Boomer life according to the economist

[Panamax]

brickwall said:

The electoral split is basically now “retired” vs “working age”.

Hence the massive sensitivity around the "triple lock" of State Pension indexation.

On the other hand oldsters must be getting worried about inability to get a doctor's appointment and the crumbling structure of social care.

Since Labour haven't expressed any threat to either of the above, retired people may be less committed to Rishi and his mates than was previously the case.

As I've previously expressed, anyone with CGT gains had better watch out if Labour get in!

[ThingsBehindTheSun]

My parents both left school at 15 without a single qualification between them. My father spent his whole working life as a mechanic and my mother worked low paid jobs until she managed to get a job in an office when she was 40.

They bought their council house in 1982 for £16K and have moved twice since then. The only financial decision they made was my mother paid into her company share scheme and came out with a low six figure sum.

Mother retired at 62 as she didn't want to work anymore and my dad went down to three days a week. He was going to retire but Covid hit so he took the furlough money for a year and then retired as soon as they wanted him back.

They have a nice, detached fully paid for house, spend three months a year travelling Europe in their motorhome and seem to go on endless cruises.

For the last 20+ years I have earned more than their combined income and my partner earns slightly more than me.

Yet despite this I really don't think I will be able to retire at 62 and have a retirement like theirs.

They are currently getting 10% increases in their state pension per year. I am 50 years old, I seriously doubt I will get my state pension much before I am 70.

[havoc]

ThingsBehindTheSun said:

They have a nice, detached fully paid for house, spend three months a year travelling Europe in their motorhome and seem to go on endless cruises.

For the last 20+ years I have earned more than their combined income and my partner earns slightly more than me.

Yet despite this I really don't think I will be able to retire at 62 and have a retirement like theirs.

They are currently getting 10% increases in their state pension per year. I am 50 years old, I seriously doubt I will get my state pension much before I am 70.

That is pretty much the stereotypical situation of Boomers vs Gen X.

Millennials and Gen Y are likely to be worse off in the medium-term due to cost of housing / cost of living, but they (Y's in particular) have more long-term opportunity if a government can find a miracle cure to the headache of retirement, and they at least know to start pension saving in their teens if possible.

[turbobloke]

ThingsBehindTheSun said:

They have a nice, detached fully paid for house, spend three months a year travelling Europe in their motorhome and seem to go on endless cruises.
https://www.pistonheads.com/gassing/
For the last 20+ years I have earned more than their combined income and my partner earns slightly more than me.

Yet despite this I really don't think I will be able to retire at 62 and have a retirement like theirs.

They are currently getting 10% increases in their state pension per year. I am 50 years old, I seriously doubt I will get my state pension much before I am 70.

None of which is their fault any more than any of it is your fault - not that you said it was - we grow up and work in the context of political policies put in place before we were born, and that date of birth isn't up to us either.

The UK and England specifically once became one of the, if not the most, prosperous locations in the world - from the early 1700s through to the 1800s, a pox on them (and there probably was, each generation faces its trials and triumphs).

The bile directed by some at so-called boomers is ridiculous.

[havoc]

turbobloke said:

The bile directed by some at so-called boomers is ridiculous.

It's not bile, except where boomers decide to call other generations out for variously spending too much / not working hard enough / 'whinging about their problems', all the while trying to ignore / hide these windfalls that they enjoyed that other generations are now paying* for.

That hypocrisy is what a lot of people are calling out - a generation that's so self-absorbed that some of them refuse to recognise their good fortune is plain luck of the draw, and instead are punching down at those subsequent generations who ARE finding it quite a lot tougher financially.

Yes, some of this is down to unreasonable expectations fostered by 2 decades of excessive spending off the back of unusually low interest rates and largely-unregulated lending (which, again, the Boomers were best-placed to take full advantage of). And yes, as a nation we do need to take a cold, hard look in the mirror and accept that Britain isn't 'Great' anymore**, and sadly we can't have what we used to have. So I do think some of the Millennial / Gen-Y complaints are driven by a mix of envy and unrealistic expectations. But at their core there is still a very valid complaint.


