. It therefore seems reasonable that when those same boomers die, their wealth is transferred back to the people they took it from the first time round. Geddit?'
All money goes back to government, well their national debt anyway. Now, who are they endlessly endebted to?
Hope that helped paul.
15. mark wadsworth said...
Mr G, that's the beauty of Home-Owner-Ism - as long as more than half the population think that they are benefitting, the game perpetuates itself.
Clearly it is better for a young person to be able to afford a nice house now out of his own savings without relying on BOMAD, but if the alternative is inheriting something bigger later on, that's a consolation at least. Problem is, a lot of the parents will have MEWed everything away so some people end up with nothing.
16. tenyearstogetmymoneyback said...
A few years ago I signed as the witness for the sale of a friends fathers house who had had to go in a care home.
A quick calculation showed that the proceeds of the house would pay for about 5 years of car home fees.
I asked what would happen when the money ran out and the answer was that the council would then start paying
but would move him to somewhere cheaper.
On a happier note, with increased life expectancies many peoples parents might still be alive when their children retire :-)
17. paul said...
but you should spend a bit less time complaining and a bit more seeing how you can use the fact that boomers are n longer net consumers of stuff to your advantage
Yes, well you're talking about inheritance then ... which is the whole point of the article, isn't it? How else can we use it to our advantage? Re-appropriate the wealth by force?
enuii, it is a heist on a very large scale between generations - for example if you understand the wealth appropriation effects of inflation, you should be able to see the transfer of wealth from the young to the old which is being desperately clung on to by older generations right now.
For example, look at the boomers' braying and hooting around the proposal to re-align CGT ...
And who's complaining? Sure I'm not happy about it along with most younger people (ask the ones facing the dole queue right now with first class degrees) but I have plenty of other issues I can assure you!
18. str 2007 said...
Even if there is currently a potential inheritance one would be stupid to rely on it as 5 years of nursing home fees will all but wipe out the value of a house.
19. techieman said...
How else can we use it to our advantage?- not talking about inheritance at all.you waste your time in reading about how the boomers have f*cked you- when life is full of opportunities within the cycles.
Paul - yes you are right in what you say - mr g is, i think taking what you say as an insult to them - which i doubt its meant to be. as you are merely making a generalisation. every generation contains a spectrum of personalities. i dont have a problem with your point - its just you need to ask the question what can i do about it? how can i use it to my advantage? its in the places that answer those questions that you need to look. its not easy and it does take time. step back and think. you really are missing something here.is reading willets really going to help you?
without affluent (grand)parents there would be no bomad. as i said you seem an intelligent guy - but all this bashing an older generation for being born when they were and all this having a go at the boe is wearing a bit thin. really its a waste of your own energy, but if thats how u want to waste it i suppose thats your privilege.
enuii post is how i thing the vast majority of people of gen x think. i agree with his sentiments - although realy thats not the point is it.
20. hpwatcher said...
If the country had been run well, we wouldn't have disagreements like this.
21. Crunchy said...
I think you are all barking up the wrong tree. That's how they get away with and have done for a long time.
22. Stevie Dee said...
My comments are being censored, what happened to freedom of speech and expression. I'm entitled to express my opinion in this forum. It's my basic human right. :)
23. Urban Bear said...
This story shows how impoverished the younger generations must be, and how blindly optimistic they must be to expect any inheritance to top up their pension. I have an idea why some must hope for an inheritance, given I struggled early in my career, so could not afford to buy a house or start a pension, for many several years.
The problem is any remaining value in a property will effectively decline and probably get rapidly consumed by a parents living cost or nursing home, given many pensioners do not have enough of pension, due to the damned fraud of inflation and the collapsing Ponzi welfare state.
My parents, who were prudent and have good pensions, may not pass me an inheritance, given one of them already cannot fully care for themselves without extra help, so I would not be surprised if they end up in an old peoples home and the remaining value is consumed.
The only children who are likely to get an inheritance are those whose parents die in their home, or whos' parents were wealthy enough to not have to sell everything to pay care home fees.
24. Stevie Dee said...
My father is still fixing his price on zoopla!
25. uncle tom said...
The disbursal of property wealth after the owner dies is of some economic significance, and significance when determining sustainable house prices; yet any attempt to analyse it reveals a whole string of eroding factors that prevent all but a little getting back to FTBs.
1) Not all property wealth is left to individuals; bequests are an enormously important part of charity funding.
