Pay drop for those under 22

System

It is expensive to move out, no doubt, but it's always been reasonably expensive. There are a few observations I've made about young people and budgeting, as I work with young people from the ages of 16 to mid twenties.


1) They believe that can't afford to move out, and it's a self-fulfilling prophecy that affects nearly everything I am going to say from this point on. They believe they cannot afford it. When I first moved out (16 years ago), rent was just shy £400 a month for a two-bed place in a reasonable area, which is cheap I admit, but I live in a northern town. Same rent now is about £500...it's not risen THAT much. About the same cost as two iPhone X contracts, probably less...which brings me onto my next point.


2) I'm 37...nobody had car finance unless they had a house or had moved out. We just didn't think about doing that until we had a roof over our head. Think about that for a second...kids hit 16 and get a Fiesta ST worth 12k for £200 per month. You can afford that on a part time wage if you live with mum and dad - not an incentive to leave the family home OR could you if you have out-goings before you even move out. The very same car would be completely out of my league when I was that age. We bought cars for £1000 or less.



Having any form of out-goings before you moved out and got your own place JUST DID NOT HAPPEN even in the early 2000s.


3) Young people don't actually value their own place. Mum and dad are soft, don't really want an empty nest so there's no real push for them to fly the nest. What young people value is things and experiences - think holidays, nights out and travel. Coupled with "I can't actually afford a house anyway, what else do you spend your money on". "I'll have a new MacBook pro this month I think".



Where I live, it's just not that much different now in terms of costs than it was 10-12 years ago. Since the recession, house prices have only just recovered to where they were 12 years ago. My first house I bought on my own in 2007 - 11k deposit, 91k and I was earning around 20k. You can't tell me that young people can't do that? My lodger has just bought a house for 87K...it can happen, you just can't have everything all at once. Young people see the older generation with a big house and two cars etc...but forget that they have 40 years on them...and they too will have the big house and two cars in future, they just have to work for them and can't just have that lifestyle NOW.

Malthusian

Comms69 wrote: »

You can opt out of the increased pension if you need to. (Tax is minimal)

You can but it would be a daft thing to do.

Living in a houseshare to reduce costs when you are in your early 20s is fun and sociable. Living in a houseshare or a bedsit in your 60s and 70s because you didn't want free money, less so.

Blackbeard_of_Perranporth

I know we have fake news, but MSE, this is about pensions, and we have carp pensions in this country. We don't pay in enough and expect everything free. personally I would be glad if someone around here looked into the worth of someone earning less than £20,000 a year into these schemes.

Or as my first boss said in 1978, 'Company also has a pension scam, but if I weres you lot, I would not put a penny into the bucket, because when you retire, they'll be nothing left!'

Gavin83

tacpot12 wrote: »

it is just that some of their pay is being paid into a scheme that will pay them something over and above the state pension when the worker retires.

That's optimistic. It seems pretty clear to me that this is a way to potentially eliminate state pensions in the future as why would people need them, they've got their own savings.

andydownes123 wrote: »

Same rent now is about £500...it's not risen THAT much. About the same cost as two iPhone X contracts, probably less...which brings me onto my next point.

I think you're seriously overestimating the cost of a phone contract to make a point, it doesn't cost anywhere close to £250 a month, even on the most expensive options. However I do agree with the majority of your post.

Comms69

Malthusian wrote: »

You can but it would be a daft thing to do.

Living in a houseshare to reduce costs when you are in your early 20s is fun and sociable. Living in a houseshare or a bedsit in your 60s and 70s because you didn't want free money, less so.

Oh I agree totally. I just mean the option exists.

Comms69

Gavin83 wrote: »

That's optimistic. It seems pretty clear to me that this is a way to potentially eliminate state pensions in the future as why would people need them, they've got their own savings.



I think you're seriously overestimating the cost of a phone contract to make a point, it doesn't cost anywhere close to £250 a month, even on the most expensive options. However I do agree with the majority of your post.

Uhm.. Clearly they were referring to the difference between £400 and £500


Which adds up at 2x £50 iphone X contracts

charlotte1994

andydownes123 wrote: »

It is expensive to move out, no doubt, but it's always been reasonably expensive. There are a few observations I've made about young people and budgeting, as I work with young people from the ages of 16 to mid twenties.


1) They believe that can't afford to move out, and it's a self-fulfilling prophecy that affects nearly everything I am going to say from this point on. They believe they cannot afford it. When I first moved out (16 years ago), rent was just shy £400 a month for a two-bed place in a reasonable area, which is cheap I admit, but I live in a northern town. Same rent now is about £500...it's not risen THAT much. About the same cost as two iPhone X contracts, probably less...which brings me onto my next point.
Chuffing hell how much are you paying for your phone? My boyfriend are paying a fraction of that! Also this argument is stupid as not everyone has a phone like that, never mind spends £250 a month on one!

