Wednesday, 5 October 2016

It's Not About Them And Us

A recent report tells us that younger generations have less wealth at thirty years or so of age than those born earlier. In fact what it actually says is that those born in the eighties have roughly half the wealth, as adults, of those born in the seventies or earlier. Much of the report focuses on rising house prices, from which those born earlier are deemed to have benefitted.

Having been born in the nineteen fifties I've noticed a few other changes. I think we can assume the Institute Of Fiscal Studies got its sums right and that the younger generations are accumulating less wealth, but there's much supposition and controversy in the media as to WHY. Just recently I qualified for my old gits Railcard and for the first time in my life I went first class on a train. I was surrounded by students.

When I go out to eat, which is rare and special occasions only I'm surrounded by young people for whom it seems to be a regular and frequent exercise. I'm not just assuming this, I talk to young people too. In addition someone I know well who works for a Housing Association has had to turn away applicants for the help to buy scheme, because they could save for a deposit but chose to run two cars, have multiple foreign holidays, eat out twice a week etc. They could afford to save for a deposit but chose not to.

My parents considered the only acceptable debt to be a mortgage, anything else was irresponsible. Like many of my generation I did not go to university, so no government grant for me thank you, I went to work. I had a job in the nineteen seventies where I earned eleven pounds a week and tried to live on ten and put one pound in the Building Society each week. by the end of the week I was eating left overs from a transport cafe up the road.

I'm not suggesting it was like that for everyone, or that people should expect to live like that today, but living within ones means was a cultural ethic. When I got promoted I got on the housing ladder and slept on the floor until I could afford a bed. I didn't buy a bed, or carpets for that matter on credit. I did not eat out other than a Cornish pasty at a local pub, which was jolly cheap and had meat, veg and pastry; that was a balanced diet.

I'm very sorry that students have to pay tuition fees, I've said before that the government should invest in education and in the future in preference to nuclear missiles. The motive was to enable more people to go to university, but not everyone suits university and we need more apprentices and trades, that's part of the reason people come into this country which has so upset the apple cart and led to people like May and Johnson seizing power. Tuition fees also encourages the pay later mentality, which leads to less wealth later.

I cannot remember the last time I changed my mobile phone, or bought a computer or a tablet. I'm still running Windows XP, many younger people upgrade all the time. Student loans and a culture of credit have taught people that debt is OK, and crikey hasn't the government embraced that concept too, Britain is the second most indebted country on the planet. The Chancellor has just abandoned any thought of wiping out the deficit by 2020 too. Let alone the debt.

I consider my financial situation to be OK, because I'm not in debt and can get by and have some fun from time to time. I have assets, but I lived through fifteen percent mortgage interest rates and now can get bugger all interest on my savings. Different generation, different circumstances.

The Institute Of Fiscal Studies is doubtless right about the actual wealth and assets of younger people compared with us at the same age, BUT I don't think they've grasped, or even tried to grasp the effects of credit and the must have it now society.

They haven't recognised the differences in how people live and how they spend on a social life, travel and the latest technology in a way we never did. I did ten test jumps on a very dubious parachute in the seventies, for twenty pounds a time to buy my first ever stereo system. It's all very well saying tech didn't exist then but music, tv, cars and motorcycles and all sorts of luxury goods did, we just didn't see them as a right, but as something to be earned.

Many companies used to have defined benefit pension schemes in the old days and we're all supposed, in my generation, to have benefitted whilst younger people have less beneficial and more expensive defined contribution schemes. In fact we didn't all work for big companies offering such schemes, many of us paid into our own private pension schemes and saw them substantially ruined by Gordon Brown.

In common with younger people even my generation has seen the state pension put back to a later date and it's not particularly generous, you wouldn't want to have to live on it! We all need to recognise that there are challenges and opportunities, different generations face different challenges and opportunities and its not a them and us thing. Although I do apologise that many older people voted the younger generation out of Europe against their will, I wasn't one of them I have to say.

The Labour party is moving left, the Tories right although Theresa May had the cheek to say today that the Tories occupy the centre ground. They don't, only the Liberals can lay some claim to that, what's left of them. If you want to get on, work, save and invest. Don't vote Labour they'd destroy what's left of the economy, campaign for the single market, don't give up and think about joining the Liberals and try to create a party of common sense.

Good luck, you're the future.

You could also try this!

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