End of Pensioner "Perks"

[mercalia]

and the TV license? I thought it was soon to be upto the BBC to fund it not the govt, so how does that affect generational inequalties? Seems like their report is out of date? Any way they can keep their free TV license, I stopped buying one long time ago now and dont miss it. maybe 2 or 3 shows a year I can get elsewhere.

[al_yrpal]

House of Lords? Mostly pensioned off appointed politicians including "Half Brain Willets" chief honcho of the pressure group Hate the Aged ( The Resolution Foundation). This report, no doubt cooked up by this moron, shows why the House should be disbanded and reconstituted with democratically elected members. Make them work for their £305 a day + expenses.
Via our local charity I have worked with the poorest pensioners since retiring. These peoples lives are often pretty mundane to say the least. The benefits the Lords want to curb add a bit of pleasure and colour to the lives of these folk many of whom wont apply for handouts.
Send every pensioner an opt out form every year with their pension notice, their bus pass renewal, TV licence renewal. Many well off people will opt out. Its like organ doning, if you dont ask, you wont get.

Al

[kwackers]

Seriously though, where does reducing such debates to generational conflict and defence get us?

It shouldn't.

You work all your life with a certain expectation of state aid by way of pension, bus pass etc when you retire.
There's nothing fundamentally unfair about it, as a youngster I'd have been better off had I not been paying for it.

Turning around as folk approach retirement and saying "oh look, you've done alright, put enough into a pension, saving etc so we'll renege on our original commitment" seem a bit off to me.
I also feel the same way about the way savings are handled if you're out of work and need help tiding you over.

Those who make the effort are penalised and those who don't get it all.

Perhaps if they refund some of the tax and NI I've paid over the years as compensation I might feel a bit more positive about such suggestions.

[Mick F]

Last mortgage we had, was for £30,000 and we paid £300 per month for it. I was earning circa £25,000pa gross back then and it was a struggle to afford it.

My first (in '86) was for £25,000 and I think I was earning £10k.
IIRC my take home was around £600 a month and by the time the basics had been taken out I had around £50 left.

I reckon you had it easy Mick.

Easy?
It was a struggle and the mortgage rate was going up and up seemingly every month.

We're ok financially now.
Mortgages are behind us now. We bought this place cheap, and a good job too as the house we had previously was sold during a housing price slump in 1997. Bought for £28,000 in Aug 1985 plus a topup for an extension to make it £30,000, and at one time it was valued at £72,000, but due to the slump, we only achieved £49,000. That was after a dozen years of ownership that only gave us a "profit" of £19,000.

My OAP is £500odd four weekly, and I have a nice index linked service pension too.
Mrs Mick F should have had her OAP at age 60, but now has to wait until she's 66. She will be able to have a bus pass then too. I had to wait until I was 62 for mine as eventually bus passes will be available when you reach pension age. I was part of the transition phase as mine should have been at 60.

[Ben@Forest]

My first (in '86) was for £25,000 and I think I was earning £10k.
IIRC my take home was around £600 a month and by the time the basics had been taken out I had around £50 left.

In the mid 1960s my wife's uncle bought an, admittedly run down, but liveable cottage, in which he and his wife still live, for £1,000 when he earned £1,000 a year. I'd like to see any ordinary person buy a liveable house on one person's salary now.

The cottage, which was big enough to be a family home for two children would be worth over £300,000 now.

[kwackers]

I'd like to see any ordinary person buy a liveable house on one person's salary now

You can't.
One reason you can't is that as more and more people became working 'couples' they had more money to spend on their house which basically fuelled house inflation.
End result, two wages required to afford an house.

Next step, living with your parents and house costs running to requiring 4 working adults to afford...
(Unless we start making so many houses they effectively become worthless, but my money is on 4 working adults).

[slowster]

......modest house purchase costs .......

I take a little issue with this. I've mentioned it a few times on here.

Yes, the outright costs of houses were lower than today, but we paid extortionate interest rates for the mortgage.
You knocked two naughts off the mortgage, and that's what you paid per month.
<SNIP>
Yes, the deposit required is difficult, but the repayments are easy.

Like so many baby boomers, you ignore the other aspect of those high interest rates. During the early 1980s, and even more so during the 1970s, wage inflation was correspondingly high. That meant that although for most house buyers the mortgage payments were often a struggle very early on during the mortgage, the amount of the mortgage relative to wages decreased quickly as a result of inflation. This process was well understood by most house buyers, and resulted in many buyers borrrowing the most they possibly could under the lending limits then applying and buying the most expensive house they could afford as a result. This was often done to get as far up as possible on the so called 'property ladder', with view to repeating the process a few years later when the value of the debt to wage had been eroded by wage inflation, and the buyers could then afford an even bigger mortgage on a bigger/nicer house.

Interest rates today are low (in fact too low, but that's another story) but wage inflation is also low and house prices are high relative to incomes. Consequently house buyers are likely to have to spend more of their wages over their lifetime on mortgage payments - affording those payments will not become rapidly easier after a few years in the way it used to as a result of wage inflation. So unlike in the 1970s and 1980s, the young couple that buys a small two bed house or 'starter home' is less likely to be able to afford a bigger house if and when they have children.

And it's not as if people have a choice. Rising house prices and the cost of servicing mortgage debt have also resulted in private rented accommodation becoming correspondingly more expensive (often so much so that renters spend so much on rent - more than the mortgage would be in many cases - that they cannot afford to save a deposit to buy a house).

[pete75]

It's always been said it's cheaper not to means test benefits such as winter fuel allowances. I have a lot of sympathy for someone in poor circumstances who see the very wealthy getting handouts they don't need. I'd means test all benefits even if the net result would be more costly. It would give a sense of fairness.

Increase costs the overall costs of the benefits system in order to take benefits away from some people. What a ridiculous concept. I've always though the phrase "politics of envy" is stupid but in this case it seems most appropriate.

[al_yrpal]

Housing costs are undoubtably the curse of the young. Two earners is now the norm but the reasons for unaffordability is IMO twofold...

Population growth far outstripping house building and reducing availability for first time buyers.

Low interest rates causing the wealthy with savings to become landlords, driving up prices and further reducing availability of homes to buy for first time buyers.

We purchased our Lostwithiel holiday home in 97 in the slump. No one wanted to buy anything. It was just a bolt hole for us, our family and friends, we never let it. In 1999 the wealthy all started to buy property to rent to get a decent return on their savings in a time of stupidly low interest rates and return on savings. Soon after the great British Public joined in and the housing market went crazy. Our holiday home had quadrupled in value and we sold it only because we we were bored with it in 2007 just before the big slump in 2008.
With the banks now sitting on massive mortgages there was no way back if prices had fallen, so the government printed money to bale them out. Its still the same, if property prices slump the whole financial sector will collapse. All very bad for youngsters.
Not a solution but a help will be to put the squeeze on landlords, build more houses and reduce immigration, and even encourage emigration.
Housing costs are at the root of all the pressure on the young, not wealthy pensioners.

Al

[Cunobelin]

I love the Lord's claim that "on average" pensioners are better off than those who are working. I wonder where they got their numbers from? Lord Winston, perhaps?

Very carefully worded and ambiguous

"Many" can be defined as the specific cohort that we chose to ensure that we got the income we wanted.

It also means that they can exclude the 1.5 million (figures vary) of pensioners defined as living in poverty

[mercalia]

Housing costs are undoubtably the curse of the young. Two earners is now the norm but the reasons for unaffordability is IMO twofold...

Population growth far outstripping house building and reducing availability for first time buyers.

Low interest rates causing the wealthy with savings to become landlords, driving up prices and further reducing availability of homes to buy for first time buyers.

We purchased our Lostwithiel holiday home in 97 in the slump. No one wanted to buy anything. It was just a bolt hole for us, our family and friends, we never let it. In 1999 the wealthy all started to buy property to rent to get a decent return on their savings in a time of stupidly low interest rates and return on savings. Soon after the great British Public joined in and the housing market went crazy. Our holiday home had quadrupled in value and we sold it only because we we were bored with it in 2007 just before the big slump in 2008.
With the banks now sitting on massive mortgages there was no way back if prices had fallen, so the government printed money to bale them out. Its still the same, if property prices slump the whole financial sector will collapse. All very bad for youngsters.
Not a solution but a help will be to put the squeeze on landlords, build more houses and reduce immigration, and even encourage emigration.
Housing costs are at the root of all the pressure on the young, not wealthy pensioners.

Al

and you can blame that on Margaret Thatcher and her buy to let that morphed from the council selling the properties could keep all the money to only keeping I think it is 1/3 and if they dont use that within a certain timescale the govt gets that also. No wonder councils dont build many homes, they dont have the cash? She waged war on Council Housing. And Cameron/Osbourne hammered in another nail in requiring housing associations to do the same?

[al_yrpal]

Agreed, Maggie didnt help by trying to turn council tennants into Tories by practically giving them property. But... 1997? That rings a bell? Wonder what her Labour successors did to correct the situation? Start a war perhaps?

Al

[Oldjohnw]

I bought my first house in 1971 for £3,500. I was earning £1,000pa. In my town today average house price is 10x average salary.

[reohn2]

Agreed, Maggie didnt help by trying to turn council tennants into Tories by practically giving them property. But... 1997? That rings a bell? Wonder what her Labour successors did to correct the situation? Start a war perhaps?

Al

Whilst I agree with you,it was New labour ie; Tories in red ties,not Labour,and the UK electorate fell for it hook line and sinker.
That's why we're where we are today,the belief in growth year on year and pie in the economics.
The people who voted for it and those who couldn't be bothered to vote at all are to blame.
As a result we now have a bunch of millionaire public school educated idiots running the country,with just over half the population at last count in 2016 believing it's all the fault of the EU
It isn't.
What caused it was greed in the form of unbridled capitalism and buying votes!

[Tangled Metal]

Seriously though, where does reducing such debates to generational conflict and defence get us?

It shouldn't.

You work all your life with a certain expectation of state aid by way of pension, bus pass etc when you retire.
There's nothing fundamentally unfair about it, as a youngster I'd have been better off had I not been paying for it.

Turning around as folk approach retirement and saying "oh look, you've done alright, put enough into a pension, saving etc so we'll renege on our original commitment" seem a bit off to me.
I also feel the same way about the way savings are handled if you're out of work and need help tiding you over.

Those who make the effort are penalised and those who don't get it all.

Perhaps if they refund some of the tax and NI I've paid over the years as compensation I might feel a bit more positive about such suggestions.

Bus pass was introduced in 2008. If you started work expecting that retirement benefit you're a long way off retirement. Your other elements seem fair though.

Except I would point out that a lot of people my age I discuss state pensions to seem to be of the opinion it's on the way out in the form pensioners have it now. I've been paying into state pension (as required by legislation) from my first paid job at 14 or 15 (as evening jobs and summer jobs until I left university and started my working life properly). This is no guarantee of receiving the benefits you believed to be paying into. It's been further added to with the opt out stakeholder pensions effectively to cover the reduction in pension that we think is going to come. Governments are effectively trying to force the employed to fund their own retirement more than in the past. I admit I do not know enough or as much about this as I really should. It just is becoming even more worrying as I age.

If you really want to discuss generational division and benefits. You also need to consider comparing the idea gaining credence that it is not to be expected that the norm is for each generation to be better off. There's the theory that historically this has not been necessarily b true. It certainly has with the baby boomer generation whose working life coincided with a big increase in the global / national economy. Big growth figures are expected to be a thing of the past.

However I do not think we should have this discussion as a generational issue. What should we all expect from the state on retirement and how to fund it? If it's right for current pensioners to get something then that should be given to future generations. Perhaps they includes keeping the same retirement benefits and age. That is unlikely to be affordable.