So please TB...explain why it's ridiculous, rather than just throwing simplistic statements around?



* Working generations are paying boomer DB pensions, as UK pensions are a bad Ponzi scheme. Housebuyers now (so working generations again) are paying the cash to pre-war and boomers who are downsizing or to their estates when they die. And the massive increase in healthcare burden caused by a substantially ageing population and longer lifespans is...guess what...being paid for by working generations. Boomers benefitted during their working lives and now continue to benefit in retirement, with this second tranche being paid for by the rest of us.
(the three items above are historically highly unusual as those born since c.1930 are the first generations that have enjoyed both extended peacetime (removing hundreds of thousands of early deaths in wars) and substantial improvements in healthcare and life expectancy.

** Without opening a can of worms, part of this is the consequence of the Brexit vote and the consequent failure to achieve anywhere near the promised deal...and the Brexit vote was carried through by...ooh, Boomer and Pre-War voters!

[Slow.Patrol]

turbobloke said:

The bile directed by some at so-called boomers is ridiculous.

I'm a Boomer.

My parents probably had a better quality of life. My Dad built three homes in his lifetime. The one he built in Berkshire in 1962 for £2,500 is now worth north of £1m. They got better NHS service. The local GP used to make same day house calls if we were really sick. Both parents retired in their late 50s. I remember doing my Dad's tax return after he died and realising his council pension combined with his state pension was more than I earned a month.

They also had two holidays abroad every year when they retired, usually spending most of February somewhere warm like south Africa as well as a few UK breaks.

Both lived to early/mid 80s. I'm not sure I will make it that far.

So yes, they probably had a better life quality, but I don't hate them or their generation because their life was richer.

[brickwall]

Panamax said:

brickwall said:

The electoral split is basically now “retired” vs “working age”.

Hence the massive sensitivity around the "triple lock" of State Pension indexation.

On the other hand oldsters must be getting worried about inability to get a doctor's appointment and the crumbling structure of social care.

Since Labour haven't expressed any threat to either of the above, retired people may be less committed to Rishi and his mates than was previously the case.

As I've previously expressed, anyone with CGT gains had better watch out if Labour get in!

The big change is that Labour are likely to get in without needing to rely on retiree votes.

Labour’s electoral base will be “working age people” - so expect them to lean far more heavily towards policies this group cares about.
(Equally, this is a broad church, so to keep the group together they will have to be careful not to lean too far one way or the other on certain issues)

As the Economist article points out, this is where the rubber really hits the road - a Labour gov’t will be far more willing to administer painful policies to pensioners than we have previously seen.

I wouldn’t exclude them from hitting the triple lock in their first budget - it would save a ton of money, doesn’t hit their core voter base, and they have 4-5 years of subsequent government to ‘recover’ before the next election.

[OoopsVoss]

brickwall said:

The big change is that Labour are likely to get in without needing to rely on retiree votes.

Labour’s electoral base will be “working age people” - so expect them to lean far more heavily towards policies this group cares about.
(Equally, this is a broad church, so to keep the group together they will have to be careful not to lean too far one way or the other on certain issues)

As the Economist article points out, this is where the rubber really hits the road - a Labour gov’t will be far more willing to administer painful policies to pensioners than we have previously seen.

I wouldn’t exclude them from hitting the triple lock in their first budget - it would save a ton of money, doesn’t hit their core voter base, and they have 4-5 years of subsequent government to ‘recover’ before the next election.

I don't really have an opinion on it, but find the argument a bit fanciful that Labour can isolate the negative voting impact to just said retiree's. Surely anyone 50+ might be thinking steady on - I need that inflation linked pension. Retirement saving in this country is woeful, in fact most people 40 and above with average pension provisions ought to be in favour of the triple lock - because they are short on time to make up private provision (versus other rising costs). I think the spill over might be larger than anticipated, especially when people actually get into the voting booth.

