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juvenal

RNLI income shortfall because houses aren't selling

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I work for a charity and we have just had a massive "re-structure" which involves paying a shed-load of one-off payments to Boomers to go away and start drawing their massive pensions now whilst replacing their huge salary jobs with new titles so that they can be done by younger people for half the money.

It's astonishing to witness first hand.

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10 hours ago, juvenal said:

https://www.bournemouthecho.co.uk/news/17891830.rnli-plans-cut-135-jobs/

Redundancies at RNLI HQ as their lifeline of legacy cash slows. Probates taking longer because houses aren't selling. RNLI gets 75% of its funding from money/estates left in Wills.

I don’t watch much telly, but when I have recently I keep seeing this advert begging me to put the RSPCA in my will - they must all be getting desperate or have seen the coming bulge in boomers about to croak it.

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1 hour ago, LetsBuild said:

I don’t watch much telly, but when I have recently I keep seeing this advert begging me to put the RSPCA in my will - they must all be getting desperate or have seen the coming bulge in boomers about to croak it.

Define desperate.

Brown stuffed the third sector with his cronies - see Brendan Cox and Oxfam.

Layer after layer after layer of public sector middle managers types doing to sum total of f-all.

 

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I would imagine other major legacy beneficiaries (Cancer Research; RSPCA) etc are feeling the pinch as well.

Just a thought, but if EA's didn't so absurdly overvalue, wouldn't houses sell more quickly and Probate go through in less time?

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I think there's multple factors at play.

One, OAP have stopped moving to OAP type places - Scarb, Christchurch, Bmouht etc.

They stay put, moving to smaller housing, opting to stay near family and fly away on holioday. Makes more sense then movingto an UK resort and crossing fingers for sun.

Two, BTL has really upset the UK housing chain - I dont use housing ladders, as tha has never existed.

Theres an almost 20 year gap  where FTB/smaller house owners used to be. That means theres no chains.

In the North, Im seeing what would be FTB move straight to the family home.

The old EA ******** of 'Move every 7 years has gone.

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42 minutes ago, spyguy said:

I think there's multple factors at play.

One, OAP have stopped moving to OAP type places - Scarb, Christchurch, Bmouht etc.

They stay put, moving to smaller housing, opting to stay near family and fly away on holioday. Makes more sense then movingto an UK resort and crossing fingers for sun.

Two, BTL has really upset the UK housing chain - I dont use housing ladders, as tha has never existed.

Theres an almost 20 year gap  where FTB/smaller house owners used to be. That means theres no chains.

In the North, Im seeing what would be FTB move straight to the family home.

The old EA ******** of 'Move every 7 years has gone.

Here they come in from outside the area put on a captains hat, don a cravat and buy the largest family house they can get hold of.

You see the bigger the house the better the investment and also as you have the £150,000 main residence allowance.

All that space is wonderful when the kids come to visit the area.   The actual kids in the area can live in the small terraced houses or a few affordable places about.

Problem is its stalled a bit as these folks often have good jobs but they are older (average age oldest in UK) so its all down to what the old place sells for down south.

Now that is down/stopped rising sellers are a bit stuck....

Loads of chains falling through also as they cannot get the price for the old house they once could and cannot complete.

When they die the relatives from the South cannot believe a 4 bed in hoveton is not worth the same as a 4 bed in Barnet so even when the occupants die ...........it takes months

 

Edited by Fromage Frais

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My mum got invited to a Cancer Research event at some new wing of a local hospital.

 

Someone let one that the main thing they are interested in is legacies, as coins in a tin won't cut it, even a regular direct debit not good enough for them, they now have so many expenses, they need to hook a big fish for £100,000s.

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4 minutes ago, reddog said:

My mum got invited to a Cancer Research event at some new wing of a local hospital.

 

Someone let one that the main thing they are interested in is legacies, as coins in a tin won't cut it, even a regular direct debit not good enough for them, they now have so many expenses, they need to hook a big fish for £100,000s.

Or another spin - they are so big and lazy/inefficient that they can no longer rely on the wider population putting ~£10 in a box every year.

Where the CC has seriously let the UK down is not providing guidelines and oversight for a charities running cost.

 

 

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On 11/09/2019 at 09:09, LetsBuild said:

I don’t watch much telly, but when I have recently I keep seeing this advert begging me to put the RSPCA in my will - they must all be getting desperate or have seen the coming bulge in boomers about to croak it.

Simple fix for RSPC is basically put down all the strays.

