Babyboomers: £220,000 in debt

Writing as an economist, I have never read so much economic bullshit nonsense in my life. The whole article is ridden with doubtful statistics, and ludicrous conclusions.

I noticed one of the organisations behind the article was something called the Intergenerational Foundation. This is the outfit that brought out the report on older people under occupying houses and came up the brilliant idea that to help free up houses for families older people should sell their big family homes and move to smaller ones, or in other words enter into competition with first time buyers for smaller properties.

I actually downloaded and read the full report on underoccupation and it was shot through with errors, poor research and unsupported conclusions. I see nothing in this news item to suggest that the report that forms the basis of it is any better.

The Guardian's raison d'etre is getting outraged about social injustices and it leaves no set of doubtful rubbish statistics unturned in its effort to find them no matter how trivial or erroneous. There is no outrage like that of an earnest left-wing journalist.

It would seem that in most places the average wage earner would need at least 6 times their earnings to buy a house. This is the problem, no lenders will lend this multiple. Understandable, it has to be paid back and that is what started to problem in the USA.

But how do people save enough to put down a large deposit, without family help?
It is all very well having 'help to buy' 'first time' buyer schemes, but the % left still has to be paid for.

I would not like to be starting out again now. x

And to compare rental costs then with rental costs now, and the proportion of income that took.

Elegran it would be interesting to look at the proportion of income needed to buy a house these days, especially here in the S.E.

Taking an average wage of about £25,000, it would cost 14 times gross income to buy a smallish 3 bedroomed semi.

Just to clarify the few mentions of public sector pensions, whatever term you use, they are better than in the private sector. Very few of us have pensions which rise with inflation. Most of us have had to pay in a higher proportion of our salary into our pension and get less back. Not a complaint, good for those who have been able to do it.

Yes it is not real money is it, unless people have additional properties that they don't live in.

When we bought our first house (1963) we compared the proportion of our income that it cost with the proportion of our in-laws' income that they had paid for their first house. It was the same. There was no magic golden age for buying a house. It was a big investment that took a brave plunge and most of your income.

You can only judge comparative wealth by how much money comes in and how much goes out - and what people choose to spend their money on.

If someone can afford to holiday abroad, eat out frequently, and buy a new car every couple of years, are they poor?

If they furnished their new house fifty years ago with cast-offs from family, ate shepherds pie and a lot of lentil soup, spent holidays in their inlaws' spare room, kept a rickety car for many many years - were they rich?

I had an awful struggle financially to buy this house in 1996 but I am pleased that I did. I was living in a 2 bedroom almost new doll's house and I could not stand it. I wanted a bit more space so this, although newish when I bought it is a 3 bedroom and obviously larger. I think that my downstairs loo and bathroom would sell the house, not that that is going to happen any time soon (I hope). It has almost quadrupled in value since I bought it, but my house is my home, not a selling machine.

When we moved from the SE to Wales nearly 30 years ago we got a bigger house here for the same price, and London prices have gone up out of all proportion since then. I doubt we could buy our old house back for what we could sell this one for. We also had to pay the 15% mortgage interest rate when we moved from a cheaper area to London (how on earth did we do it?).
But if it is your home it is not making you 'rich' unless you want to sell and move somewhere cheaper. The property programmes on tv always talk about property as investments and something to make money on whereas most people want a home to live in.

I always laugh when I hear about 'gold plated Civil Service pensions' as well. At least it's a welcome bit on top of my State pension.

Is this another load of crap information from the Intergenerational Foundation (very dangerous anti-elderly group).

Yes I certainly did not think everyone in London property rich. But I do have relatives in London and I guess that my cousin's shabby 200 year old house in the east end is probably worth best part of a million, even with its 50 year old bathroom and kitchen. Done up, it certainly would be.

I would love to live in a house worth 1 million pounds, I would not have problems paying for care costs if required, in the future.

I agree durhamjen that houses are a lot more expensive in the SE than in eg the north of England. We did earn marginally more because the "London Weighting" kicked in and was very helpful, especially paying for transport costs.

No they are certainly no are they rosequartz - only the high flyers.

I would also like to point out that the majority of civil servants were not well paid and certainly not in the 'super-tax' bracket.

That's why the staff at JL did not get such a large bonus as last year. They are making up the deficit over the next few years, Jane.

Well I have read the article as far as my limited powers of comprehension would permit, and it did not appear to me that it was boomer-bashing.
It seemed to be basically saying that it is all very complicated, and boomers are not a homogeneous group.
The most alarming statement was the revelation that there is a £1billion deficit in John Lewis's pension fund

JessM said in the south east. You cannot deny, Charley, that lots of people in the south east have properties that are worth more than those in the south west or the north east. That's all she was saying, not that everyone in London is property rich.

I live in the SE, London to be precise, but would not class myself as being "property rich".

Yes, it can't possibly be all nonsense etc. if it's in the Guardian!

I haven't paid off my mortgage and am never likely to

I was not concentrating when I wrote previous post...
But I would like to say:
Averages are very misleading. There are a fair number of property rich people living in the south east - enough skew any calculation of the average (mean) to make it look like we are all well off.

Thanks Ana.

In the 11th para of the article it does quote the £220,000 I mentioned in the OP.

I would want to know a bit more about how this figure was arrived at before I decided it was 'bollocks/bullshit/nonsense' (quote from above)

not good for your BP to read this article or the comments.
the only thing I found rang true was that this disparity is between rich and poor not generations.
it is true that the average 'boomer' (how I hate that label) has a household income of around £24K and although they may have paid off their mortgages this has been done by dint of working and saving hard.
it is all very well citing - you bought your house for £8K and we have to pay £150K for the same house - BUT the salary at the time of buying that £8K house was probably less than £4K per annum
it is only in the last 10-12 years that house prices have been bid up by reckless lending and easy credit. These same ridiculous house prices apply to BBs as well as everyone else if they move house.
this is the Guardian - so find they are often economical with the truth
and the final thing - we pay tax too

And then there was the free child care, elder care etc that many of us provided. More divide and rule nonsense.

Also, today there is a great deal of retail competition. We had very few choices when buying clothes or anything for the home. Now everywhere is trying to undercut each other.
Just come back from buying GC some new clothes and didn't pay full price for anything! The well known food and knicker shop has amazing bargains!
(Spending my Babyboomer pension!)x

I was penalised when I had an endowment mortgage because I have a long term chronic illness which did not cause any problems re my work or the mortgage company as they got their money every month. My salary covered the mortgage and we lived on the salary that my ex earned.

When we parted company I had to move and downsize.