I don't think Labour will make a success of the economy going around malleting certain sectors because they've ridden the generational asset gravy train. Its going to be a lot trickier than that. I think wealth taxes are a strong possibility, which are likely fairer IF they implement them correctly. Where they ought to be focusing is benefit tapering and stopping the asanine cliffing that make benefits more attrcactive than workforce engagement.

[ITR1]

Slightly off topic, but there was a professor of politics on BBC R4 a couple of weeks ago who said, in the context of a discussion about the timing of the next general election, that the Tories lost around 23,000 votes per month net due to natural wastage (i.e. older voters dying). Over a year it amounted to around half a percentage point swing in the vote.

[Gas1883]

Born in 61 & married 80,s , I can’t remember it being easy , I drove round in a £100 cortina with mastic for inner / out seals , our furniture was hand you downs , I worked 7x12 hr nights & the wife worked 3 jobs ( I still looked at the bills & couldn’t make it all add up ) hols were mostly a day out sat on skeggy beach , no help from parents .
Compare that with daughter who’s car tax / ins / service is paid my mum & dad , car apart from trade in paid by mum & dad , fridge freezer , washer & dish washer ( I’ve spent 40/50 yrs washing plates cups in a bowl ) paid for mum & dad , came on hol to ibiza last year , yes you’ve guessed it , paid for by mum & dad , vets for her cat paid by mum & dad etc etc etc oh yea she’s a nurse & as she lives within a 10 mile radius of her hospital she can’t get a permit , so dad pays the £8 per day , £64 this emonth
Yet all I hear from these kids ( excluding my girl who can’t be more thankful of the help mum / dad give her ) is how easy we had it , just a look round my girls / partners house ( massive tv,s , computers etc , Mexico hols ) I really don’t know who there trying to convince , not me that’s for sure !!
I’m 62 now & still doing 5/6 days a week , 70/80 hrs , up 2 am & can be 18.00/ 19.00 befor I get home
These kids these days don’t know how easy they’ve got it .

[okgo]

Excellent.

[brickwall]

OoopsVoss said:

brickwall said:

The big change is that Labour are likely to get in without needing to rely on retiree votes.

Labour’s electoral base will be “working age people” - so expect them to lean far more heavily towards policies this group cares about.
(Equally, this is a broad church, so to keep the group together they will have to be careful not to lean too far one way or the other on certain issues)

As the Economist article points out, this is where the rubber really hits the road - a Labour gov’t will be far more willing to administer painful policies to pensioners than we have previously seen.

I wouldn’t exclude them from hitting the triple lock in their first budget - it would save a ton of money, doesn’t hit their core voter base, and they have 4-5 years of subsequent government to ‘recover’ before the next election.

I don't really have an opinion on it, but find the argument a bit fanciful that Labour can isolate the negative voting impact to just said retiree's. Surely anyone 50+ might be thinking steady on - I need that inflation linked pension. Retirement saving in this country is woeful, in fact most people 40 and above with average pension provisions ought to be in favour of the triple lock - because they are short on time to make up private provision (versus other rising costs). I think the spill over might be larger than anticipated, especially when people actually get into the voting booth.

I don't think Labour will make a success of the economy going around malleting certain sectors because they've ridden the generational asset gravy train. Its going to be a lot trickier than that. I think wealth taxes are a strong possibility, which are likely fairer IF they implement them correctly. Where they ought to be focusing is benefit tapering and stopping the asanine cliffing that make benefits more attrcactive than workforce engagement.

I agree with you on workforce incentives. The trouble is that costs money, and they’ll have to find it somewhere.

I don’t know if they’ll hit the triple lock, but I wouldn’t exclude the possibility. It’s just such a massive bill over a 5-year term it might be too much to resist. Yes it’ll carry electoral pain outside the retired age groups, but the younger you go the more people think the state pension/triple lock won’t exist by the time they get to retirement anyway, so are less attached to it.

