Si1 Posted June 28, 2014 Share Posted June 28, 2014 And to think that the cohort 1938-1948 have often been described as the luckiest generation in terms of access to wealth and property....inspite of a tough upbringing. What were the Pony Tails thinking of. who said that?It was the following generations thru to 1970ish who were the lucky ones Quote Link to comment Share on other sites More sharing options...
evetsm Posted June 28, 2014 Share Posted June 28, 2014 The thing is, there seems to be an innate limit to the rate at which modern socities can do that innovation, or at least implement the results. We just don't see super-innovative socities that move ahead in leaps and bounds (outside of catch up societies copying already implemented ideas and innovations). That being the case then there must also be a limit to the rate at which capital can be effectively employed and my previous statement holds true. Why innovate when you are being showered with cheap, almost free money/capital ? You keep seeing the symptoms but cannot seem to provide the correct diagnosis. Why are interest rates mispriced? Because they are set by a committee with a political agenda and a corporate constituency. Let rates, ie. the price of money , be set by the forces of demand and supply in the marketplace. Then capital will be appropriately rationed and investors will have to innovate to achieve advantage instead of merely holding out their hands for more unlimited, cheap money. Quote Link to comment Share on other sites More sharing options...
alexw Posted June 28, 2014 Share Posted June 28, 2014 Why innovate when you are being showered with cheap, almost free money/capital ? You keep seeing the symptoms but cannot seem to provide the correct diagnosis. Why are interest rates mispriced? Because they are set by a committee with a political agenda and a corporate constituency. Let rates, ie. the price of money , be set by the forces of demand and supply in the marketplace. Then capital will be appropriately rationed and investors will have to innovate to achieve advantage instead of merely holding out their hands for more unlimited, cheap money. You do realize I am not talking just about the last decade? That this has held true for over 100 years? Plot real GDP per capita which is proxy measure for technological progress, since it is technology that enables people to produce more....and we get more or less a straight line.... Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 28, 2014 Share Posted June 28, 2014 If old people want bigger state pensions they should join the fight for lower rents and house prices. There is no way younger workers can afford to pay more tax with housing costs as high as they are. Quote Link to comment Share on other sites More sharing options...
gf3 Posted June 28, 2014 Share Posted June 28, 2014 If old people want bigger state pensions they should join the fight for lower rents and house prices. There is no way younger workers can afford to pay more tax with housing costs as high as they are. If they increased tax by £200 a month rents would have to fall by £200 a month. But that would mean Britain could pay off it's debt but rent seekers would be out of pocket by £200 a month. So scrap that idea. Quote Link to comment Share on other sites More sharing options...
South Lorne Posted June 28, 2014 Share Posted June 28, 2014 If old people want bigger state pensions they should join the fight for lower rents and house prices. There is no way younger workers can afford to pay more tax with housing costs as high as they are. ....many older people are continuing to work and paying taxes ...more so now there is no compulsory work retirement age ...and many start new career / work / job (plural in some cases) after retirement from their core job(s)....suggest this is the way/model going forward ,,,,generates tax payers instead of net benefit recipients.... Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 28, 2014 Share Posted June 28, 2014 If they increased tax by £200 a month rents would have to fall by £200 a month. I don't think so. Do rents fall by the same amount every time utility prices go up? No, workers just have to cut back on their total consumption. Nothing magical about tax, it's just another cost of living. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 28, 2014 Share Posted June 28, 2014 ....many older people are continuing to work and paying taxes ...more so now there is no compulsory work retirement age ...and many start new career / work / job (plural in some cases) after retirement from their core job(s)....suggest this is the way/model going forward ,,,,generates tax payers instead of net benefit recipients.... Sounds good, would be even better if older workers had to pay NI the same as the rest of us. I see no reason why people should get a tax cut just because they had another birthday. Quote Link to comment Share on other sites More sharing options...
