Boomer life according to the economist
Discussion
cheesejunkie said:
It's interesting to complain about narcissism when posting on a public forum but I can well believe that image obsession has increased due to social media. That's a problem. As is constant phone notifications and short attention spans. One the boomers are lucky to be on the tail end of. Although my boomer parents use WhatsApp more than I do.
Off topic, but most users are posting under a pseudonym, so I'm not sure that narcissism would apply. Interesting thought.mwstewart said:
cheesejunkie said:
It's interesting to complain about narcissism when posting on a public forum but I can well believe that image obsession has increased due to social media. That's a problem. As is constant phone notifications and short attention spans. One the boomers are lucky to be on the tail end of. Although my boomer parents use WhatsApp more than I do.
Off topic, but most users are posting under a pseudonym, so I'm not sure that narcissism would apply. Interesting thought.Prolex-UK said:
Freezing the tax threshold means tgey get 20% of the increase back in tax for most OAPs though
I'm not a Boomer, but it looks very much that we needed inflation busting pensions increases because personal saving simply wasn't sufficient. The state pension isn't enough to survive on IF you have no other means - and for many pensioners they simply have NOT accrued enough savings to live in. At point of retirement, the median pension pot for 55-64 year olds is 107k. That means something like another 6-7k in annuity income on top of state pension IF they qualify for the full amount. Its subsistence living. They are at a point in life where regardless of historic bad choices - they cannot atone or change for it? Now there will be lots of boomers waaay above that 107k - but there are an awful lot well below it.You could means test the state pension - which really needs a 40 year feed in period, or you could tax it on the way out - like income - which doesn't seem unreasonable above a certain level.
I've no interest in seeing pensioners not afford heating or food, its approaching daft levels of wishful schadenfreude; the only way out of this hole is investment in productivity (which in the UK is a regional issue).
Having the young blame the old for the countries ills - is a gift for the politicians. It hides all parties epic failure and mismanagement of the economy. In fact they are idiots. Rishi Sunak is especially useless. Now he is claiming that its his policies that have halved inflation and helped manage the cost of living crisis and is praying it drops low enough that the BoE can give him an election boosting rate cut. The problem is, his Govt policies have made last mile inflation cuts very, very difficult to come by. Immigration policy has forced up wages - National Minimum Wage up nearly 10% - increasing alcohol etc taxes - all are inflational. 80% of inflation is now coming from hospitality, culture, food and beverages. His entire approach is entirely paradoxical.
Purging government is needed. As someone else said, there are no long term policies - which are gutting the countries growth potential.
BandOfBrothers said:
Prolex-UK said:
Freezing the tax threshold means tgey get 20% of the increase back in tax for most OAPs though
No difference as that fiscal drag applies to workers too.Other people are affected but that wasn't the point being made afaics, and after all, we're in it together.
turbobloke said:
BandOfBrothers said:
Prolex-UK said:
Freezing the tax threshold means tgey get 20% of the increase back in tax for most OAPs though
No difference as that fiscal drag applies to workers too.Other people are affected but that wasn't the point being made afaics, and after all, we're in it together.
Workers have seen a lower increase in income and the same tax threshold freezing.
So in effect both groups have seen only 80% of their rise, but pensioners have seen a much bigger rise.
OoopsVoss said:
Prolex-UK said:
Freezing the tax threshold means tgey get 20% of the increase back in tax for most OAPs though
I'm not a Boomer, but it looks very much that we needed inflation busting pensions increases because personal saving simply wasn't sufficient. The state pension isn't enough to survive on IF you have no other means - and for many pensioners they simply have NOT accrued enough savings to live in. At point of retirement, the median pension pot for 55-64 year olds is 107k. That means something like another 6-7k in annuity income on top of state pension IF they qualify for the full amount. Its subsistence living. They are at a point in life where regardless of historic bad choices - they cannot atone or change for it? Now there will be lots of boomers waaay above that 107k - but there are an awful lot well below it.You could means test the state pension - which really needs a 40 year feed in period, or you could tax it on the way out - like income - which doesn't seem unreasonable above a certain level.
