Am I Being Unreasonable To Feel Seething Resentment Towards Those Who Profited From The House Price Bubble

[dances with sheeple]

15% of my salary went into my final salary pension plan for 31 years. Does that mean I am living off the backs of others? I agree with you about house price to income multiples though.

Well,all investments are earning (hopefully) off someones work, someones labour? Most likely guys in suits were living off the back of you?

[campervanman]

Yes if you get say 30% for 20 years. Defined benefit is there because it doesn't add up. If it added up you'd get defined contribution.

edit: i'm putting in 15% but unfortunately for my generation they want my pension to add up. What a shame for me.

So as a greedy boomer I should have been saying to the actuary who assessed the scheme and passed it as being in surplus every year until 2001 that he was talking ****** then?

[bmf]

So as a greedy boomer I should have been saying to the actuary who assessed the scheme and passed it as being in surplus every year until 2001 that he was talking ****** then?

No I'd agree that is not your bad. That is the time you worked in. A time where thoughts of the future were met with cries of "who cares". Even if it was involuntary if you are getting a much bigger pension out than you put in (accounting for investment returns of course) you are living off the backs of others. No judgements on whose fault it is, just a simple formula where x is greater than y.

[bmf]

Well,all investments are earning (hopefully) off someones work, someones labour? Most likely guys in suits were living off the back of you?

Yes, and that's fine. So long as you are not running a pension scheme where early entrants were promised high returns that subsequently cannot be met and the shortfall is made up by later entrants. I think there is a name for this kind of scheme.

[campervanman]

Yes, and that's fine. So long as you are not running a pension scheme where early entrants were promised high returns that subsequently cannot be met and the shortfall is made up by later entrants. I think there is a name for this kind of scheme.

You may have noticed that the old age pension age has been increasing and that my generation are the first who will be receiving it at a later age then our parents and their parents when they retired. If it's any consolation, my company final salary pension is now being based on CPI and not RPI so will devalue yoy with inflation also.

[bmf]

You may have noticed that the old age pension age has been increasing and that my generation are the first who will be receiving it at a later age then our parents and their parents when they retired. If it's any consolation, my company final salary pension is now being based on CPI and not RPI so will devalue yoy with inflation also.

Really? How terrible for you. So at some point in the future young people who will not get anything like your pension will stop subsidising your unfunded pension. *wipes tear from eye*

Of course much later they will have a worse pension than they would have as part of what would have gone to them is being siphoned off to backfill absurd pensions from the past. Perhaps when they are 80 they can print out this thread and eat it?

[GBdamo]

...it's now true that "we're in this together" i.e. the 5hit, we weren't all in the good times together. People who were prudent have been doubly 5hat on.

I'm going to shamelessly steal that one. thx

[GBdamo]

I got my O level in 1973!

I got my first teeth in 1973..

[Game_Over]

I'm YellowWellies. I read here daily but don't post a lot as you guys can be pretty misogynistic. But yes this is what a preggers HPCer looks like. Now who was Redshields spouting that conspiracy theory stuff trying to derail the thread? Hamish? Sibley?

I'm Brian and so is my wife!

To be fair I think that moaning about women who post on Mumsnet is probably more a comment on a certain class of person rather than on gender.

[campervanman]

Really? How terrible for you. So at some point in the future young people who will not get anything like your pension will stop subsidising your unfunded pension. *wipes tear from eye*

Of course much later they will have a worse pension than they would have as part of what would have gone to them is being siphoned off to backfill absurd pensions from the past. Perhaps when they are 80 they can print out this thread and eat it?

I wonder what would have happened if your generation had that attitude 100 years ago when pensions were first introduced. "Oh dear these are unfunded, there is no way we will be able to create enough wealth to give people a few years of leisure after spending 50 years working. We may as well give up and just not bother".

[bmf]

I wonder what would have happened if your generation had that attitude 100 years ago when pensions were first introduced. "Oh dear these are unfunded, there is no way we will be able to create enough wealth to give people a few years of leisure after spending 50 years working. We may as well give up and just not bother".

Clearly the inception of pensions has to be pre-planned. I'm not saying "don't bother". I'm not sure why you "bothered" to post such a weak reply that has no relation to my post.

I'm saying it has to be reasonable rather than over-generous to the point where the next generation are paying over the odds. You know this is the case as they have closed final salary pension schemes.

[campervanman]

Clearly the inception of pensions has to be pre-planned. I'm not saying "don't bother". I'm not sure why you "bothered" to post such a weak reply that has no relation to my post.

I'm saying it has to be reasonable rather than over-generous to the point where the next generation are paying over the odds. You know this is the case as they have closed final salary pension schemes.

It was you not me that mentioned people of the current generation not having decent pensions when they are 80 due to money being siphoned off by previous generations and I was merely pointing out to you the fact that your comment could have been applied to the same generation 100 years ago. Except that it wasn't and they didn't. There have been many times in the past 100 years where either through self induced events or war where debt and sustainability of public finances has been as bad if not worse than now. Previous generations didn't have your attitude to the future even when the future probably looked worse to them than the future may look to you now..

[dances with sheeple]

Yes, and that's fine. So long as you are not running a pension scheme where early entrants were promised high returns that subsequently cannot be met and the shortfall is made up by later entrants. I think there is a name for this kind of scheme.

Yes, The Great Greater Fools Paradise Scheme.

Edited April 17, 2012 by dances with sheeple

[tomandlu]

I wonder what would have happened if your generation had that attitude 100 years ago when pensions were first introduced. "Oh dear these are unfunded, there is no way we will be able to create enough wealth to give people a few years of leisure after spending 50 years working. We may as well give up and just not bother".

CV, I'm to some extent sympathetic with regard to you defending the boomers - certainly when it comes to the Machiavellian accusations that are thrown at them by some on these boards - but you have to accept that the whole thing has and will be a disaster. When the young can barely afford to live, let alone raise a family, those demographics are going to be a killer for retirees in the near future.

TBH I'm not sure what the 'right' solution would have been - linked pension-age to life-expectancy from the start maybe?

[bmf]

It was you not me that mentioned people of the current generation not having decent pensions when they are 80 due to money being siphoned off by previous generations and I was merely pointing out to you the fact that your comment could have been applied to the same generation 100 years ago. Except that it wasn't and they didn't. There have been many times in the past 100 years where either through self induced events or war where debt and sustainability of public finances has been as bad if not worse than now. Previous generations didn't have your attitude to the future even when the future probably looked worse to them than the future may look to you now..

Funny how the people with the money and assets always have a more positive attitude. I've a perfectly positive attitude, thanks.

But that is not the subject of this conversation. In case you forgot:

You picked up on me saying that people on final salary schemes live off the backs of others. You asked if you should have said no. I said no it's not you personally it was the mood of the age. I asserted successfully that if you get more out your pension than you put in you are living off the backs of others.

That is all this conversation is about. Positive / negative thinking is all subjective and a straw man in an attempt to get away from the root of this conversation.

Don't forget to have a beer tonight from one of the young lads from your firm, stuck in a small flat putting off having a family. That wasn't your intention but that is what is actually happening today.

[bmf]

CV, I'm to some extent sympathetic with regard to you defending the boomers - certainly when it comes to the Machiavellian accusations that are thrown at them by some on these boards - but you have to accept that the whole thing has and will be a disaster. When the young can barely afford to live, let alone raise a family, those demographics are going to be a killer for retirees in the near future.

TBH I'm not sure what the 'right' solution would have been - linked pension-age to life-expectancy from the start maybe?

Quite. My original entry was:

They get it. They just don't want to face it. I had a conversation with a guy the other day. I only spoke about house prices with him but I could have also mentioned his unfunded final salary pension scheme but he got annoyed before that so I left well alone!

He would not discuss numbers, was not interested in price to wage multiples or any other information. He simply said that he had worked hard and so should I. They don't want to face the fact that they are living off the backs of others. It's collective denial.

Most people don't understand pensions. They get what they are given. Fine. We can't discuss pensions with them. With the rest we can. Or can we?

Clearly the poster understands the difference between defined benefit / contribution. Yet even then the dogmatic attempts to justify them continue. It really is like some kind of collective denial. Pensions are even more fiercely defended than housing. Every now and then I meet someone older who decries high house prices (not often). I've never met anyone willing to discuss unfunded overgenerous pensions. It's incredible how quickly retiring on a good income for up to 30 years has become an unshakeable "right".

What's the difference between someone on benefits getting £200 from the state a week and someone on an unfunded pension taking £200 a week? Morally there is a big difference IMHO, but when it comes to crushing the next generation it's all the same.

As you say younger people have no idea what their retirement will look like, but we know: bleak

[cybernoid]

That's an excellent point... I am going to make it on MN if you don't mind?

please do

[campervanman]

Funny how the people with the money and assets always have a more positive attitude. I've a perfectly positive attitude, thanks.

But that is not the subject of this conversation. In case you forgot:

You picked up on me saying that people on final salary schemes live off the backs of others. You asked if you should have said no. I said no it's not you personally it was the mood of the age. I asserted successfully that if you get more out your pension than you put in you are living off the backs of others.

That is all this conversation is about. Positive / negative thinking is all subjective and a straw man in an attempt to get away from the root of this conversation.

Don't forget to have a beer tonight from one of the young lads from your firm, stuck in a small flat putting off having a family. That wasn't your intention but that is what is actually happening today.

OK back to fsp's. What in your opinion has caused fsp's to become unsustainable when for 50 years they were sustainable? Or are you saying they never were in which case every scheme that was actuarily verified as being sustainable over that period was not?

[tomandlu]

OK back to fsp's. What in your opinion has caused fsp's to become unsustainable when for 50 years they were sustainable? Or are you saying they never were in which case every scheme that was actuarily verified as being sustainable over that period was not?

I know that your question wasn't directed at me, but I'd be curious to see the actual figures attached to increased life expectancy's affect. I mean, up until the late 1930s, average life expectancy was basically below the age of retirement, now it's something like +15... that's a hell of lot of payments that can no longer be shared out amongst the survivors.