LiveinHope Posted June 28, 2014 Share Posted June 28, 2014 (edited) ....many older people are continuing to work and paying taxes ...more so now there is no compulsory work retirement age ...and many start new career / work / job (plural in some cases) after retirement from their core job(s)....suggest this is the way/model going forward ,,,,generates tax payers instead of net benefit recipients.... They would be called bed blockers in the NHS. Young people need to be able to i) have jobs and ii) see their jobs or careers progress, and both are hindered if older people1 don't shuffle off. 1 Many of whom continue to draw a salary while at the same time collecting a pension that itself can exceed the salary of people at the bottom, and that is after a lifetime of earning during which they should have set themselves up to shuffle off; it's just egregious. Edited June 28, 2014 by LiveinHope Quote Link to comment Share on other sites More sharing options...
gf3 Posted June 29, 2014 Share Posted June 29, 2014 I don't think so. Do rents fall by the same amount every time utility prices go up? No, workers just have to cut back on their total consumption. Nothing magical about tax, it's just another cost of living. It is the poor people at the bottom that set the price of rents. Your wage increases have enabled you to keep up with utility bills rents haven't moved in years. Quote Link to comment Share on other sites More sharing options...
campervanman Posted June 29, 2014 Share Posted June 29, 2014 (edited) GDP per capita increasing obviously does produce more for the same/the same for less but it is what happens to the proceeds of producing more for less that is important. Pensions benefits were able to increase when the share of wealth creation hoovered up by the 1% reduced from 20% to 5% and it is no coincidence that now that share is on it's way back up to 20% that pensions are being reduced. If you think of pensions being unaffordable due to the fact that those contributing through paying into pension funds during their working lives are less then you ignore the fact that the share of GDP going to the 99% is 15% lower than it was when pensions were 'affordable'. 15% of the UK GDP is around £200bn/year. Edited June 29, 2014 by campervanman Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 29, 2014 Share Posted June 29, 2014 It is the poor people at the bottom that set the price of rents. Your wage increases have enabled you to keep up with utility bills rents haven't moved in years. Real wages have been falling for the last 6 or 7 years. I don't see how that fits with your hypothesis that a rise in one component of the cost of living is automatically balanced out by a drop in one of the others. Sometimes rising prices (including taxes) just make people poorer. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 29, 2014 Share Posted June 29, 2014 GDP per capita increasing obviously does produce more for the same/the same for less but it is what happens to the proceeds of producing more for less that is important. Pensions benefits were able to increase when the share of wealth creation hoovered up by the 1% reduced from 20% to 5% and it is no coincidence that now that share is on it's way back up to 20% that pensions are being reduced. If you think of pensions being unaffordable due to the fact that those contributing through paying into pension funds during their working lives are less then you ignore the fact that the share of GDP going to the 99% is 15% lower than it was when pensions were 'affordable'. 15% of the UK GDP is around £200bn/year. Well if pensioners know how to get that share of national income back off the 1% then maybe once we've done it we can talk about a £17.5k state pension. Until then it's obvious where the money would have to come from: workers on PAYE whose households are already far more financially strained than the average pensioner household. Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted June 29, 2014 Share Posted June 29, 2014 (edited) who said that? It was the following generations thru to 1970ish who were the lucky ones http://www.nationalreview.com/article/362070/luckiest-generation-kevin-d-Williamson I think the trouble with such a conclusion that those born between 1938-1948 are the luckiest generation doesn't take into account a tough early life and is just looking at their investment opportunities and the access to wealth and property that they now enjoy (and a share of National wealth that will never again be enjoyed by such a narrow cohort). It could be argued that my generation (born1964) were just as lucky. We had two shots at a bombed out housing market...1985 and 1995 (twin post war lows). We also didn't suffer from institutional infantilisation.....Government schemes to keep the young occupied because housing wasn't available....it used to be National service because of bombed out cities now it is university education because of an inter generational wealth gap. Let's face it if houses were three time income multiples, then the rite of passage thing could be dispensed with and the young could live independent lives when any job was a ticket to a house as it was in the eighties. Edited June 29, 2014 by crashmonitor Quote Link to comment Share on other sites More sharing options...
wish I could afford one Posted June 29, 2014 Share Posted June 29, 2014 ... A poster who belongs on this thread, Wish I Could Afford One ... ... The original quote stated that £17,500 is "... the amount needed to live a modest but comfortable retirement." An incredible statement and only something that somebody from only a very few countries would ever suggest. In most parts of the world you could live like a king on that. To keep this short let's just pick one country within the EU that we can all freely migrate to for retirement and my likely choice for Early Retirement - Malta. In this English speaking sunny isle the average gross wage is EUR1,311 per month (£12,601 per annum) which is 28% less than this supposed modest retirement 'salary'. Let's also put £17.5k into perspective. Firstly, you're not fortunate enough to be getting a final salary pension. Secondly, you believe that eventually the State Pension will be either means tested or greatly reduced so don't build it into your retirement models. Thirdly, my research suggests that if you intend to live off your wealth then you probably don't want to be withdrawing more than about 3% per annum if you don't want to run too much of a risk of reverting to dog food on the street late in retirement. Out of that you also have to pay investment expenses let's assume 0.5% (plenty of active investors paying a lot more than that) per annum to make the numbers round. Therefore to get a gross 'salary' of £17,500 you need to amass wealth of £17.5k/2.5% = £700k. That IMHO is a lot of money... Quote Link to comment Share on other sites More sharing options...