I've no interest in seeing pensioners not afford heating or food, its approaching daft levels of wishful schadenfreude; the only way out of this hole is investment in productivity (which in the UK is a regional issue).
Having the young blame the old for the countries ills - is a gift for the politicians. It hides all parties epic failure and mismanagement of the economy. In fact they are idiots. Rishi Sunak is especially useless. Now he is claiming that its his policies that have halved inflation and helped manage the cost of living crisis and is praying it drops low enough that the BoE can give him an election boosting rate cut. The problem is, his Govt policies have made last mile inflation cuts very, very difficult to come by. Immigration policy has forced up wages - National Minimum Wage up nearly 10% - increasing alcohol etc taxes - all are inflational. 80% of inflation is now coming from hospitality, culture, food and beverages. His entire approach is entirely paradoxical.
Purging government is needed. As someone else said, there are no long term policies - which are gutting the countries growth potential.
NRS said:
It's not blaming them, it's suggesting ways of trying to balance things up, particularly since previous policies resulted in some of the current issues. If pensions are a problem for Boomers then it's going to be far worse for a generation that has to save for their own pensions (DB pensions basically gone now) while also paying for a larger demographics group's pensions and massive healthcare costs on top. And taking 20% more from working people than retired people is even worse when those working people have had almost 2 decades of no real salary rises as rises have only matched inflation. So there's been no extra money to put into retirement savings, their salary just buys what it did before. Unfortunately someone is going to have to take a lot of pain, it's IMO immoral that it all gets kicked onto the younger generations and the older ones are protected. It should be split. Some policies can help both sides, for example some kind of financial pressure on houses would mean more boomers in large houses after kids have left would mean they downsize to release equity, helping the housing crisis a bit and providing more money for their retirement helping both groups for example.
A lot of you are going about it very badly - because the problem isn't the boomers - its short term Government thinking, which is little different from rob Peter (boomers) to pay Paul (yoof) - in short dates.The fix is NOT straight forward and long term.
Its going to take 40-50 years to get rid of the state pension - so we should start that now - by mandating and incentivising workplace savings. No opt outs. There are ways to kickstart this - you could seed ALL pensions with 8k and in 47 years with an annual RoR of 5.5% you have near 100k pot - before life long contributions). If you did this at age 21, you have an annual cost of <7 billion Vs a 112bn annual pensions bill (increasing). We have to start the process of its removal - but it will take as long as the people just starting work to do it (which isn't really that long given perpetuality of Government debt).
To balance off that 7bn spend, you need income - so some form of wealth taxes are appropriate. Forced downsizing isn't it - because you give a pass to the real problem. What you really want to be doing, is regional investment and building a polycentric economy. Doing that removes supply and demand (of property) issues and better distributing your workforce.
OoopsVoss said:
A lot of you are going about it very badly - because the problem isn't the boomers - its short term Government thinking, which is little different from rob Peter (boomers) to pay Paul (yoof) - in short dates.
The fix is NOT straight forward and long term.
Its going to take 40-50 years to get rid of the state pension - so we should start that now - by mandating and incentivising workplace savings. No opt outs. There are ways to kickstart this - you could seed ALL pensions with 8k and in 47 years with an annual RoR of 5.5% you have near 100k pot - before life long contributions). If you did this at age 21, you have an annual cost of <7 billion Vs a 112bn annual pensions bill (increasing). We have to start the process of its removal - but it will take as long as the people just starting work to do it (which isn't really that long given perpetuality of Government debt).
To balance off that 7bn spend, you need income - so some form of wealth taxes are appropriate. Forced downsizing isn't it - because you give a pass to the real problem. What you really want to be doing, is regional investment and building a polycentric economy. Doing that removes supply and demand (of property) issues and better distributing your workforce.
Good post.The fix is NOT straight forward and long term.