Most will end up that way.

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1 hour ago, spyguy said:

Or another spin - they are so big and lazy/inefficient that they can no longer rely on the wider population putting ~£10 in a box every year.

Where the CC has seriously let the UK down is not providing guidelines and oversight for a charities running cost.

 

 

Good point - also maximum salary would be a good idea.  How much is reasonable?

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On 11/09/2019 at 08:12, stop_the_craziness said:

I work for a charity and we have just had a massive "re-structure" which involves paying a shed-load of one-off payments to Boomers to go away and start drawing their massive pensions now whilst replacing their huge salary jobs with new titles so that they can be done by younger people for half the money.

It's astonishing to witness first hand.

The 21st century in microcosm!

Staggering to think what a change this is going to bring. Over time...as the boomers die off we will get fewer 'rich' older people, and younger people with more debt and with less free money for a number of reasons.

I know that demographic changes 'killed' final salary penaions and should over time deflate house prices but I was surprised to read an article predicting a long slow decline in equities values as fewer people invest less into pensions and the boomers and well off gen-xers slowly release their equity holdings in the pensions but aren't replaced in the same numbers by millennials.

Virtually impossible to predict what the world, or at least the British, standard of life and social composition will be like at the end of the century. But it doesn't look good for my grandchildren....

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45 minutes ago, regprentice said:

The 21st century in microcosm!

Staggering to think what a change this is going to bring. Over time...as the boomers die off we will get fewer 'rich' older people, and younger people with more debt and with less free money for a number of reasons.

I know that demographic changes 'killed' final salary penaions and should over time deflate house prices but I was surprised to read an article predicting a long slow decline in equities values as fewer people invest less into pensions and the boomers and well off gen-xers slowly release their equity holdings in the pensions but aren't replaced in the same numbers by millennials.

Virtually impossible to predict what the world, or at least the British, standard of life and social composition will be like at the end of the century. But it doesn't look good for my grandchildren....

Nah.

Stuff will have worked thru in about 10-15 years.

 

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Charity......just an observation, many put many free hours labour helping a good cause whilst those in the middle and top are earning thousands from it between them.....give to one and your name is on a list as a giver and forever pestered and bombarded with cold calls and mail shots from not only charity/s of choice but many other charities who might have sold on number?.....big charity is a big business......home and local is not as big but can better see the benefits of a local gift of both time and money.....just saying.😉

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I agree with the negative comments around modern charities. In my opinion, not a good idea to leave them a percentage of your estate where they can have any control over the will, which they will  ruthlessly exploit to their own ends. 

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Most modern charities are just havens for troughers. The only ones I give money to are local and staffed by volunteers.

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On 10/09/2019 at 22:36, juvenal said:

https://www.bournemouthecho.co.uk/news/17891830.rnli-plans-cut-135-jobs/

Redundancies at RNLI HQ as their lifeline of legacy cash slows. Probates taking longer because houses aren't selling. RNLI gets 75% of its funding from money/estates left in Wills.

Oh dear.

Caught.

https://www.dailymail.co.uk/news/article-7464961/How-3-3million-donations-RNLI-spent-abroad.html?fbclid=IwAR32iAXn_OHq18z0XWsd-d4-qqpw0OBYq69vQRs7I9OpbYyBSuL_vhETnCQ

Going nuts on my local FB groups esp. After cupgate.

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It's the Daily Mail - typical outrage filter, I'm sure the people up in arms that RNLI spend 2% on work overseas will be the first to complain if their kid drowns somewhere abroad while on holiday.

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9 hours ago, Habeas Domus said:

It's the Daily Mail - typical outrage filter, I'm sure the people up in arms that RNLI spend 2% on work overseas will be the first to complain if their kid drowns somewhere abroad while on holiday.

The tendency for them to sack lifeboat volunteers for political incorrectness, who routinely risk their necks to save lives, also grates.

The fact is that your emotive appeal is irrelevant. People are free to give to lifesaving international charities as they see fit. You wouldn't expect the RNLI to go so far out of its remit. It smells of corporate politically correct dogoodery.

Edited by Si1

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On ‎12‎/‎09‎/‎2019 at 12:15, regprentice said:

Staggering to think what a change this is going to bring. Over time...as the boomers die off we will get fewer 'rich' older people, and younger people with more debt and with less free money for a number of reasons.

I know that demographic changes 'killed' final salary penaions and should over time deflate house prices but I was surprised to read an article predicting a long slow decline in equities values as fewer people invest less into pensions and the boomers and well off gen-xers slowly release their equity holdings in the pensions but aren't replaced in the same numbers by millennials.