2) I'm 37...nobody had car finance unless they had a house or had moved out. We just didn't think about doing that until we had a roof over our head. Think about that for a secondPeople struggle to get jobs in the local area, for a lot of jobs these days you need a car or your own transport. My boyfriend gets a train to work, his monthly cost is more than my bike payments....kids hit 16 and get a Fiesta ST worth 12k for £200 per month. You can afford that on a part time wage if you live with mum and dad - not an incentive to leave the family home OR could you if you have out-goings before you even move out. The very same car would be completely out of my league when I was that age. We bought cars for £1000 or less. but that was back then. How long would a car costing £1000 last you now? How much would you spend on repairs and insurance?



Having any form of out-goings before you moved out and got your own place JUST DID NOT HAPPEN even in the early 2000s.Yes, but times have changed.Like I said most people can't just walk to their work place anymore. I did but that's when I was living at home, I couldn't afford a house in that area when I moved out so I had to start riding to work.


3) Young people don't actually value their own place. Mum and dad are soft, don't really want an empty nest so there's no real push for them to fly the nest. What young people value is things and experiences - think holidays, nights out and travel.Funny that, I get told by the older generation that I should be doing these things. "Go on holiday while you're young!" Sorry Sandra but I can't afford a holiday. Not been on holiday since 2017 which was paid for by my parents, which I am grateful for. Personally I don't see anything wrong with valuing those things while you're young. I don't do them myself as I literally can't afford but we do get told to do those "and don't worry about the money". The next sentence the same generation is telling young people to stop spending money! Coupled with "I can't actually afford a house anyway, what else do you spend your money on". "I'll have a new MacBook pro this month I think". Yes because they all spend £1000s a month on new computers



Where I live, it's just not that much different now in terms of costs than it was 10-12 years ago. Since the recession, house prices have only just recovered to where they were 12 years ago. My first house I bought on my own in 2007 - 11k deposit, 91k and I was earning around 20k. You can't tell me that young people can't do that? I literally only know 1 person my age who earns £20k. I only have half a deposit because a family member died. Like you said there weren't as many out goings back then. Things are more expensive but wages have not risen as the same rate as inflation. Everything costs more but we're not getting paid the same. My lodger has just bought a house for 87K...it can happen, you just can't have everything all at once. Young people see the older generation with a big house and two cars etc...but forget that they have 40 years on them...and they too will have the big house and two cars in future, they just have to work for them and can't just have that lifestyle NOW.

I don't think people can compare their experiences to those of a 21 year old now. Wages have changed, inflation has changed, you get way less for your money. £400 16 years ago is the same as £620 in today's money. In 1980 if something cost £100 you would need £299 these days.

charlotte1994

Blackbeard_of_Perranporth wrote: »

I know we have fake news, but MSE, this is about pensions, and we have carp pensions in this country. We don't pay in enough and expect everything free. personally I would be glad if someone around here looked into the worth of someone earning less than £20,000 a year into these schemes.

Or as my first boss said in 1978, 'Company also has a pension scam, but if I weres you lot, I would not put a penny into the bucket, because when you retire, they'll be nothing left!'

Tbh I'm glad that auto-enrolment exists, I think that too many people get to retirement age and realised that they didn't have enough money, I started paying into my pension when I was 18, I still do. I think the problem is that people who earn a lower wage anyway (IE under 25s) will feel the hit more. Maybe it should start when they're 25 unless they give the go ahead.

Comms69

charlotte1994 wrote: »

I don't think people can compare their experiences to those of a 21 year old now. Wages have changed, inflation has changed, you get way less for your money. £400 16 years ago is the same as £620 in today's money. In 1980 if something cost £100 you would need £299 these days.
- so rent is cheaper now than it was then?


Tbh I'm glad that auto-enrolment exists, I think that too many people get to retirement age and realised that they didn't have enough money, I started paying into my pension when I was 18, I still do. I think the problem is that people who earn a lower wage anyway (IE under 25s) will feel the hit more. Maybe it should start when they're 25 unless they give the go ahead.

Only those earning NMW.


You're 24, I know several people your age earning £25-30k+






Most people both aspire to earn more than that.

molerat

Should the fake headline not read

"Martin Lewis warning to UK workers over 22 who earn more than £10K but less than £12.5K: You're about to see your pay drop"

because that is the real situation. The increase in personal tax allowance from £11850 to £12500 more than covers the increase in the pension deduction.