The narrative would go:
“The Tories left the economy and public finances in a mess, we have to make tough decisions so that we can continue to fund Our NHS”
“We simply can’t afford to increase all state pensions by X% this year; we will increase by the growth rate of [much lower number]. We will make sure our poorest pensioners are protected from the rising cost of living by increasing pensions credit by more than inflation”

Repeat same sort of thing for “believe those with the broadest shoulders should bear the greatest burden” - then abolish the winter fuel payment for all except those in receipt of pension credit.

I agree with you on wealth taxes, but the mechanism is hard for a “pure” wealth tax. There’s a wealth tax in Switzerland (that well-known hotbed of punitive taxation!) but it requires everyone to fill in a tax return and declare their assets and liabilities on it.
In the UK I suspect the chosen mechanism would be council tax - maybe starting with some value-linked “super band” for properties worth >£1M (0.5% of value above >£1M?)
They might even try something smart to make sure the burden falls on owners rather than residents, so it doesn’t land bills on the doormats Labour-voting renters in London seats.

[OoopsVoss]

brickwall said:

I agree with you on workforce incentives. The trouble is that costs money, and they’ll have to find it somewhere.

I don’t know if they’ll hit the triple lock, but I wouldn’t exclude the possibility. It’s just such a massive bill over a 5-year term it might be too much to resist. Yes it’ll carry electoral pain outside the retired age groups, but the younger you go the more people think the state pension/triple lock won’t exist by the time they get to retirement anyway, so are less attached to it.

The narrative would go:
“The Tories left the economy and public finances in a mess, we have to make tough decisions so that we can continue to fund Our NHS”
“We simply can’t afford to increase all state pensions by X% this year; we will increase by the growth rate of [much lower number]. We will make sure our poorest pensioners are protected from the rising cost of living by increasing pensions credit by more than inflation”

Repeat same sort of thing for “believe those with the broadest shoulders should bear the greatest burden” - then abolish the winter fuel payment for all except those in receipt of pension credit.

I agree with you on wealth taxes, but the mechanism is hard for a “pure” wealth tax. There’s a wealth tax in Switzerland (that well-known hotbed of punitive taxation!) but it requires everyone to fill in a tax return and declare their assets and liabilities on it.
In the UK I suspect the chosen mechanism would be council tax - maybe starting with some value-linked “super band” for properties worth >£1M (0.5% of value above >£1M?)
They might even try something smart to make sure the burden falls on owners rather than residents, so it doesn’t land bills on the doormats Labour-voting renters in London seats.

I don't think its enough. They need more money. I do agree on the spreading the load and protecting the most vulnerable, but we are probably 40+ years away from replacing the pension in any meaningful way and realistically they need to legislate that now for 18 year olds entering the workforce. NOT anyone who has already been working and been scammed into the greatest miss-selling scandal of all time. If the state pension was sold by a private company and how they present "accrued benefits", the whole leadership team would be doing bird.

Its a fairly radical plan, but government debt is looked at (in the market) in fairly long dates - mostly to demonstrate how horrific its going to get (for the US anyway). Labour could embark a fairly radical plan (as they likely have at least 2 terms) - and embark on a hefty borrow to invest plan (invest only) - because they can't do it through tax - they have a chance to start closing wealth gap. The UK has one of the lowest debt to GDP burdens in the G7, naturally high savings and despite anaemic growth - isn't as hamstrung by industrial complexity like Germany (for instance). Now a lot has to go correct, and Labour have to seriously grow up on policy - but if they maintain centrist, technocratic policy they could turn this ship around. The Tories will lurch to the right, Labour needs to keep the loons on the left in check otherwise we are in trouble, but its quite likely the UK is past peak populism after Brexit (which in the medium term will be viewed as non-event economically), Boris etc.

Basically people are going to whine and bh for a long time. because there are no easy short term fixes; but no one is doing asset price destruction.

