The Death of Retirement

OldBeanz

One of the big changes from the 70's was that the money supply was restricted back then. You had to save with the BS for them to even consider you. I moved house after a promotion which had doubled my pay from 2 years before when taking out a mortgage and asking the BS how much larger a mortgage I could take out. I was told initially that they would at least offer me the same as before. I had a mate who managed another BS with whom I had savings and he said there was no mortgage he was allowed to offer me. I was eventually offered more money but not without a great deal of sweating. Different days.

brewerdave

Have to agree with OldBeanz re availability of mortgages in the 70s -was VERY hard work getting one that was affordable.And even when you did, you found that you had been gazumped and couldn't afford the house you had your eyes on!
HOWEVER, at the same time, I was a member of a DB scheme which was non -contributory,with retirement @ 60 -Ah ,those were the days !

saver861

RickyB2000 wrote: »

I'm not sure I agree. I think most people get there by accident, either today or yesterday

No - that would not be correct. Most people who are older and comfortable did not get to that point by accident. Some will have had some good fortune along the way - a roughly similar amount will have had bad fortune - including many losing jobs that were deemed 'secure'.

People worked, paid their pension, paid their dues, etc. I don't see how you see that as getting there by accident. We mentioned the 12% unemployment in the 80's. You don't have to go back too many decades from the 80's to find rationing was in place!!

RickyB2000 wrote: »

. Sure, some people plan and ensure they are ready to retire early. I very much doubt this is a majority of people (including old, comfortable people). For example, most people I know just pay what their employer suggests they should pay into a pension.

I'm sure there are many who have not managed their pension entitlement as well as they could have done. No question about that. However, managing your affairs to get to a comfortable position in your older years is not down just to pensions, though that would be a major factor.

Much is down to the lifestyle choice throughout your younger and working life. So its an encompassing.

It would also depend on what you would class as 'comfortable' in later years. To me, its simply being in a position to have enough income, pension, savings etc to live debt free and be able to do most normal things without financial worry. I'm not talking about two cruises a year or a new 4x4 every couple of years. More like being able to turn the heating up when required, having an occasional meal out, being able to pursue hobbies, an annual holiday etc.

RickyB2000 wrote: »

Ultimatley, it wasn't easy for either generation. It is the view that it is so much easier today if young people just saved a bit more that annoys me. It is not as simple as that, just like it was not as simple as that in the 80s.

Don't get annoyed .... ain't no benefit to that!!

However, it's not necessarily about 'saving' more but about 'managing' your individual circumstances to maximum efficiency.

Malthusian

Its all about image today .... much more so than the past .... and image is costly!

Blimey, more costly than when "image" meant walking about in clothes that required three maidservants to lace you into and cost god knows how many months' average salary?

It has always been about image if you want it to be.

[Deleted User]

All the comfortable retired people I know actively planned for it no matter what their profession by setting aside considerable funds into whatever scheme at the time.

The less well off pensioners either did not plan sufficiently or unfortunate circumstances.

What's changed?

saver861

Malthusian wrote: »

Blimey, more costly than when "image" meant walking about in clothes that required three maidservants to lace you into and cost god knows how many months' average salary?

It has always been about image if you want it to be.

That was a different era. We have well moved past Downton Abbey days where there was only the 'elite' and the 'commoners'. The rich only married the rich as a business arrangement.

uk1

OldBeanz wrote: »

One of the big changes from the 70's was that the money supply was restricted back then. You had to save with the BS for them to even consider you. I moved house after a promotion which had doubled my pay from 2 years before when taking out a mortgage and asking the BS how much larger a mortgage I could take out. I was told initially that they would at least offer me the same as before. I had a mate who managed another BS with whom I had savings and he said there was no mortgage he was allowed to offer me. I was eventually offered more money but not without a great deal of sweating. Different days.

And additionaly to that whilst the generation that were lucky enough to have property value growth due to inflation now suffer from low interest rates which in effect is a subsidy to those of this generation who are lucky enough to get mortgages.

That isn't in any way to belittle how difficult it is to get on the property ladder today, but put simply when you are starting on that ladder today you will probably enjoy the benefit of increasing property values on a higher starting point property value during a low mortgage interest rate cycle - and it is savers that are paying for it.


Jeff

RickyB2000

OK, if the point being made is that young people should manage their affairs in the same way as I am sure the good people on this forum do, then I agree with the sentiment that many don't and all would be far better off if they did.

If (as I read it) the argument is that the average young person today is so much more profligate with spending then the average young person in say the 80s and that this is the cause of them not being as well off etc, that I is a point I find hard to believe. Or if it is true it reflects a fundamental change in the economy that drives ithis behaviour, rather than being a fundamental change in the way young people choose to spend their money (as most would choose to buy a house).

uk1

I think you are misrepresenting the two points by making them into one point.

Too me it seems that the younger generation certainly do have a great need for instant gratification and think less and plan less for the longer term. However I do not believe this to be the cause of them not being as well off etc. Perhaps this means that we agree.

There are lots of reasons why they might not be as well off but this first consideration is one of many that will lead them not to be as well off in later life. If anything with such considerations as the death of DB pensions, the commoditisation of workers from people into resources, and difficult issues such as getting onto the home ownership ladder etc should be a greater spur to start planning but it is my view that the increasing instant gratification need is one of the drivers that prevents a greater number than in previous generations from sacrifice now for a better future.

Jeff

RickyB2000

uk1 wrote: »

I think you are misrepresenting the two points by making them into one point.

Too me it seems that the younger generation certainly do have a great need for instant gratification and think less and plan less for the longer term. However I do not believe this to be the cause of them not being as well off etc. Perhaps this means that we agree.

There are lots of reasons why they might not be as well off but this first consideration is one of many that will lead them not to be as well off in later life. If anything with such considerations as the death of DB pensions, the commoditisation of workers from people into resources, and difficult issues such as getting onto the home ownership ladder etc should be a greater spur to start planning but it is my view that the increasing instant gratification need is one of the drivers that prevents a greater number than in previous generations from sacrifice now for a better future.

Jeff

But do you think instant gratification is due to the ready availability of cheap goods today? Instant gratification and the purchase of the latest tech is not the preserve of the young - I know many middle aged people who do exactly the same. So isn't it because these options were not there in the past rather than a change in attitude of the young that the old don't have?

There is also the fact that having a lot of stuff doesn't mean you are spending more. Someone on average wage could buy what, 3-4 iPhones a month if they wanted. In the early eighties a VHS would cost a months average wage. I think it is hard to judge what % of income is spent on instant gratification today compared to before based just on the amount of stuff people have.

I don't know the answers to these, just posing the question. I do agree most people need to plan and plan hard - 5% into a DC pension is not going to be enough! They are sleep walking to potential poverty