Its going to take 40-50 years to get rid of the state pension - so we should start that now - by mandating and incentivising workplace savings. No opt outs. There are ways to kickstart this - you could seed ALL pensions with 8k and in 47 years with an annual RoR of 5.5% you have near 100k pot - before life long contributions). If you did this at age 21, you have an annual cost of <7 billion Vs a 112bn annual pensions bill (increasing). We have to start the process of its removal - but it will take as long as the people just starting work to do it (which isn't really that long given perpetuality of Government debt).
To balance off that 7bn spend, you need income - so some form of wealth taxes are appropriate. Forced downsizing isn't it - because you give a pass to the real problem. What you really want to be doing, is regional investment and building a polycentric economy. Doing that removes supply and demand (of property) issues and better distributing your workforce.
I would add that it's not just this government that's been short-sighted, it's all of them - Brown decided to tax private-sector pension funds, directly leading to the demise of almost all private sector DB schemes (he probably only accelerated it, but still). Short-sightedness is built into our political system (democracy) by the very nature of the people they're chasing votes from. It's utterly s
t, but it's hard to get around.(and no, I'm not defending any of them - I think half of the current bunch should be strung-up as an example for the rest)
The biggest headache to deal with ISN'T the state pension, bizarrely - it's all those (still very-generous) public sector pension funds which the unions consider sacrosanct.
https://www.financialreporter.co.uk/cost-of-public...
https://iea.org.uk/media/public-sector-pensions-co...
https://www.ft.com/content/9d9b03d0-55ff-4e2a-8ec7...
FT said:
he average cost of all UK public sector pensions for 2021 is 63 per cent of the salaries. Some of this is paid by employee contributions, averaging 8 per cent, leaving the balance — 55 per cent of salary — to be paid by taxpayers. (This financial year, to April 2022, the percentage cost will be even higher).
55% employer contributions?!? WTAF?!? No wonder they're so militant about keeping them. Or, in other words, every single public sector job is worth nearly 50% more to the employee than the equivalent-salaried private-sector job. And salaries aren't that far apart anymore*, thanks to Blair and Brown's largesse 20 years ago.* Yes, I know the current mob have hammered the public sector for years with freezes and below-inflationary rises, but I'm starting to have a lot more sympathy for those decisions...
Ean218 said:
NickZ24 said:
I wonder if life was like that for Boomers in the UK:
Or is the UK mainstream really like that???
No it wasn't like that for the mainstream, I have never had a DB pension nor has anyone I grew up with, apart from a few that ended up in the public sector, who, yes, have retired early on ludicrous pensions unimagineable to the rest of us.Economist said:
Defined-benefit pension schemes, then still the norm, ensured that retirement would be prosperous.
I think the economist forgot about some classes, i.e. working class. Or is the UK mainstream really like that???
Even then I had to cash in my first couple of DC pensions to get a deposit for our first house when interest rates were heading north of 10%.
It's the same as saying they/we all got free university tuition. That applied to the minority that went. For the majority it was leaving school at 14 or 16, and into the workforce. For many that meant whatever the local industry was like mining or ship building.
Edited by 98elise on Tuesday 7th May 16:17
OoopsVoss said:
Its not a rigged market. That's up there with faking moon landings.
The underlying issue the UK faces - that eclipses 99% of the BS and wailing, the UK isn't polycentric. Its placed huge over reliance on its economic potential in a small proportion of the country. This further exacerbates supply issues.
You can still buy cheap property all over the country - but no one wants to live there, because economically its Romania.
Because ALL pollical parties have failed to invest in diversifying AND decentralising the UK economy, 2 underlying issues have been created:
1) In poorer areas with low incomes / poverty - you can't get on the asset ladder as you don't earn enough or have enough job opportunity to support a mortgage (you become at risk to external parties buying up property to rent)
2) in areas where people do want to live = or close to source of economic power - property is in short supply - creating supply squeezes and rampant asset price inflation
The attempts to rebalance the economy have been appalling bad, its lack of investment by all political parties. Rather than create the conditions for investment and maximising the benefits of expansive Monetary Policy - the entire West was doing (so we had no choice but to go along), we practiced geographic discrimination.
Here's how we farm out Public Sector jobs in the UK:
Near shoring public sector work would be catastrophic for the regions - because no Govt could be bothered to actually properly invest in rest of UK. Just fluffing the London and metro elite echo chamber.