2) The generation who are currently dying are those who spawned the baby boom, by having, on average, more than two children. This factor will tend to neutralise as the baby boomers themselves start to die, but it is currently a significant dilution factor.
3) People are living longer, and the number who are actually dying is statistically depressed to a significant degree.
4) The generation who are currently dying are much more likely to be living in social housing than the population as a whole. This is another factor that will correct when the boomers start to die in significant numbers.
5) Many people end their days in care homes. These are enormously expensive. On the other hand, many people also have savings and other personal assets. My best guess is that on average, these two elements cancel each other out.
6) Some old people indulge equity release schemes. These are not as commonly used as some once predicted, but they are nonetheless a signficant factor.
7) Many old people downsize their homes, or move to cheaper districts, to liberate capital. This is much more common than equity release schemes.
8) Some old people leave not only a house, but a raft of unpaid debts. Funeral costs have to be met, and are not insignificant.
9) People who inherit property are most likely to be in their fifties. They are likely to have some debts, have a mortgage to clear, have a pension that is not fully funded, and have some personal ambitions to satisfy; before the next generation gets a look in.
10) In the more expensive parts of the country, quite ordinary homes are liable for inheritance tax.
Inheritance is a very ill-spread element to the economy. Many people never inherit anything, while others find themselves to be the last survivor of a wealthy family that is dying out.
- Overall, I don't believe the trickle down effect of inherited wealth will ever contribute more than 10% to the sustainable value of a house.
26. uncle tom said...
Under 7) I should have added that that many people also move to a rented flat for their final years, liberating their home equity for everyday spending.
27. letthemfall said...
I've always said that the real issue is about inequality, and this stems to a great extent from the tax system which allows excessive wealth to accrue to a fairly small section of the population, a system effectively maintained by those who benefit, justified by specious arguments around the vague notions of aspiration and wealth creation.
The focus on an age group (a pretty broad one by some definitions) is a red herring, other than the trite observation that those who are older will be on average better off. In fact the baby boom period was not 20 years following the War at all. There was a brief spike immediately after 1945, but the real step up in birth rate was the late 60s and through the 70s. (There's a graph on the ONS site somewhere if you can find it.) Hence many of the anti-boomers may well be the real boomers.
But as I say, generation is not the true issue (if I were a conspiracist I would say this is a myth put about by the ruling classes): it's the unequal distribution of wealth. What takes my breath away is how the country is so much more affluent than it was, yet so much of its citizenry has become steadily poorer. The small coterie of rich love to portray themselves as the wealth creators, the rest as spongers. Pull the other one I say.
28. techieman said...
ltf : re your comment re the wealth gap you will prob remember this :
29. uncle tom said...
"but the real step up in birth rate was the late 60s and through the 70s. "
No. The all-time high was 1947, with a second peak that was almost as high in 1964. The birth rate then declined every year until 1977, before picking up a little. Even at it's next peak in 1990, it was still 20% below the all-time high.
Check here: http://www.statistics.gov.uk/statbase/expodata/files/5349260371.csv
30. mr g said...
@Techieman "mr g is, i think taking what you say as an insult to them - which i doubt its meant to be."
That's exactly right and I'll give Paul the benefit of the doubt.
I couldn't care less about the value of my house, it's my home, first and last.
However, I do care passionately about house prices in general as I see the current level as being obscene. If the numerous articles we see stating that FTB's will be in their 40's or older before they can afford to buy are true, there is, to paraphrase Shakespeare, "something rotten in the state of Britain"
When we married in 1972 probably 95% of young people aspired to home ownership (not to be mistaken with "home-owner-ism" by the way) and were able to achieve that goal due to house prices being realistic and stringent application of lending criteria, a situation I would be delighted to see today.
I, like the majority of my generation, have acted responsibly and to blame today's ills on us is symptomatic of the victim culture prevalent in many people today when things go wrong or they can't have their own way.
31. letthemfall said...
Grim stuff techieman
uncle tom, looks like it really got going in 1960. So in fact the main boom (easier to see if you plot it) was from the late 50s to early 70s. Interesting that the birth rate picked up during the War (the thought they may die tomorrow). But the figures do show that the boom in birth rate was not just a steady 10 or 20 years following the War. Also a mini boom during the 80s.
32. uncle tom said...
"Interesting that the birth rate picked up during the War "
Some people reckon the blackout had something to do with it.. ;-)