"Rich" pensioners - give us your views

The difficulty is that younger people tend to look at what we have now and assume we always had it.

They forget that when we were their age we were in a similar position to them, not well off and struggling to get going and acquire houses etc etc. They also forget that, while we may have had some things easier, houses, certainly more affordable as far as price went, but they forget, or perhaps do not know that, for most of us, interest rates on our mortgages, rarely if ever fell to less than 7% and for a lot of the time were well over 8%. I can certainly remember times when, with two small children and only DH bringing in an income, our mortgage accounted for half our take home pay.

It is the same with university education. Yes, it was free but only about 4% of the population went to university. Many people juggled their professional training, for which they paid, with full time jobs as there were no loans available for education. I was fortunate to go to university, but I paid for my professional education myself and fitted my studies around small children, a job and being virtually a single parent as DH's work at the time meant that he was away from home for half the year.

I can remember in my late 20s/30s, looking at my parents, in secure jobs, occupational pensions and with a house that I felt DH and I could never aspire to own, and envying them. We do now have a comparable house, but our careers are a story of redundancies, job moves, to avoid redundancy and premature voluntary redundancy into early retirement. It means that our occupational pensions are not what they could have been had we spent 40 years with the same employer. However my parents were born into one World War and fought and lived through another.

Every generation has its advantages and disadvantages and people under 40 who are in good jobs - and when all is said and done, many are, are far, far better off than we were in comparable jobs at comparable ages. DC and families are careful with money and do not have extravagant lifestyles, but I can see money being casually spent on things that we would not have been able to afford or would have thought long and hard before considering; things as trivial as books, records, visits to the theatre.

Very interesting to watch the piece on "The Daily Politics" just now.

The chap who was speaking for the idea that many pensioners have benefited disproportionately with the government prioritising the needs of pensioners over younger people (Angus Hanton of the Intergenerational Foundation) did not seem too keen to make State pensions means tested but did want a fairer tax system.

He also pointed out that, while grandparents do provide a large amount of child care, we are looking at the problem the wrong way round. The younger generation are having to work much harder to achieve the buying power of the household income Baby Boomers had. He said that, if you include repayment of student loans and NI many can easily be paying nearly 50% income tax whereas Pensioners receiving income from Pensions and perhaps rentals will be paying much less.

I found it an interesting viewpoint.

Few people inherit old money nowadays. If you reach retirement age with a decent amount of savings and income its because you made certain choices. You chose to train for a profession no doubt living quite impecuniously in your 20/30s. You chose to live responsibly by budgeting and planning such things as life insurance and mortgages. You probably saved regularly and made savings in other areas. So now, after years of thinking ahead, planning sensibly and bringing up children to live in a similar way you are to be penalised?

John Lanchester has written a very good book about the economy, saying that the problem in this country is not about poverty, but inequality. That ties in with what Flickety says about averages being useless.
I teach my grandson at my house three days a week. I buy his food and books and writing materials, and pay for computer programmes to help him.. We do not get the equivalent that a school would receive for his education. In fact, we get nothing.

Yes, I agree, Aka. I reckon I spend around a couple of thousand a year on school clothes, shoes and incidentals for my GC - I honestly don't know how DD would manage without our help.

Reduced expenditure for ourselves, yes.
But having just paid out for school shoes, tennis and drama clubs I'm finding I'll have to watch the pennies this month.
There are many grandparents who give financial support like this and it all adds up. I estimate a couple of thousand a year, at least. This was not something my parents did for our children.

Exactly, reduced expenditure. Not running a car makes a big difference.

Our uncommitted income increased no end when our DS left home for economically independent life. It had already improved when they came back home after university (two lots of exorbitant rent on top of our own mortgage and living expenses for three households). Going out to work costs money as well; clothes, travel costs, possibly two cars, less efficient and more expensive shopping, more meals and drinks out. Paying people to do things you don't have time to do, more entertaining. We both had expensive employment-related pension schemes which now give us an income. So, yes, we aren't on the breadline. Reduced expenditure rather than increased income.

It annoys me when reports refer to "well off pensioners" without defining what a well off pensioner is! My late DH and I left school at 16 and worked long hours to build up savings, those savings are now invested and, together with my state pension and small private pension, my income is less than £12,000 p.a, I can't spend any of the savings as if I did my income would drop, yet no doubt I would be classed as one of the better off pensioners. I know there are others whose income is much less.

I don't think politicians necessarily pander to the "grey" vote, I think they are aware that people are living longer and provision must be made for them. How they do that whilst also taking care of the younger generation makes for difficult decisions

I've been thinking about the term 'working hard' and I've come to the conclusion I didn't. I only worked.

At the age of 16 I left school and went to work in a Bank. The hours were 9 am to 5.30 p m with two half hour breaks (morning and afternoon) and an hour for lunch.

I see young people now working much longer hours and often for minimum wage, zero hours contract. They also 'pay in' and struggle to meet council tax bills and private rents.

Gracesnan I agree with what you say. Single women are not usually nearly as well off as couples where often most of the income comes from a husband's pension.

I also agree that we relatively wealthy parents/grandparents subsidise our children and grandchildren as our parents never did us but I don't think the report takes that into account.

Excellent posts above. When I read the initial question I was totally bemused and hood the Flickety would make some sort of sense of it. Thank you!

As GG has pointed out 'maintaining a standard of living' doesn't define what that standard is. For our generation it's probably, for the nost part, quite a frugal one.

As for other points in the summary above the fact that children are not requiring support is a nonsense. Many do, and for a large number, children has been replaced by grandchildren as their patents struggle with impossible housing costs.

As for not saving to provide a retirement income, many of us save against a possible day when we are too frail or ill to cope and need expensive assistance.