winkie Posted June 29, 2014 Share Posted June 29, 2014 People are not investing enough for their retirement years....the average person retiring in the UK today can look forward to a state pension of £6000 pa plus a private pension of £2000 pa.....todays average wage is ~£26,000 so that will be a 70% reduction when they stop working. The number of 65s is set to increase from 9.9 million to 15.5 million by 2030......no wonder state pension age has to increase, it is already the greatest benefit cost....add to that the public sector pension promisies. Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 29, 2014 Share Posted June 29, 2014 (edited) People are not investing enough for their retirement years....the average person retiring in the UK today can look forward to a state pension of £6000 pa plus a private pension of £2000 pa.....todays average wage is ~£26,000 so that will be a 70% reduction when they stop working. - No national insurance - No work-related expenses - No need to increase savings for the future - No children to raise or student loans to pay - 80% chance of owning a property outright so no mortgage or rent to pay - House full of stuff so fewer material wants/needs than somebody nearer the start of adult life - Free bus transport - Time and energy to mend things, shop around, cook from scratch - Pensioner discounts and state-provided leisure activities £8k pa for an averagely wealthy pensioner means something very different in terms of quality of life than £8k pa for an averagely wealthy 35 year old. Pretending it's the same is just a way of eliciting sympathy from people who haven't thought it through properly. Edited June 29, 2014 by Dorkins Quote Link to comment Share on other sites More sharing options...
winkie Posted June 29, 2014 Share Posted June 29, 2014 (edited) - No national insurance - No work-related expenses - No need to increase savings for the future - No children to raise or student loans to pay - 80% chance of owning a property outright so no mortgage or rent to pay - House full of stuff so fewer material wants/needs than somebody nearer the start of adult life - Free bus transport - Time and energy to mend things, shop around, cook from scratch - Pensioner discounts and state-provided leisure activities £8k pa for an averagely wealthy pensioner means something very different in terms of quality of life than £8k pa for an averagely wealthy 35 year old. Pretending it's the same is just a way of eliciting sympathy from people who haven't thought it through properly. Pensioners should of course need less to live.....but it still does not alter the fact that most people are not putting away enough if they want to retire at 60 or even 65 years old......they will have little choice but to be forced to retire at the new state retirement age when ever that may be, and still then could well be living a basic existence. If you have a home that is paid for in full, there are two of you (both done your 35 working quailifying years for max pension), no dependant family members, or better still independent familily members either living with you or away from you £8k each should be plenty, even better if you also have a small rainy day buffer savings stopgap......but how many can or will find it possible to try and plan for that? Edit to add....paying down or repaying mortgage debt is the same as saving towards retirement, think of how much compounded interest and fees you will save, not to mention the lower the loan to value the lower the interest rate you can get and more choices of mortgage companies on offer. Edited June 29, 2014 by winkie Quote Link to comment Share on other sites More sharing options...
winkie Posted June 29, 2014 Share Posted June 29, 2014 who said that? It was the following generations thru to 1970ish who were the lucky ones Quote Link to comment Share on other sites More sharing options...
olliegog Posted June 29, 2014 Share Posted June 29, 2014 (edited) Pensioners should of course need less to live.....but it still does not alter the fact that most people are not putting away enough if they want to retire at 60 or even 65 years old......they will have little choice but to be forced to retire at the new state retirement age when ever that may be, and still then could well be living a basic existence. If you have a home that is paid for in full, there are two of you (both done your 35 working quailifying years for max pension), no dependant family members, or better still independent familily members either living with you or away from you £8k each should be plenty, even better if you also have a small rainy day buffer savings stopgap......but how many can or will find it possible to try and plan for that? Edit to add....paying down or repaying mortgage debt is the same as saving towards retirement, think of how much compounded interest and fees you will save, not to mention the lower the loan to value the lower the interest rate you can get and more choices of mortgage companies on offer. your assumption is made on a pensioner couple - a single pensioner would be hard pressed to live on 8k a year also lots of people don't realise that above 10k a pensioner pays tax and most of them pay council tax as well. your average single pensioner household has income of around 12k (including state pension and private pension as well as other income) http://www.theguardian.com/money/2013/jun/05/retirement-income-less-working-wage and the free bus pass (if there are few buses to use) and the winter fuel allowance (£100 per annum each) does not make them rich. Edited June 29, 2014 by olliegog Quote Link to comment Share on other sites More sharing options...