Virtually impossible to predict what the world, or at least the British, standard of life and social composition will be like at the end of the century. But it doesn't look good for my grandchildren....

I think there's a lot of reasons why the above may be incorrect.

Firstly it's NOT just - or even mostly - demographics that killed off final salary pension schemes, but rather a combination of:

- Much lower returns, especially from bonds

- Successive government legislation from 1985 to 2003 that forced companies to increase the generosity of the schemes

- And yes, demographics

If we still had bond yields at 10%pa+ instead of under 2%pa, and the government hadn't put in the legislative requirements, then demographics alone wouldn't have killed final salary pensions.  However, the flip side is they also wouldn't be the "gold-plated" schemes that they are.  It's my view that it's the governments forcing companies to gold-plate them ultimately lead to their demise, because the reality is we simply can't afford to provide gold-plated pension schemes for everyone - all you can choose is whether to have mediocre DB ones or mediocre DC ones.

But on the bright side, those DB plans have WAAAAAY less invested in equities than they used to.  I don't think we'll see the kind of decline in equities that you think we might.  When I started work in the pensions industry in the 90s around 80% or more of scheme assets tended to be equities.  Today, it's more like 25%, and one bug (£3 billion) scheme I work on just sold its last equities this year.  It has literally 0% of the fund in equities.

Finally, "you can't take it with you".  When people die, their houses, equities and cash don't disappear.  By the time your grandchildren are old every single house, share, gold coin etc etc that today is owned by a Boomer or Gen Xer will still be on the Earth somewhere, owned by either your grandchildren's lot or the ones that come after them.

What society is like by then is, as you say, impossible to predict.   Simplistically extrapolating trends from today is unlikely to be correct.

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40 minutes ago, scottbeard said:

I think there's a lot of reasons why the above may be incorrect.

Firstly it's NOT just - or even mostly - demographics that killed off final salary pension schemes, but rather a combination of:

- Much lower returns, especially from bonds

- Successive government legislation from 1985 to 2003 that forced companies to increase the generosity of the schemes

- And yes, demographics

I

agreed.

Am additional reason: final salary schemes make sense when you expect to work for the same employer throughout your working life (or are, at least, part of the same pension scheme).  

It is not difficult to show that if one assumes:
1) real rate of return of 3% (as was available for many, many decades)
2) contributions from age 20 to 65
contributions to the scheme (employee and employer combined) are fixed at at a constant percentage of salary, then contributions of approximately 12% of salary  

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1 hour ago, scottbeard said:

Firstly it's NOT just - or even mostly - demographics that killed off final salary pension schemes, but rather a combination of:

- Much lower returns, especially from bonds

- Successive government legislation from 1985 to 2003 that forced companies to increase the generosity of the schemes

- And yes, demographics

I

Apologies - hit the wrong button - why can one not edit posts? 
*******
 
agreed.

Am additional reason: final salary schemes make sense when you expect to work for the same employer throughout your working life (or are, at least, part of the same pension scheme) but if this is not the case, younger workers are likely better off with DC schemes .  

It is not difficult to show that if one assumes:
1) real rate of return of 3% (as was available for many, many decades)
2) contributions from age 20 to 65
3) life expectancy of 20 years after retirement
4) pension to be 67.5% of final salary for 45 years of contributions (i.e. 1.5% for every year of service)  
5) no growth in salary in real terms 
then the scheme can be funded with contributions (employee and employer combined) at approximately 12% of salary  

However, to fund an extra year of pension benefit (1.5%) for an employee who is just about to retire is clearly greater than the cost to fund an extra year of benefit for an employee who is only 25. (the cost is approximately 23% of salary for the 65 year old and 5% for the rookie.) In effect, the young are subsidizing the old (what a surprise!) Such subsidies might be acceptable if the young can be certain that they themselves wil still be within the scheme at age 65, and hence will benefit.  In recent decades (maybe starting in the 1970's) such lifetime employment prospects are unlikely and it was economically beneficial for young employees to take part in DC schemes where the same overall contribution (the 12% of salary) could, in effect, be paid into a portable scheme. 

Furthermore, if folks (1) get big promotions shortly before retiring - e.g. military/police - or (2) work boatloads of overtime - e.g. some firemen and other unionized jobs - to jack up final salary without there having been a commensurate increase in contributions, then the 12% funding level will likely prove to have been inadequate.

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