pensions freedom will solve the UK’s housing ‘shortage’

purch

Loughton_Monkey wrote: »

Then consider the implications.....

The Moonshine you have substituted for Gin is a tad stronger than you are used to. :eek:

redux

purch wrote: »

It may come as a shock to you, but 5 years ago the Conservatives did not win the election and have a comfortable working majority.

Therefore as 1. didn't happen points 2 and 3 couldn't possibly

You seem to have omitted to read my fourth sentence.

purch

No I read it.

It isn't relevant.

Loughton_Monkey

purch wrote: »

The Moonshine you have substituted for Gin is a tad stronger than you are used to. :eek:

The LM household is not that hard up as to susbstitute moonshine for good honest Gordon's. It seems that a most unlikely scenario that I painted (whilst totally sober) has been misinterpreted, misunderstood, and taken as literal by many. I keep reminding myself to avoid irony but always forget. At my age, the memory fades. Maybe Mrs LM is putting something into my espressos.

For good measure, I'll expostulate another scenario to cheer some of the doom-mongers up.

1. Labour get elected with a resounding overall majority.
2. The combination of a 60% higher rate income tax, a property tax for houses >£1m, and the abolition of pension tax relief ensure zero deficit in 12 months, and zero debt within 3 years.
3. New council house building hits 350,000 a year, marginally beating the private house building of only 300,000 a year.
4. Minimum wage of £15 an hour becomes redundant as all employers are now paying national living wage of £18 an hour.
5. Higher prosperity allows banks to offer 6Xsalary mortgages, while pensioners discover their homes worth less than they paid in 1980 since new ones are now dirt cheap and 21 year old apprentices prefer 6 bedroom houses so their mates can stay over after a good night's 'thrash'.
6. Net immigration plummets to -500,000 per year as boomers have been forced to sell their houses for a song, cash in their pensions to pay the gas bill, and emigrate to Romania where they can get a cup of tea for less than 40 pence.

The Queen dies, but there are celebrations in Trafalgar Square as the fourth plinth is dedicated to a statue of Sir Ed Balls instead of her late majesty.......

[and I haven't had my first one today, yet!]

BobQ

Generali wrote: »

My feeling is that when the pensions system is shown to be bankrupt (state pensions are a state sponsored Ponzi scheme in a very literal way), that is when Granny is going to be forced to sell her house.

You can't expect to work for 30 years and then spend 30 years with your feet up on an index-linked pension of well over half your salary from an unfunded pension scheme.

Why do Governments not convert the public schemes to funded schemes? Too expensive for the existing pensioners and those accruing them, but quite possible for future accruals.

That said public sector pensions are now funded to a degree by larger employee contributions. Not enough you say! Still too much employer contribution, you say.

The bizarre thing is that this "unfunded" mechanism suits public sector organisations in the long term. The generous pensions mean they can pay lower salaries to get the quality of staff they require. In austere times they are seen as unaffordable but when talent is in demand they can offer lower salaries.

BobQ

Loughton_Monkey wrote: »

The LM household is not that hard up as to susbstitute moonshine for good honest Gordon's. It seems that a most unlikely scenario that I painted (whilst totally sober) has been misinterpreted, misunderstood, and taken as literal by many. I keep reminding myself to avoid irony but always forget. At my age, the memory fades. Maybe Mrs LM is putting something into my espressos.

For good measure, I'll expostulate another scenario to cheer some of the doom-mongers up.

1. Labour get elected with a resounding overall majority.
2. The combination of a 60% higher rate income tax, a property tax for houses >£1m, and the abolition of pension tax relief ensure zero deficit in 12 months, and zero debt within 3 years.
3. New council house building hits 350,000 a year, marginally beating the private house building of only 300,000 a year.
4. Minimum wage of £15 an hour becomes redundant as all employers are now paying national living wage of £18 an hour.
5. Higher prosperity allows banks to offer 6Xsalary mortgages, while pensioners discover their homes worth less than they paid in 1980 since new ones are now dirt cheap and 21 year old apprentices prefer 6 bedroom houses so their mates can stay over after a good night's 'thrash'.
6. Net immigration plummets to -500,000 per year as boomers have been forced to sell their houses for a song, cash in their pensions to pay the gas bill, and emigrate to Romania where they can get a cup of tea for less than 40 pence.

The Queen dies, but there are celebrations in Trafalgar Square as the fourth plinth is dedicated to a statue of Sir Ed Balls instead of her late majesty.......

[and I haven't had my first one today, yet!]

:rotfl:

I do hope this comes true, then you could upgrade to Tanquerry in your new Romanian mansion (in anticipation of their adoption of a new Mansion Tax for ex-pats)

Loughton_Monkey

BobQ wrote: »

Why do Governments not convert the public schemes to funded schemes? Too expensive for the existing pensioners and those accruing them, but quite possible for future accruals...

Funnily enough, this is far from impossible. It would preferably start when we have no debt, and hence the cost of borrowing can be ignored.

Then you 'hypothecate' a fixed amount every year to pay for the future pension of the 18 year olds. The following year, a little bit more for the new 18 year olds plus the usual amount for the (now) 19 year olds.

In another 50 years, voila! We have a perfectly funded scheme.

The trouble is, tell me a government that is going to introduce an initiative that will take 50 years to come to fruition. These muppets take a year to settle in, 3 years to "do something", and then another 1 year to boast about what they did and construct empty promises for the next 5 years.

There are probably initiatives that would "fix" the NHS reasonably well within 10 years. But politicians cannot work to a 10 year horizon. Let alone 50 years.

Dream on.......

Loughton_Monkey

BobQ wrote: »

:rotfl:

I do hope this comes true, then you could upgrade to Tanquerry in your new Romanian mansion (in anticipation of their adoption of a new Mansion Tax for ex-pats)

A nice thought. But my bar does have oodles of Tanqueray (same maker as Gordons) and Bombay Sapphire (even more expensive). But there they tend to stay since I prefer Gordons.

Best to get it in Italy or Spain. Virtually half the cost and 40° proof.

ps: You needn't worry about my Romanian mansion tax. I'll take the tent. I'll live like a gypsy for a few years until it wears out. Then come back to UK penniless and scrounge benefits and a house off Miliband.

Failing that I will be found in a cardboard box under Waterloo underpass. I will wear a placard round my neck saying "Loughton Monkey", in the sure-fire hope that you, and all the MSE posters, will throw me a few shillings. I would go to a less expensive place, like Devon, but I am convinced someone there would set fire to me.

setmefree2

BobQ wrote: »

Unfortunately it is so easy to reduce this to a financial decision as if that is all that matters to the people concerned of which I confess to be not far off becoming one.

Incentives for me to sell up largely come down to what makes my life easier. I still work, it takes time to sell and buy. I am not as fit as I used to be, it takes a lot of effort to arrange. Downsizing causes me to have to devote time to deciding what to get rid of, time I do not have. I have become used to having space available, the extra cost of having it is easily affordable, how would I adjust to not having it. Maintenance is manageable so why sell up to save a relatively small sum. I have plenty of room to park, why move to somewhere small where I may not. I can invite people to stay, I have the space.

When I retire I will be more likely to downsize, but cost is not my main consideration.

Would anyone on here consider selling their home so that their kids could have a large proportion of the released equity?

By the way, I'm Gen X - if it makes any difference

Loughton_Monkey

setmefree2 wrote: »

Would anyone on here consider selling their home so that their kids could have a large proportion of the released equity?

By the way, I'm Gen X - if it makes any difference

No way Jose!

I have no kids so I can speak dispassionately.

I would want any kid(s) of mine to grow up with a sense of their own responsibility and learn financial management directly through experience.

People I know do this starting from a very young age when they make their kids save up their pocket money, and give a 'matching offer' as an incentive.

By all means I would be more than prepared to lend them cash if it was within their means to pay, and there were good reasons behind it all...

Other than that, I would do (as now) and make a brave attempt to spend all my money before popping clogs [e.g. we will downsize at some point] and by all means they can inherit what I didn't get around to spending.

An alternative question for (say) a 50 year old would be "would you consider re-mortgaging your house to raise £50,000 to pay for 'the best' home care for your parents?"