[brickwall]

OoopsVoss said:

I don't think its enough. They need more money. I do agree on the spreading the load and protecting the most vulnerable, but we are probably 40+ years away from replacing the pension in any meaningful way and realistically they need to legislate that now for 18 year olds entering the workforce. NOT anyone who has already been working and been scammed into the greatest miss-selling scandal of all time. If the state pension was sold by a private company and how they present "accrued benefits", the whole leadership team would be doing bird.

Its a fairly radical plan, but government debt is looked at (in the market) in fairly long dates - mostly to demonstrate how horrific its going to get (for the US anyway). Labour could embark a fairly radical plan (as they likely have at least 2 terms) - and embark on a hefty borrow to invest plan (invest only) - because they can't do it through tax - they have a chance to start closing wealth gap. The UK has one of the lowest debt to GDP burdens in the G7, naturally high savings and despite anaemic growth - isn't as hamstrung by industrial complexity like Germany (for instance). Now a lot has to go correct, and Labour have to seriously grow up on policy - but if they maintain centrist, technocratic policy they could turn this ship around. The Tories will lurch to the right, Labour needs to keep the loons on the left in check otherwise we are in trouble, but its quite likely the UK is past peak populism after Brexit (which in the medium term will be viewed as non-event economically), Boris etc.

Basically people are going to whine and bh for a long time. because there are no easy short term fixes; but no one is doing asset price destruction.

I agree.

Labour have to “go for growth” - not in the Liz Truss sense, but in a sensible, hard-nosed, technocratic way that yields long-term results.

They’ll have to throw some red meat around politically (e.g. private school VAT) but done right that stuff will be economic noise on the signal.

They’ve almost certainly got at least 2 terms, especially if the Tories lurch to the right and select someone like Braverman as leader.

The question is - what would a genuine growth-oriented policy book look like starting in term one?

On the capital side I think mine would be (funded through borrowing)
- Borrow and build lots of housing; yes grant permissions to developers, but also directly build loads of state-owned social/council housing. Aim to replace all the council housing stock lost over the last 30 years.
- Borrow and build infrastructure - I’d be up for state-owned SPVs that owned power stations, reservoirs, train tracks, etc. The let to private operators under short/long term operating agreements.

There’s then the labour market. We’ve got to get more people back into work - that will mean addressing benefits tapers, childcare costs, high marginal tax rates (across everything from Income tax, NI, pension tapers, etc.)

I also think our returns to incremental individual productivity are too low - the actual difference in your pocket between being a low-productivity worker (eg supermarket clerk) and a high-productivity one (e.g., software engineer) is simply not large enough in my view. Gross Salary differentials are too small, and combined with increasing marginal tax rates the incentive is too weak for enough people to put the effort in to pursue a higher productivity path.

[OoopsVoss]

brickwall said:

I agree.

Labour have to “go for growth” - not in the Liz Truss sense, but in a sensible, hard-nosed, technocratic way that yields long-term results.

Arguably we've seen decent growth under exactly these technocratic conditions. Politically we are past peak populism, but I do see this age schism being long term divisive - and both sides are guilty of being prats. I'm Gen X so staying well out of it.

[SturdyHSV]

Gas1883 said:

Born in 61 & married 80,s , I can’t remember it being easy , I drove round in a £100 cortina with mastic for inner / out seals , our furniture was hand you downs , I worked 7x12 hr nights & the wife worked 3 jobs ( I still looked at the bills & couldn’t make it all add up ) hols were mostly a day out sat on skeggy beach , no help from parents .
Compare that with daughter who’s car tax / ins / service is paid my mum & dad , car apart from trade in paid by mum & dad , fridge freezer , washer & dish washer ( I’ve spent 40/50 yrs washing plates cups in a bowl ) paid for mum & dad , came on hol to ibiza last year , yes you’ve guessed it , paid for by mum & dad , vets for her cat paid by mum & dad etc etc etc oh yea she’s a nurse & as she lives within a 10 mile radius of her hospital she can’t get a permit , so dad pays the £8 per day , £64 this emonth
Yet all I hear from these kids ( excluding my girl who can’t be more thankful of the help mum / dad give her ) is how easy we had it , just a look round my girls / partners house ( massive tv,s , computers etc , Mexico hols ) I really don’t know who there trying to convince , not me that’s for sure !!
I’m 62 now & still doing 5/6 days a week , 70/80 hrs , up 2 am & can be 18.00/ 19.00 befor I get home
These kids these days don’t know how easy they’ve got it .

