IFS: People born in in 60's and 70's to be worse off than previous generation

thescouselander

This is a bad sign. Despite all the bluster on here it looks like living standards will decline further and further as the generations go on. That pretty much means the country is in terminal decline which can't be good for anyone.

PasturesNew

michaels wrote: »

I also thought those born in the 60s and 70s got on to the housing ladder when you could buy a house and still have change for a packet of chips, I didn't realise the priced out generation(s) went back so far!

Every area's different.... I was priced out, as a single buyer, in the town where I grew up - and without the Internet and Rightmove we had no idea about other places, just about where we knew.

Now it's true that "everywhere" "everybody" is priced out, so it affects more people.... but there are many others who have been priced out for many reasons in many areas for many years.

michaels

thescouselander wrote: »

This is a bad sign. Despite all the bluster on here it looks like living standards will decline further and further as the generations go on. That pretty much means the country is in terminal decline which can't be good for anyone.

Back to my previous comment - if you work a smaller proportion of your life is it that surprising that your average annual income is lower (even if your life time income is higher). Perhaps if we could bring life expectancy back down it would do the trick?

lostinrates

michaels wrote: »

How much longer is their life expectancy - are they actually going to be worse off than the generation above or is it just that because proportionately their life expectancy has gone up faster than their total lifetime consumption? Thus on a per year basis they are slightly worse off, probably because on average the ratio of productive to unproductive years has fallen with more time spent in education and retirement.

I also thought those born in the 60s and 70s got on to the housing ladder when you could buy a house and still have change for a packet of chips, I didn't realise the priced out generation(s) went back so far!

Hang on, wait till the figures come out for the figures for the eighties and nineties birth decades come out. Its possible its a progressive decline, not a sharp one.

lostinrates

michaels wrote: »

Back to my previous comment - if you work a smaller proportion of your life is it that surprising that your average annual income is lower (even if your life time income is higher). Perhaps if we could bring life expectancy back down it would do the trick?

That's happening in many cases through lifestyle.

Daniel54

Graham_Devon wrote: »

I.e. worse off than the babyboomer generation.

There have been plenty of arguments over this, indeed, many with the conclusion that "of course people have more money when they have had longer to earn it".

However, the IFS have researched this, and it's likely that those in their 40's and 50's WILL be worse off than those in their 60's for the first time since WW2.

That is, unless they benefit from inheritance.

The IFS found (to combat arguments by some of the boomers on here) that incomes are NO higher today than the generation before them.

Pensions will be worse.

High house prices mean those in their 40's and 50's will find it harder and more costly to achieve the same thing, hence lower home ownership.

http://www.bbc.co.uk/news/uk-25411181

Not boomer bashing, simply laying out the findings of the IFS.

Secondly, I do believe all this "pitting generations against each other" is an excellent distraction from those who played a part in creating this issue.

The report also said they needed to research further why the post boomer generation ( in real terms) earned more but saved less in the earlier years of their working life

grizzly1911

thescouselander wrote: »

This is a bad sign. Despite all the bluster on here it looks like living standards will decline further and further as the generations go on. That pretty much means the country is in terminal decline which can't be good for anyone.

It has been in terminals decline since the 70s if not before. Why have we been forced to waste the oil revenues, sell the family silver and erode most of the hard won benefits post WW2. We lost the plot when we lost the empire.

Putting our faith in the city alone probably wasn't the smartest of moves.

lostinrates

Daniel54 wrote: »

The report also said they needed to research further why the post boomer generation ( in real terms) earned more but saved less in the earlier years of their working life

I think there are loadsa reasons, both legitimately practical and frivolous. Both my fil and father have said they had more fun with their money than DH gets to have with his. Dh's salary is comparatively bigger, but fil's cushion of support was comfortable so the comparisons aren't quite like for like. DH earn't a lot more than my da though at each stage of career so far!

Loughton_Monkey

Graham_Devon wrote: »

I.e. worse off than the babyboomer generation.

There have been plenty of arguments over this, indeed, many with the conclusion that "of course people have more money when they have had longer to earn it".

However, the IFS have researched this, and it's likely that those in their 40's and 50's WILL be worse off than those in their 60's for the first time since WW2.

That is, unless they benefit from inheritance.

The IFS found (to combat arguments by some of the boomers on here) that incomes are NO higher today than the generation before them.

Pensions will be worse.

High house prices mean those in their 40's and 50's will find it harder and more costly to achieve the same thing, hence lower home ownership.

http://www.bbc.co.uk/news/uk-25411181

Not boomer bashing, simply laying out the findings of the IFS.

