Baby boomers struggle to pay off debts

PaulW1965

I'm barely a BB but my elder siblings are. I don't think any of they or their OHs have any cash savings worth talking about. They do have investment peoperties - Dubai and Florida. One doesn't even have a pension (the one with the apartment in Dubai. That is his pension:D). Some of them are nearing 60 but I don't think any of them will be able to retire before 70!

Nearly everyone around me has lived life to the max. Maxed out mortgages, maxed out car loans.... they have bought fast cars, boats, expensive holidays, etc. They haven't cleared their mortgages, they haven't got any savings and their pensions are probably worthless.

How's it going to end?

IveSeenTheLight

lostinrates wrote: »

My parents, who have experienced much more severe austerity in the past, and their friends, seem to find it much harder to cut back on stuff than many of their chiledren. Trying to rein in my mother yesterday at the sales, for example, was shocking.

My MIL is a similar example.
She didn't have much as a child and now seems to fritter it easily away.
Don't get me wrong, they have done extremely well and it's their money (not mew'd) so their entitled to do what they want with it.
I've even come round to the understanding that people may consider selling and renting back their property so they can spend in their lifetime.
It's their money, they can do what they want with it.
I only wished that they were a little more sensible and spent it more wisely.

RenovationMan

Braveheart100 wrote: »

I despair! How did that generation get so spoilt? Where does this sense of entitlement come from?

Do you really believe that following generations are going to be any better?

Straw poll, how many of us are really putting away adequate retirement provision?

If you use 2/3rd of your current salary as a guide, in order to maintain your current standard of living and taking into account that you should be mortgage free and have no work-related expenses such as travelling, what are your figures?

Mine are:
Current income: £60,000 pa
Proposed retirement income: £40,000 pa

Current state pension forecast: £7871.76
Current personal pension forecast: £10,600 #1
Company FS pension forecast £24,166.67 #2

Total annual income from pensions: £42,638.43

#1 - forecasted from current level of pension savings and not including additional contributions
#2 - forecasted from current pay levels, not including any future pay rises.

Before anyone gets 'holier than thou' about this subject, why not run your figures through and see what you come up with. You could be in for a shock.

lostinrates

IveSeenTheLight wrote: »

It's their money, they can do what they want with it.
I only wished that they were a little more sensible and spent it more wisely.

Yep, THAT is exactly how I feel. Its their money, they worked for it, they should enjoy it..ALL. DH and I do not expect to inherit, but tbh we don't much fancy financially supporting people who should be well off either! And in the manner they have become accustomed to, we couldn't afford to.

IveSeenTheLight

RenovationMan wrote: »

Straw poll, how many of us are really putting away adequate retirement provision?

If you use 2/3rd of your current salary as a guide

I have a company pension which pays in 15% of my annual salary.
I also rent out two properties which currently receives about 50% of my annual salary.

To be honest, 2/3rds of my currect salary would be excessive when I come to retire.
I'll have no mortgage, the kids should be off into the world and it will just be my wife and I.

I reckon, we could live on a much smaller percentage* of our current income if it was just the two of us and no mortgage payments to make.

*Depends what the energy prices are like

datostar

the_risen_christ wrote: »

It's still a second mortgage. They just had to change the name because getting into debt against your home for any reason other than the initial purchase used to be a sign of failure. The new term is a marketing stunt to avoid evoking the wisdom of previous generations who knew that debt was incredibly dangerous.

The righteous work of many to turn MEW into a dirty word will help to restore this sensible attitude.

I think you might have to go back quite a way to find previous generations who knew that debt was incredibly dangerous. I qualify as a 'boomer' born in 1946. My parents were both born in the 1920's and served in the Armed Forces during the war. They had hard times in their younger days - no NHS etc. My mother passed the 'scholarship' for Grammar School in the 30's but couldn't go because her widowed mother couldn't afford the uniform and whatnot she would have had to buy. I don't really remember much about the late 40's/early 50's when we are told times were hard, but I vividly remember the explosion of hire-purchase for cars, domestic appliances, TVs, Radiograms, Record Players etc. in the mid-50's and afterwards. It was like a mad scramble to outdo the neighbours. House purchase wasn't really an ambition for many. This is what MacMillan meant by 'never having had it so good'. HP paid for it, and that wasn't the baby boomers running into debt, it was the previous generation. Nevertheless, they learned by example and became the first 'debt generation'. Their grand-parents, however, many born in the late 19th Century, did abhor debt on the whole and never really joined in the acquisitive scramble, so perhaps it's them we need to be looking at.

RenovationMan

IveSeenTheLight wrote: »

I have a company pension which pays in 15% of my annual salary.
I also rent out two properties which currently receives about 50% of my annual salary.

To be honest, 2/3rds of my currect salary would be excessive when I come to retire.
I'll have no mortgage, the kids should be off into the world and it will just be my wife and I.

I reckon, we could live on a much smaller percentage* of our current income if it was just the two of us and no mortgage payments to make.

*Depends what the energy prices are like

Thats what everyone thinks, but the reality is somewhat different. You wont have a mortgage, national insurance, commuting expenses, but you will have everything else, with higher gas and electricity bills if you are spending more time at home. You will also need more money for recreation unless you intend just sitting in front of the TV day in and day out.

It sounds like you have everything in place though with your retirement planning.

julieq

Does anyone actually read the articles that are linked to? Another classic case of newspaper hyperbole to give an impression not supported by the facts.

From the numbers - 4% of the total number of insolvencies are baby boomers in retirement. Spun a different way, that means that baby boomers are 24 times less likely to be insolvent than the general population.

Again, from the figures, about 140,000 people entered insolvency this year. Let's take a stab at 50 million as the adult population of the UK (around 10 million children). That means that about 0.011% of the adult population are baby boomers entering insolvency. It's hardly an epidemic, is it?

Better headline would be "Small number of retired people not great at managing money", perhaps with a sub heading, "(but loads better than Generation X)."

StevieJ

IveSeenTheLight wrote: »

I only wished that they were a little more sensible and spent it more wisely.

Rather judgmental

StevieJ

julieq wrote: »

Does anyone actually read the articles that are linked to? Another classic case of newspaper hyperbole to give an impression not supported by the facts.

From the numbers - 4% of the total number of insolvencies are baby boomers in retirement. Spun a different way, that means that baby boomers are 24 times less likely to be insolvent than the general population.

"

Then again it was it was less than 3.5% of the total in the previous year, a worrying trend