So it sounds like without your very generous enabling, despite working full time as a nurse (and presumably her partner also working) your daughter would not be able to afford to have a car, she'd have no fridge freezer, no washing machine / dish washer, no holidays, no vet for her cat, couldn't afford to park the car she couldn't afford at her place of work. She is also very grateful for your help because she knows she wouldn't be able to afford the things you're giving her.

In fact, possibly in order to enable you to provide her with those things, you're still working 80 hours a week at 62 years old.

That doesn't sound particularly ideal.

Would be fascinated to know how you hear from so many of these kids these days, it certainly won't be on PH!

[NRS]

turbobloke said:

None of which is their fault any more than any of it is your fault - not that you said it was - we grow up and work in the context of political policies put in place before we were born, and that date of birth isn't up to us either.

The UK and England specifically once became one of the, if not the most, prosperous locations in the world - from the early 1700s through to the 1800s, a pox on them (and there probably was, each generation faces its trials and triumphs).

The bile directed by some at so-called boomers is ridiculous.

It’s not just about political policies put in place before we were born. The boomer block despite having loads dying is still more powerful than the young working population block because there is more of them. They have had politicians tripping over themselves to do whatever they can for this block because it keeps them in power.

[Steve H]

NRS said:

It’s not just about political policies put in place before we were born. The boomer block despite having loads dying is still more powerful than the young working population block because there is more of them. They have had politicians tripping over themselves to do whatever they can for this block because it keeps them in power.

Isn’t 90% of history the story of the older and more established/powerful part of the population being sustained by the work of the younger population?

Everyone gets to wait their turn. The only difference now is that younger people have more of a voice and a greater say than the 25 year old boomers had. Or at least, they get to write stuff for The Economist.

[HIAO]

The generalisation and judgement of people by generation is depressing and divisive. It’s all a bit hunger games.

I wouldn’t swap my health, life or age with anyone else.

There’s no value in resenting older people for how they acquired their money or how they’ll spend it before they die.

I’ve already inherited something of greater value to me - a set of values and independence.

[havoc]

HIAO said:

The generalisation and judgement of people by generation is depressing and divisive. It’s all a bit hunger games.

I wouldn’t swap my health, life or age with anyone else.

There’s no value in resenting older people for how they acquired their money or how they’ll spend it before they die.

I’ve already inherited something of greater value to me - a set of values and independence.

I genuinely don't disagree, but this is just like the statement "money can't buy you happiness" - very easy to say when you're on the right side of the divide, and a lot harder to stomach when you're on the wrong side and it just feels patronising.
(And that one has been sociologically proven to be false, up to an equivalent of $100k income per year, after which it becomes true)

I'm a Gen-X - I'm in the middle here, benefitting from owning my own (plenty good enough) home (for >20 years) but facing a late retirement and comparatively meagre pension.


What I also wholeheartedly agree with in your statement is the comment about it being divisive...and I think both sides are guilty of that, in different ways. Sadly this is what happens when the pot starts to shrink - people fight for to keep/get "their share" of it.
The even sadder thing is in the UK that the wealth divide is bigger than at any point since the Victorian era, and the government has WASTED tens of £billions on stupid schemes and corrupt Covid procurement. All this aggro between Boomers and Gen-Y should be directed at those at the top who are fking the remaining 99% of us over - fix that problem and the Boomers can retire quietly while Gen-Y will actually be able to afford stuff.