Secondly, I do believe all this "pitting generations against each other" is an excellent distraction from those who played a part in creating this issue.

This takes the biscuit! Even for you Graham.

You have clearly not read the report itself. If you simply do that, you'll get the truth. I think you have only read the Nanny State BBC headline. "People born in 1960s and 1970s 'poorer' than previous generation"

The 'poorer' being in inverted commas.

How many times do you need to be told about financial journalists distorting the truth. Spinning the story. Putting a sensationalist headline....?

The report is basically about 4 decades of birth. In round figures, the 1940's (Me) and 1950's - who are the 'boomers', and then the 1960's and the 1970's - who are the Generation X 'whimps' like rugged who continually whinge about boomers.

Read the report! READ THE SUMMARY! The report is here:

http://www.ifs.org.uk/comms/r89.pdf

For much of their earlier adulthood, the 1960s and 1970s cohorts did have higher take-home incomes than prior cohorts had at the same age. For example, age-30 real median income was 20% higher for the 1970s cohort than for the 1960s cohort, 52% higher than for the 1950s cohort and 77% higher than for the 1940s cohort.

Right!

So Gen X started working life taking home between 52% and 77% higher incomes than boomers [depending upon exact year of birth]. We're not talking of a few percent here. We're talking of mammoth increases in standard of living.

Let's move on....

These income differences between birth cohorts at younger ages were (at least) matched by differences in spending. As a result, the 1960s and 1970s cohorts had higher living standards during early adulthood than their predecessors had, but they have not actively saved more take-home income than their predecessors had by the same stage in life.

Now please forgive my vernacular, but when you read the report in depth, this is purely a polite way of saying the obvious.....

• Gen X had grossly higher incomes.....
• They blew it.
• They saved virtually nothing.
• It went into the closet of greed and 'want it now'...
• ..and down the toilet pan of gluttony and spend, spend, spend!

Their theme song was Eddie Rabbit's "The Squanderer".

And then we get....

There has been a lack of household income growth for the working-age population over the past decade. As a result, the 1960s and 1970s cohorts have not been experiencing the rapid rise in income between the ages of 30 and 50 that their predecessors did; and younger cohorts do not have higher income than those born 10 years earlier had at the same age. This is true through most of the income distribution.

To any normal person this is saying that now these greedy, never-mind-the-pension, wasters are now throwing their toys out of the pram because the 52% and 77% rises in real income are not there any more! That massive increase over equivalent aged boomer generations is not increasing any more!

Poor things! Late Gen X only increasing income as much as the early Gen X. Early Gen X only increasing income as much as boomer as they get olders. Shame. National disgrace.

The only reason Gen X is "poorer" is because they spend the damned lot and don't save! Which is what many of us have been saying for years. And then the report goes on to say that Gen X will, however, have salvation in inheritances beyond the wildest dreams of boomers.

So let's summarise the truth, shall we?

• Gen X [60's and 70's birth] had roughly a half to three quarters extra income than Boomers [40's and 50's birth].
• Since the recession, that massive increase is no longer accelerating.
• Despite this, they spent the lot, rather than save anything like as much as the boomers...
• the obvious consequence being that they didn't save anything and are likely to be poorer in retirement than the boomers. [pretty obvious, really].
• Their only hope is the parents croaking it and leaving their hard-earned to their Gen X Children to make up for the huge pile of cash they have thrown completely down the toilet!

I was going to start a thread on this myself early afternoon, thinking that the likes of you and toastie would be so embarassed to have read it, and hoping no-one would post it. I had other things to do [like a bit of work and then sink a couple of large gin & tonics.] I never dreamt you would post this. Not if you had actually read it. It goes against your grain.

HAMISH_MCTAVISH

Graham_Devon wrote: »

However, the IFS have researched this, and it's likely that those in their 40's and 50's WILL be worse off than those in their 60's for the first time since WW2.

That is, unless they benefit from inheritance..

Now, here's what the article says about that......

they are more likely to inherit wealth, with about 70% of those born in the late 1970s expecting to receive an inheritance, compared with 28% of those born in the early 1940s, the IFS said.

:rotfl:

Mr Muddle strikes again!!!

So basically, most will be better off.

And as for incomes....

While those born in the '60s and '70s did earn higher incomes when they were younger, they spent lavishly, and so do not have more money saved than the generation before them.

So they've earned more as well.

Crikey Graham, talk about an own goal.....:rotfl: