Redistributing wealth between the generations

It strikes me that possibly those older people who think they had it easy, probably DID have it easy. I had a friend who was provided with a three bedroom detached house upon her marriage, her new husband’s father owned a building company, and the newly married couple only needed to pay the cost price of the house which was far less than the sale price. The father had also given his son a car, and the son also had a firm’s car provided by his employer. This friend certainly did have it easy.
However, that was not the story for me, and I suspect not for many other Gransnetters. Judging by the posts on this thread, most Gransnetters certainly had it anything but easy, and I count myself among them. Life was not easy, we didn’t enjoy the luxury of foreign holidays (or any holidays in most cases) and we didn’t run cars, expensive or otherwise, we never, ever bought expensive take away coffeee (it didn’t exist as far as I know) and we didn’t furnish our first homes (usually rented) with expensive new furniture, including every expensive gadget known to man (think expensive coffee makers or juicers) and we didn’t buy expensive mobile phones and upgrade them every couple of years, in fact many of us had no phone at all. However we certainly did pay enormous interest rates on our mortgages when we eventually managed to scrape a deposit together to buy our first, small houses.
Incidentally, the wealth acquired by house prices rising is only going to benefit our children when we die, unless of course we need care, in which case it will disappear into the clutches of the local authorities. Wealth locked inside a property is not particularly useful to the occupants, as actually they need said property to live in.

While I have no patience with those who say they can't save - while having expensive holidays/cars and eating out a lot, etc. , I do think there are many for whom buying a house is that much harder now, no matter how careful they may be.

The house Dh and I bought when we were still only in our late 20s would be proportionately WAY more expensive compared to incomes now. There is no way we could have afforded it then if prices had been at current levels - and although it's a nice house it's nothing very special.

My dds and son in law are all hardworking and not at all extravagant, and from all I've seen, most of their friends are the same.
We have willingly helped them to buy homes a little bit bigger/nicer than they could have afforded on their own - though I might add that dd and SiL refused all help when buying their first house - and I am well aware that we are very fortunate to have been able to do so.
I would do the same again in a heartbeat. They have all been very grateful - they did not in any way demand it or expect it as of right, though I know that's not always the case.

I think many of the current problems arise from trying to manage expectations in the the wake of the selling off of council houses, which has completely distorted the housing market.

Over 4.5 million council houses have been sold off since the policy started in 1980. That is 4.5 million houses sold at massive discounts of up to 75% to people who would not otherwise have been able to afford to own a house. Because their parents are owner occupiers the children of these purchasers also aspire to home ownership on similar wages but they need to be able to afford the full market price and that is just not possible.

In the days before council houses were sold off around a third of the population lived in publicly provided housing at affordable rents and with secure long term to life long tenancies. I doubt this % has changed - except that there is no longer public sector housing to provide them with the secure long term tenancies at an affordable rent that their parents were able to start life in.

How can we remedy this? I do not know. Stopping the scheme would be a start. Younger people lucky enough to get a public sector home can get discounts of up to £100,000 off the value of their home when they buy it. Perhaps the government could extend that £100,000 bonus to all first time buyers or cancel the right to buy scheme completely, so houses built in the public sector stay there.

Gave 2 Sons/DILs deposit for their houses. Will do the same for DD. We enjoy seeing them and the DGC happy in their own homes. We are also in the process of handing over our business to them, on the understanding that we still get our salaries. They are extremely grateful and know they are very fortunate. DD and GS live with us since she has got rid of the idiot, we are happy to give her the support she needs at this time. I am pleased that I can give them a hand, and enjoy seeing them happy, it will all be theirs when we are gone anyway.

Was discussing this same thing with friends last night. We have helped our son get on housing ladder because fortunately we can afford to, and we have only one child. But I agree with others, when we were saving for a house, we barely went out and didn't have holidays. But the youth of today, even when saving for house deposit, seem to still go out eating and drinking and still have holidays. The same with a lot of young married couples with children. We hear all the time how difficult finances are for them, but most of the young families I know (who are in average paid jobs) have their annual holidays and a decent social life. I don't begrudge them. They are only young once. But it tests my sympathy a little.

You are all basing this on southern prices,the flat we bought for 14k in 1982 is now valued at 70k ,so still easily affordable on average wage or less,in the time since we had it its had several new bathrooms and kitchens and an attic conversion giving two extra rooms,its also been re double glazed at least 3 times .Its had more money spent on it than its now worth.Of course the mortgage rate is much lower now than the 16% it was then too.Its almost next door to our business so I see all thats happening to it and am friends with the current owner so my info is accurate

I wonder how many who have commented on this thread have actually read the article I posted a link to.
Tim Harford isn’t suggesting that old people should have their wealth redistributed to the young. He merely uses David Willett’s quote as a starting point to muse about how it is all really more complicated than that, and to make some possibly tongue-in-cheek observations.
The title of his article is actually ‘A monetary remedy for the midlife crisis’ and he argues that the generation which would benefit most from financial support is not the young or old, who report being happy with their lot, but the middle-aged (the generation to which he belongs) presumably struggling with their mortgages, supporting their growing families and making provision for their own retirement.

Children of 30 years of age need to look at their present situation in comparison with their parents' lifestyle when they themselves were in their 30s, not as they live now in their 60s or 70s. Also, the ridiculous rise in house prices has been caused by this country having too high a population chasing too few properties and people being willing to pay those prices and not by the older generation having the audacity to own their own home.

Like many on this site, I'm sure, my parents were working class and in council property and had nothing to give or loan me. There were no expectations of any sort of inheritance and it was always understood that it was mine and my husband's responsibility if we didn't want to end up in the same situation.

As has been said here people lead very different lives but if you watch any TV programmes whether British or American people are living these social lives meeting others in the pub or restaurant. You see single women in fairly normal jobs - still young- living in homes fit for a film star - big rooms, kitchens to die for and expensive decorative pieces. No wonder youngsters think that they are entitled to all this and straight away.
They now expect to have these lives and go on all sorts of exotic holidays.

I can't help feeling that the way children are brought up these days, given everything, spoiled rotten, does not put them in good stead for later life when the bank of parents is no longer available. They know no other than ask and they will be given. It's just the tip of the ice burg, it will get a lot worse if parents don't realise that giving children everything they want will cause the child severe suffering when faced with the real world. We are breeding a lot of selfish, narcisstic adults who are used to being pampered and spoiled as a way of life. Goodness knows what we can expect future generations to turn out like. Watch this space, umm.

Why should I be made to feel guilty I own what was termed by the estate agents prior to purchase as 'enviable property in an enviable location'?Why do I need to justify how and why I have such a property.?I/we had to start somewhere.Apart from our honeymoon our first holiday was not until we had been married six years, and with two small children was taken on a lot to be desired caravan site in an even more lot to be desired caravan that we had to get to by rail or bus as owning our own car was out of the question.
We started, when able to put down a deposit, with a two bed bungalow. I was not able to be a stay at home mum
if we wanted to buy our own property so took jobs that would revolve around my children .As DH walked in from work I walked out and on many occasions did not get home until well past midnight if my shift required. I was lucky to be given a lift home if some one was going in my direction. DH had to cycle to work until he was able to buy a motor bike.
Rome wasn't built in a day and I resent the attitude and remarks I am now expected to take being 'oh its all right for you, look what you have ' Well do what I/we did. It can be hard and DH and self did not get what I now have sitting on our ar* and nights out with the girls/lads , continental holidays ? things which many now, and do feel, bereft without.Not always is it about choice but if given that option then its knowing where your priorities lie.

If your kids are bad with money then maybe you should look at how you brought them up!

All of mine were brought up the same, trotting off down to the BS to put in their savings, some birthday money etc, saving up for what they wanted.
Nowadays, one is very careful with money, another is reasonably careful and the other one is hopeless!

Friend and I were in Leeds one Friday afternoon and had great difficulty finding somewhere to eat at 5 pm as everywhere was booked. Finally ate in Wagamama (love it) and on coming out every restaurant and bar was teeming with youngsters, who in 'our' day maybe would have had a half and gone home not be settled in for the evening. Its no wonder they can't save for a deposit, luxuries seem to come first. Having said that, all three of our DCs have good jobs, houses and families and thankfully don't have to borrow from us and they live too far away for babysitting services too!

My children are all indepedent. I have occasionally lent money on the understanding that is is paid back. I still work full time and still save so that one day I will be able to retire (I am 67). I cannot believe what some older people put up with from adult children who really are taking advantage. How will they ever become independent...those apron strings have to be cut.....

There is another aspect to this an that is how some think the elderly have no right to keep their good fortune to pass on to their children. There are many fraudulent scams happening to try and often succeed in getting monies out of bank accounts without permission. Single pensioners are very vulnerable. I have been targeted twice, the first time by a distant relative who "pretended" to be a carer to a social worker and solicitor ( this person lives 500 miles away) to try and sign in my place to get money. The police stopped her. The second was when I asked an old age charity to help me find a qualified tradesman to do some work on my home making clear exactly what I wanted. All along they let me know they put my requirements first, they were respecting my wishes and they were doing checks and comparisons so I would not be "ripped off". There were months before a contract was drawn up, they had found the "best roofer in the city" and he was worth the "bit extra" for the quality of work and peace of mind. A weeks' work was done in one day, in a gale leaving a terrible mess not just on my premises but in my drive and road. He damaged an adjacent roof which leaks into the building, his worksmanship was terrible. I expected the charity to sort things out, their tradesman has actually damaged my home. Instead I was told "pay up or we take you to Court"!. When I invited experts to see the damage they all told me I was being charged THREE times the going rate! This old age charity was using "handy men" in place of experts but charging the most they could get away with! The Banks and Abuse Charities are doing their best to try and prevent these scams . There is so much greed out there and a belief that if an opportunity arises it is fine to take money from the elderly. I have children who live a distance away and they never ask for anything. But these instances have completely shocked us all and I look forward to the time it becomes a real crime.

A couple of points about this:

For a start, the increase in house prices doesn't bring a corresponding increase in wealth to those living in the houses. If a couple bought their house in 1970 for £5000, and it's now worth £355,000, this extra 300K is not accessible wealth. They bought a house, and they still own the same asset - a house. The only way they can realise the asset and benefit from the increase in property values would be by selling up and making themselves homeless.

The other thing is that these much-envied houses that many of us have bought and worked for over a lifetime will not vanish into thin air when we die. In a few cases, they will have to be sold to pay for care, but in most families, the house will be passed on to the next generation, so they'll inherit this as an unearned asset.

In many families, this process is already under way. The boom in home ownership in the middle of the last century means that houses are already being passed down as inheritance, as the generation born earlier in the century die off. The beneficiaries may well be people of the Gransnet/baby-boomer generation, but again, this wealth isn't lost, much of it will filter down to our children and grandchildren both during our lifetimes and after we die.

So the younger generations should be grateful, rather than envious, if they have richer parents and grandparents than we did, as they will get a share of this wealth.

Of course, all the above applies only to those who own property. Families who have only ever rented their homes are further than ever from being able to buy a house. The big gap is not between the generations, but between the socio-economic groups who own property and those who do not.

I think there's scope for a new life swap reality show here. Forcing the younger generation to forego their social lives for half a lager and lime and a game of bingo at t'club with their mums and dads. Swap their Ubers for t'corporation bus (which I've heard some of them call the peasant wagon). Live in a shoebox in the middle of the road....

There'll be tears before bedtime.

Day 6 I agree with you I'm 58 working in childcare 30 hrs partime? I love to hear on a Monday morning the young parents who have had it hard at the weekend. Out drinking out with friends and left the children with Gran parents that have been working all week too. Often the mums have been on hen dos abroad husbands taking care of the children. It's a new world new times. However I loved having my children and being a stay home mum for a while. My youngest son is on his own and I fill his cupboards once a month feed him twice a week and it doesn't bother me at all. Just hope some nice girl eventually comes along for him. I look after my grandchildren Saturday nights but not every week as my husband and myself need time together as he works long hours at 61 can't see it changing.

Anyone else think this thread is turning into a Monty Python sketch?

It was utterly predictable, Hm999. It happens every time...

The article’s light-hearted, but its premise is that it’s the middle-aged who are most squeezed. I agree, and feel for them. Though our income’s much lower now, so are our outgoings, even though we have a good life. Those days of helping out our children by swapping debt from one interest free credit card to the next (we had all our three at Uni for one memorable year, so three rents on top of our mortgage, and fees for three) are long gone and we can relax. As for the generational divide, yes, far too many are struggling to get on the housing ladder, for all sorts of reasons. But not all. Two of our AC have bigger and better houses than the one they grew up in. The other has one much like ours, but she’s on her own, with just the one salary. They have much better social lives than we had at their age, and I’m pleased they have. But those middle years will be looming soon....

I too loathe these generalisations. Actually, I do remember some of the figures.
My parents were given their first house, which cost £1000 in 1956, when my dad's wage was £500pa. They were given it from a lucky win at the races. So of course they were 'lucky' - the horse might have fallen!
Our first house, bought in 1973 cost £7,500, which was the salary of 2 senior nurses. The mortgage + life insurance at that point cost us one wage.
House price inflation has done the rest.
We have saved to give our children a start on the housing ladder, where they are buying houses costing 10x a salary.
They are grateful, and on the whole don't waste money. We have certainly tried to enable them, in various creative ways, to maximise the time time they spend with their young children.

There is a nasty, vicious tone emerging from one side of the political spectrum based on resentment and entitlement and this seems to have infected many young people. I have even detected it in my DD at times though she had a top education, was helped to a house deposit by her DF and I and has been treated well and generously.

I think the Resolution Foundation is much to blame for trying to split the generations. It is clearly an attempt to asset-tax away the wealth of the old to be spent or misspent by government.

I have told my DC that their best interest is in leaving things as they are because they have the prospect of a decent inheritance unincumbered from us, their parents, whereas, if the 'intergenerational envy' mob get hold of it there will not be a penny for them.

Yes, the harder I worked the luckier I became

What a load of twaddle shortlegs .

Let’s face it friends we have created a generation who believes they should live for today, have a good time and get what they want when they want it

Speak for yourself maybe Kathcan1 but neither of my children have been brought up like that and (like me) haven’t ever been handed anything for nothing .

When we were first married in the mid sixties there simply weren't the things to have which perhaps made it easier! Like everyone on here we made do and mend. Our first bought home as very pretty but tiny! two up, two down. No bathroom, outside (flushing!) loo, babies bathed in the kitchen sink. Furniture from a second hand (junk?) shop, carpet, ditto. I did have a keymatic washing machine, (a gift from my parents) also a recon Hoover, a Kenwood chefette a wedding gift from my MIL and a pressure cooker, again a wedding present. We did get a full grant to have a bathroom extension! We were so chuffed and considered ourselves really well off. Holidays?! We camped!! My goodness, I can still remember the rain!! I remember this as one of the happiest period of our lives and apart from now, the most contented. High interest rates, a growing family, long working hours often away from home, had its rewards and also sadly its heartaches.