Dorkins Posted June 29, 2014 Share Posted June 29, 2014 a single pensioner would be hard pressed to live on 8k a year And why is that exactly? Strip out rent and my season ticket to get to work and I live on significantly less than that now, and that's without even really trying to be frugal. If I owned a property outright and was as time-rich as a pensioner I would live better on £8k pa than I do now. Quote Link to comment Share on other sites More sharing options...
JonathanR Posted June 30, 2014 Share Posted June 30, 2014 200K pension pot with 8% return wouldnt be far off. Can you tell me where on earth I can get an 8% return? Because I'm having problems getting anything over 1.5% at the moment. Maybe I should get a BTL property? Also is this £17.5k pension including the new state pension of £7.5k? If so that would mean you only need a private pension of £10k. To get a £10k pension at 67 if you don't smoke or have any serious medical conditions would cost about £150k and that's a level rate with no inflation increase. Quote Link to comment Share on other sites More sharing options...
Unexpected Posted June 30, 2014 Share Posted June 30, 2014 Can you tell me where on earth I can get an 8% return? Because I'm having problems getting anything over 1.5% at the moment. Maybe I should get a BTL property? Also is this £17.5k pension including the new state pension of £7.5k? If so that would mean you only need a private pension of £10k. To get a £10k pension at 67 if you don't smoke or have any serious medical conditions would cost about £150k and that's a level rate with no inflation increase. Typical high yield share 5% (BP for example) + additional draw down of 3% (You won't live forever). Quote Link to comment Share on other sites More sharing options...
olliegog Posted June 30, 2014 Share Posted June 30, 2014 (edited) And why is that exactly? Strip out rent and my season ticket to get to work and I live on significantly less than that now, and that's without even really trying to be frugal. If I owned a property outright and was as time-rich as a pensioner I would live better on £8k pa than I do now. you are forgetting utility bills (probably higher as pensioners are home a lot) council tax upkeep of the house if owned - do you know how much tradesmen charge and the single pensioner cannot do DIY TV licence telephone and internet house and contents insurance replacement of white goods I could go on you are in the trap of thinking that without mortgage repayments and travel to work costs - the rest is free cash there are lots of other expenses to take into account Edited June 30, 2014 by olliegog Quote Link to comment Share on other sites More sharing options...
crashmonitor Posted June 30, 2014 Share Posted June 30, 2014 (edited) you are forgetting utility bills (probably higher as pensioners are home a lot) council tax upkeep of the house if owned - do you know how much tradesmen charge and the single pensioner cannot do DIY TV licence telephone and internet house and contents insurance replacement of white goods I could go on you are in the trap of thinking that without mortgage repayments and travel to work costs - the rest is free cash there are lots of other expenses to take into account A lot of that stuff doesn't need to be that expensive. Replacement white goods at £40 a pop from your local charity shop. Our house and contents insurance is £100 pa on a detached property....via market comparison sites.. Telephone a £6 per month mobile contract and internet access at the local library. Heating go ride on the bus pass or go to the local library (a bit tongue in cheek) But the clued up do and enjoy themselves. Council tax...well yes ours is £1600 per year so pretty much no answer to that one. Tradesmen....tell me about it, more the fact that they don't even fix the problem and a lot of untidy work. I guess considering house prices and the fact they have no holiday pay and pensions that come from a magic money tree like the public sector....I would never complain about their rates.....£150 per day seems acceptable to me. But yes it costs and it damn well should cost because their life monetary rewards will always be less than the work they put in compared to other workers. All very well Watchdog on their case from superannuated BBC employees on a £1,000 a day once you deduct illness, holiday pay, team building seminars, messing about doing nothing etc.etc. Edited June 30, 2014 by crashmonitor Quote Link to comment Share on other sites More sharing options...
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