Rigged may not have been the best choice of words. But when times get ropey for property owners and the government "solves" it with things like help to buy, co-owernship, stamp duty breaks etc I think it's fair to say it is manipulated for the benefit of asset owners and not those wishing to be. That invariably benefits the boomer generation on average. They vote.The underlying issue the UK faces - that eclipses 99% of the BS and wailing, the UK isn't polycentric. Its placed huge over reliance on its economic potential in a small proportion of the country. This further exacerbates supply issues.
You can still buy cheap property all over the country - but no one wants to live there, because economically its Romania.
Because ALL pollical parties have failed to invest in diversifying AND decentralising the UK economy, 2 underlying issues have been created:
1) In poorer areas with low incomes / poverty - you can't get on the asset ladder as you don't earn enough or have enough job opportunity to support a mortgage (you become at risk to external parties buying up property to rent)
2) in areas where people do want to live = or close to source of economic power - property is in short supply - creating supply squeezes and rampant asset price inflation
The attempts to rebalance the economy have been appalling bad, its lack of investment by all political parties. Rather than create the conditions for investment and maximising the benefits of expansive Monetary Policy - the entire West was doing (so we had no choice but to go along), we practiced geographic discrimination.
Here's how we farm out Public Sector jobs in the UK:
Near shoring public sector work would be catastrophic for the regions - because no Govt could be bothered to actually properly invest in rest of UK. Just fluffing the London and metro elite echo chamber.
Agree, the regional disparity is a problem and property is not unaffordable everywhere and also agree that having a viable wage to buy it can be problematic for many in the areas where it is technically affordable on an average income. Like I mentioned, I don't know what the solution is, there's no quick one that's for sure.
I just read your more recent post and I'm too lazy and think it would be better signal to noise to reply to both at once. Why should getting rid of the state pension be a goal? The rest of it I tend to agree with but question that part.
havoc said:
55% employer contributions?!? WTAF?!? No wonder they're so militant about keeping them. Or, in other words, every single public sector job is worth nearly 50% more to the employee than the equivalent-salaried private-sector job. And salaries aren't that far apart anymore*, thanks to Blair and Brown's largesse 20 years ago.
* Yes, I know the current mob have hammered the public sector for years with freezes and below-inflationary rises, but I'm starting to have a lot more sympathy for those decisions...
Because relatively low paid public sector jobs are so scarce and hard to get. * Yes, I know the current mob have hammered the public sector for years with freezes and below-inflationary rises, but I'm starting to have a lot more sympathy for those decisions...
Reminds of the people that used to moan when they found out I spent 3-4 months a year skiing in the Army.
Cry me a river, in the meantime here you go.
https://jobs.army.mod.uk/
Was my usual response.
ChocolateFrog said:
As someone previously pointed out on this thread. Women approaching pension age who've had a middling CS career suddenly start to get a whole lot more attractive.
If you're of a certain age 
.I'm alright I married an NHS worker. I joke she's my pension. It sometimes doesn't result in a thump.
OoopsVoss said:
There are ways to kickstart this - you could seed ALL pensions with 8k and in 47 years with an annual RoR of 5.5% you have near 100k pot - before life long contributions).
Or, had that been done in 1977 with the equivalent amount (a little over £1400), a near £20k pot which could buy an index linked annuity at 65 returning almost £20 a week... Long term compound interest calculations always look a bit less impressive after inflation.Bottom line is that one generation got a free pension, and another generation is eventually going to have to pay for two, if the scheme is to be unwound.
cheesejunkie said:
ChocolateFrog said:
As someone previously pointed out on this thread. Women approaching pension age who've had a middling CS career suddenly start to get a whole lot more attractive.
If you're of a certain age .I'm alright I married an NHS worker. I joke she's my pension. It sometimes doesn't result in a thump.