What an ill informed and arrogant report.

As for the next question. I think that's a very cynical view of politicians. Whilst some are self serving, I do think that most look at the bigger picture and although their visions of what this nation should look like differs greatly, I really don't think the young are ignored as they are unlikely to vote.

I know one example isn't representative but our PPC has been on a mission to register as many voters as possible - all the tricky ones - the multiple occupancy, the transient students, the ones in hostels and so on.

It does seem sometimes that the worst and most cynical view of everyone's actions is the default position.

FlicketyB I am glad that it is not only me who could not understand the above text. I had thought that I was reasonably intelligent but it was beyond me, making little sense.

I was in a profession which was poorly paid but had a final salary scheme at the end- not that that bothered me at the age of 18! The goal posts kept moving, 2/3 of my salary then changed to 40/80ths in pension terms.

I worked hard all of my life, if I could not afford it I did not buy it. Getting on the housing ladder in the 1970's in London when I was first married was a nightmare.

I have saved all of my life as I was brought up to do but this seems to be coming back to smack me in the face. I could have used money to change my wardrobe annually or go on round the world trips twice a year until there was not a penny. I have to think about the possibility of paying for care home fees now.

It is expensive living in London on one's own and maintaining a house to an acceptable level. I am aware I do not need 3 bedrooms, should give it up and live in a bedsit!

On reflection, all I have paid in over the years I now receive in pension income and if I live to be over 75 I might go into profit. However, I also pay out proportionally much more in supporting children and grandchildren than my parents did, and I provide a lot of free childcare. I won't have the savings my parents had when I die. Certainly not even a slightly rich baby boomer, but I was paying out such large amounts towards my pension before retiring (consequence of divorce) that I got used to living on the income I receive now.

Yes, I and all my friends vote and we discuss politics a lot. MPs do right to accommodate the views of retired, older people - there are more than enough of us to swing the results of elections now.

About time! Politicians are mainly:-

a) young to middle-aged
b) pretty well educated (some expensively so)
c) opinionated confident and self-assured
d) well paid and masters of the expense sheet

People reaching state pension age are mainly:-

a) older (and possibly less healthy)
b) of various levels of educaion (mostly state schools)
c) brought up to be polite and not to push themselves forward
d) many on limited budgets and not a chance of getting expenses too

Sorry - only just seen your second question.

I am really glad if "the vast majority of couples born in the 1940s have levels of wealth that are more than sufficient to maintain their standards of living into and through retirement.", but that is certainly not my experience.

Women born in the 1940s were not brought up in an equal society and many started off with very unequal pay. It was still common for them to be expected not only to stop work when they were pregnant but not to return for much longer than women do now. Returning to work could mean part-time for many as society still saw the care of the family and the home as the most important part of their role.

Obviously things were changing for these women who would start in the workplace in the 1950s, 60s but we should remember that there were still a few places where marriage could mean you had to leave your job right into the first few years of the 1970s.

It is interesting that the article sites couples. For many women born at this time marrying the "right" man who had and kept the "right" job was their road to security; it was not in their own hands. For those to whom "life happens" events turned this upside down many have ended up just getting by. I think you would find a large cohort of poor pensioners, mainly comprising women.

I confess to feeling bored and/or irritated by the constant criticisms of "wealthy" baby boomers. I accept we've been a lucky generation, without the privations our grandparents and parents experienced, we benefitted from the NHS, and didn't leave school at 11 or 13 to go down the pit, or up to the mill.

Most of us were at work by 16, or immediately on leaving school/university and have worked and contributed throughout our lives. Many of us are still doing exactly that, volunteering, caring for relatives/grandchildren and working part time to bring in a bit more cash.

This forum reflects the way in which many of us continue to support (adult) children financially, either by providing cheap/free accommodation, or helping out with deposits, food bills, clothes for grandchildren, the lists are endless. Polarising generations - grump.

Maybe they should be asking how we got so 'rich'.
By working hard, saving when we could, investing carefully (not so easy these days) and not running around buying everything we fancy on credit!

" For every well off pensioner there is one struggling in poverty" Not just one - averages are tricky things to understand and don't put across the reality. It only takes a few high earners to skeww the figures.

For instance - If you have four people each receiving £10,000 a year and one receiving £35,000, you can say, quite accurately and truthfully, that they get an average of £15,000. The four on £10K would love to be getting that 50% rise!

FlicketyB Tue 09-Sep-14 07:57:31

Good post and spot on.

Well I'm not wading through all of that and if I did I'd only be blinded with science.

However, from personal and anecdotal evidence I would say it is true that many 'boomers' are as well off as the report says they are and following generations are struggling and will struggle more.

That is why so many of us are subsidising our children and grandchildren now.

Well, I am an economist and I struggled to understand all the text above. There are no definitions of precisely what many of the terms and phrases in this text mean - and they do have very precise meanings.

Please can someone turn this gobbled gook in easily understandable accessible text.

My only comment so far is that averages are the spawn of the devil unless you have an enormous amount of information about the distribution. For every well off pensioner there is one struggling in poverty and by writing this piece entirely in averages it carefully avoids the problems of the many in poverty.

The Institute of Fiscal Studies (IFS) claims to be unbiased but this claim has been challenged by a number of people. It has been accused of being right wing and biased toward protecting capital and finance.

oh dear - such studies will only exacerbate the 'rich boomers stole our future' debate.
I struggled through a lot of the 52 pages of the report and it seems to me it is a bit unrepresentative
they only talk about 'couples' or assume that the sample have all been part of a couple since the age of 20
the sample size is the same 1600 couples from a study 10 years ago
they 'annuitize' the value of housing which is not actually income per se (it is where we live).