IMHO what should happen is a candid admission by all involved about the problem, and then a retrospective adjustment of all pensions. Pensions are important, and people need to be able to pay in, secure in the knowledge that they will get a reasonable return on them - reasonable not fantasy. It's a moot point - I suspect that it will happen, but only when the losers outnumber the winners (it was ever thus). Of course, that implies a lot of boomers dropping dead of old age without having had to give up their ill-gotten gains (joke), but tbh I find it hard to begrudge a corpse anything (not a joke).

[campervanman]

I know that your question wasn't directed at me, but I'd be curious to see the actual figures attached to increased life expectancy's affect. I mean, up until the late 1930s, average life expectancy was basically below the age of retirement, now it's something like +15... that's a hell of lot of payments that can no longer be shared out amongst the survivors.

IMHO what should happen is a candid admission by all involved about the problem, and then a retrospective adjustment of all pensions. Pensions are important, and people need to be able to pay in, secure in the knowledge that they will get a reasonable return on them - reasonable not fantasy. It's a moot point - I suspect that it will happen, but only when the losers outnumber the winners (it was ever thus). Of course, that implies a lot of boomers dropping dead of old age without having had to give up their ill-gotten gains (joke), but tbh I find it hard to begrudge a corpse anything (not a joke).

But life expecatncy has not suddenly increased, it has been a gradual process, certainly gradual enough for the sustainability of schemes not to change from postive to negative over such a short time.

I think you will find that benefits accruing from fsp's will and are being reduced to existing beneficiaries through stealth/inflation/taxation, so your retrospective action is already occuring.

Edited April 17, 2012 by campervanman

[bmf]

OK back to fsp's. What in your opinion has caused fsp's to become unsustainable when for 50 years they were sustainable? Or are you saying they never were in which case every scheme that was actuarily verified as being sustainable over that period was not?

I think the problem is the demographics. For your generation you outnumbered your predecessors so the problem didn't show itself.

I would guess that the percentage on FSP increased over the years also as you only win votes by promising more and more people more stuff. So you have more people collecting on unsustainable schemes. As the OP says before nobody lived long enough to collect. It was a sort of insurance where most are expected not to claim.

IMHO not weighting pensions by some kind of demographic weighting between the number retiring vs the number working is crazy. Now we have a demographic anomaly who are living longer yet retirement age has hardly gone up.

The gradual rise in life expectancy is itself not enough to cause a problem, but couple that with more members and a demographic imbalance and you have a right mess.

[campervanman]

I think the problem is the demographics. For your generation you outnumbered your predecessors so the problem didn't show itself.

Demographics and their effect on pensions are no something new tho ugh. Witness two world wars where millions of what were future workers were suddenly removed from the future workforce.

I would guess that the percentage on FSP increased over the years also as you only win votes by promising more and more people more stuff. So you have more people collecting on unsustainable schemes. As the OP says before nobody lived long enough to collect. It was a sort of insurance where most are expected not to claim.

But people did live long enough to collect. We are talking the last 50 years, not the 19th century.

IMHO not weighting pensions by some kind of demographic weighting between the number retiring vs the number working is crazy. Now we have a demographic anomaly who are living longer yet retirement age has hardly gone up.

The demographic anomaly that I am part of took place during a period when the economic situation of their parents was as bad if not worse than today. Falling and rising birth rates have occurred throughout history, why should there not be a increase in birth rates in future that would change the demographics?

The gradual rise in life expectancy is itself not enough to cause a problem, but couple that with more members and a demographic imbalance and you have a right mess.

As i've said before on this thread not a unique situation and one that has been overcome by previous generations

Edited April 17, 2012 by campervanman

[bmf]

And we are back to "no problem just get on with it". The have banned all final salary schemes so from a sustainability perspective it will be fine.

The demographic imbalance of the boomers and the ubiquity of the provision of pensions is totally different to WWII. Comparing now and then is just not correct.

Enjoy that beer. It's free (for you).

[campervanman]

And we are back to "no problem just get on with it". The have banned all final salary schemes so from a sustainability perspective it will be fine.

The demographic imbalance of the boomers and the ubiquity of the provision of pensions is totally different to WWII. Comparing now and then is just not correct.

Enjoy that beer. It's free (for you).

Maybe, just maybe fsp's are being closed not because of unsustainablity but because of a lack of opposition to their closure and a willingness to jump on the unsustainability bandwagon for corporations looking to make a step change to their profit margins.

[bmf]

Maybe, just maybe fsp's are being closed not because of unsustainablity but because of a lack of opposition to their closure and a willingness to jump on the unsustainability bandwagon for corporations looking to make a step change to their profit margins.

Yes, same for houses. They are sustainable but "they" want them cheaper. It's always someone else. The one enduring theme of our time.

There is no way corporations think FSP was sustainable or a good idea.

This conversation is just mad. How can you get more out than you pay in forever? It's exactly the same as house prices only less extreme but just as dumb.

tomandlu - don't hold your breath for the candid collective solution!

ps bet you get well over 30% don't you? nudge nudge