My wife did 20yrs in a part time CS admin role - her pension is £3K/yr. The average public sector pension in payment is £4K/yr. I get more from 4yrs in my first job 40yrs ago.
cheesejunkie said:
I just read your more recent post and I'm too lazy and think it would be better signal to noise to reply to both at once. Why should getting rid of the state pension be a goal? The rest of it I tend to agree with but question that part.
Because longer term its saddling future generations with costs. far better each generation provisions for self. For years the state pension has been miss-sold as a savings scheme - its not; its smoke and mirrors optics that'll get you jailed in the private sector. Eliminating the cost of pensions is worth about 3% of the national debt - do that each year and you have a lot of additional borrowing capacity or you just divert the existing tax income to investment opportunities.If Govt budgets continue in deficit and compound debt, servicing costs become too high (they are paid our of taxes) and you in a debt spiral. We need to get serious about control of deficit and rebuilding our investment capability. Solving regional wealth / opportunity inequality needs at least 500bn to 1trillion of spend or proper investment.
Sheepshanks said:
cheesejunkie said:
ChocolateFrog said:
As someone previously pointed out on this thread. Women approaching pension age who've had a middling CS career suddenly start to get a whole lot more attractive.
If you're of a certain age .I'm alright I married an NHS worker. I joke she's my pension. It sometimes doesn't result in a thump.
My wife did 20yrs in a part time CS admin role - her pension is £3K/yr. The average public sector pension in payment is £4K/yr. I get more from 4yrs in my first job 40yrs ago.
otolith said:
Or, had that been done in 1977 with the equivalent amount (a little over £1400), a near £20k pot which could buy an index linked annuity at 65 returning almost £20 a week... Long term compound interest calculations always look a bit less impressive after inflation.
Bottom line is that one generation got a free pension, and another generation is eventually going to have to pay for two, if the scheme is to be unwound.
Multi post become annoying - but maybe I was a bit subtle. The point of kickstarting the pot is placebo effect - its only a kickstart - contribution for 45+ years of working life is mandatory - I did say that.Bottom line is that one generation got a free pension, and another generation is eventually going to have to pay for two, if the scheme is to be unwound.
For a vast sway of people at 21 saving or having 8K is an impossibility when they are beginning on the life journey. Its a bit of a cultural reset.
OoopsVoss said:
Because longer term its saddling future generations with costs. far better each generation provisions for self. For years the state pension has been miss-sold as a savings scheme - its not; its smoke and mirrors optics that'll get you jailed in the private sector. Eliminating the cost of pensions is worth about 3% of the national debt - do that each year and you have a lot of additional borrowing capacity or you just divert the existing tax income to investment opportunities.
If Govt budgets continue in deficit and compound debt, servicing costs become too high (they are paid our of taxes) and you in a debt spiral. We need to get serious about control of deficit and rebuilding our investment capability. Solving regional wealth / opportunity inequality needs at least 500bn to 1trillion of spend or proper investment.
Understood. For generations that has been the deal. Changing it will require a hell of a long time as you've said. You can't flick that switch overnight and you need a strategy for dealing with those who don't work, have never worked, and will never work. Whether for legitimate or illegitimate reasons. But otherwise yip I can maybe agree with that strategy but I'm thinking about it.If Govt budgets continue in deficit and compound debt, servicing costs become too high (they are paid our of taxes) and you in a debt spiral. We need to get serious about control of deficit and rebuilding our investment capability. Solving regional wealth / opportunity inequality needs at least 500bn to 1trillion of spend or proper investment.
Try getting that last paragraph past any government regardless of rosette colour. In how many generations do we need to get serious about control of the deficit? I'm not disagreeing but if the previous one has been profligate should it be another burden on gen-x to save the millennials. I'm joking. I know that's not what you're suggesting. But deficit control is a bit ideological in a world where your neighbour is doing something different.
FWIW I think the only route to increased productivity in this country is improved education. Tell me any party with that as a major policy agenda. I don't really care about the w
k around adding VAT on private education costs although I have given my opinions on that thread. It's a sideshow to the bigger problem of how other countries are educating their children better than here. Deal with that and you'll have a brighter future that you and I might not be around to see.Gassing Station | Finance | Top of Page | What's New | My Stuff