Does the State Pension increase every year?

Ganga

bluenose1 said:

The younger generations coming through mostly won’t have the advantages of people 50+ who quite often have decent pension contributions from their employer, especially the older ones who got state pension at age 60, never mind housing.

I also on reflection had a deprived background, outside toilet etc,  remember my mum trying to get enough together to buy a loaf. The penny never dropped until I was an adult why every year I was chosen by school to go to a holiday camp in the country. 

Feel sorry for working class kids today growing up in deprived areas, don’t think there is the upwardly mobile opportunities we had. The middle class children who have had a better education etc will get most of the decent jobs. 

Plus they will have to work until their 70s to get their state pension.
Read somewhere that in UK and USA your wealth and opportunities are very much defined by the wealth of your parents whereas in the Nordic countries they pay more in tax, everyone has decent education, child care etc and your opportunities in life are not dictated by your parents wealth.
I would much prefer a society like that whereas think we are moving to a more USA model with underfunded public services and a culture of blaming the poor for their poverty. A dog eat dog society. Unfortunately even Covid has had a disproportionate financial hit on the young. 

But covid has had a bigger mortality impact on the elderly .

zagfles

ewaste said:

@zagfles I was just getting a more apples to apples to what Silvertabby and Maxi were talking about. If the average cost of a detached is around £350k then what Maxi is looking for will be toward that £400k mark. The poor sod probably already lives among the peasantry in a semi-detached 3 bed but is now looking for more bedrooms, which tend to then be detached properties, and a garden now the kids are getting a bit older. Schooling and catchment areas are a major issue unfortunately.

As for snobbery and trendiness when it comes to location I can understand where you’re coming from, I currently reside on the ‘wrong side' of the river with often inexplicable differences in property prices.

I also prefer older established properties which tend to have bigger rooms and gardens vs the plasterboard tents, shoe boxes or dolls houses being passed off as houses these days. I suppose part of that comes from knowing tradespeople and not being afraid of living in a mess for a month or two while a Kitchen or bathroom gets gutted back to the bare walls and rewired. I’ve lived through a full 4-bed detached rewire, dropped all the ceilings and tossed all the carpets, a good plasterer is truly an artisan.

Round here the biggest houses are Victorian terraces, some with 6 bedrooms, though most have small gardens or just back yards. Houses with the biggest gardens are the 1930's semi's, some of which are large with 3-5 bedrooms. If you want a bigger house with 4+ bedrooms and a decent garden there's no need to get a detached.

Choosing a house for a particular school catchment area isn't sensible. Schools don't stay the same, the best school in my area a few years ago is now in special measures! The individual teachers your kids get are more important, every school will have good and bad teachers so two kids going to the same school could have vastly different outcomes because they had different teachers.

hyubh

SouthCoastBoy said:

One problem we have is that the young middle classes get lost with regards to govt legislation. There is plenty of welfare help for work shy and low earners with working tax credit (never understood that as just encourages employers to pay less as they know govt will pick up the tab), its govts interfering with the free market. 

What until you hear what this thread is (or at least was) about. Basically the government extracts money from current workers on pain of imprisonment and gives it to older people as a regular income. Now, current workers are told that they are 'earning' this regular income for themselves when they get old, but if they think this is some sort of contractual arrangement, they are very much mistaken. It's completely down to the government of the day's discretion!

zagfles

hyubh said:

SouthCoastBoy said:

One problem we have is that the young middle classes get lost with regards to govt legislation. There is plenty of welfare help for work shy and low earners with working tax credit (never understood that as just encourages employers to pay less as they know govt will pick up the tab), its govts interfering with the free market. 

What until you hear what this thread is (or at least was) about. Basically the government extracts money from current workers on pain of imprisonment and gives it to older people as a regular income. Now, current workers are told that they are 'earning' this regular income for themselves when they get old, but if they think this is some sort of contractual arrangement, they are very much mistaken. It's completely down to the government of the day's discretion!

It's not a contractual arrangement but it's worth more than a contractual arrangement, or even a trust arrangment (as most workplace pensions are). More likely for a private/workplace pension to fail to live up to expectations than the state pension, at least that's what history has taught us. If you were a Maxwell pensioner you might get your state pension a bit later than you expected but that's far more than you got from your workplace pension!

As to the future, with most people in DC pensions, I think the state pension is more secure than the stockmarket, even though neither has a guarantee.

Andy_L

Silvertabby said:

Andy_L said:

Silvertabby said:

Nebulous2 said:

Silvertabby said:

Nebulous2 said:

eastcorkram said:

Often puzzled by the fact that apparently I'm to blame for the fact that houses were cheap, well, relatively cheap. I bought my first house in 1982 , a one bedroom so called starter home. It was £21,500. I borrowed £18,500. 
 It didn't feel cheap at the time. 
When I went to view it, what should I have done? Offer £27,995?
I had no influence on the price of houses. Then or anytime since. 

You weren't to blame for getting a cheap house, I wasn't to blame for getting a cheap flat in 1984. Equally, individual members of our generation aren't entirely to blame for having taken more out of the system than we put in over the years. 

However neither are the younger people to blame for not being able to afford the same houses that we could, at the same age and in the same occupations. 

Where members of our generation are very much to blame is in getting opportunities to climb the greasy pole and then pulling up the ladder after us (to mix my metaphors) It's bordering on criminal that a generation which received not only free education, but a grant to live on while they studied, decided to charge their own children tuition fees and gave them loans to fund inflated rent in student accommodation.  

University education may have been 'free' but barely 12% of my generation actually benefitted from it.  In the case of my class, only the GP's daughter went on to do her O/A levels and then university.  The rest of us had to leave school at 15 in order to get jobs and bring money into the house.  

It was Tony Blair's New Labour who introduced university fees, as part of his drive to get at least 50% of children into university and so off the unemployment statistics.  Even he knew that the taxpaying voters would baulk at the idea of paying for this extra flood of uni entrants!

I was brought up in what would today be termed abject poverty.  Outside loo, no central heating, no hot water on tap.  Our summer holiday was a day trip to Blackpool or the Lake District, and our telephone was in a red box in the next road.  Tea on Thursday night (before dad got paid) would be something like jam butties - and my sister and I would be told to be grateful as 'poor' children would only have bread and dripping.  But we clearly weren't officially poor, as we didn't qualify for free school meals.  Cue more jam butties.

Time has moved on, and I would hate to think that children today could be living in those conditions were it not for our current welfare system.  But I certainly don't feel guilty about Mr S and my very comfortable retirement, which is mostly down to our combined 50+ years of service in the Armed Forces.  

I'm not asking you to feel guilty. I don't know your attitude towards younger people. I'm simply saying that my (our?) generation needs to recognise that younger people are not the architect of their own misfortunes. They have been dealt a fairly poor hand. My generation had an expanding middle class, which provided opportunities for lots of us to get out of the poverty you describe. Nowadays the middle is being squeezed, meaning everyone can't aspire to the opportunities we had. In fact the children of many middle class people are dropping into the gig economy, or landing up in minimum wage jobs. 

I wish our youngsters all the best.  My only problem is with those who believe that they are somehow entitled to it all.  Now.  Mr S and I had to work up to what we have, and were only able to buy our 4 bed house (as first time buyers) because of the years we spent in Armed Forces married quarters.  Put some of today's entitled youngsters into a typical married quarter, and they'd scream blue murder!  

As for uni, I think it's sad that so many are putting themselves into needless debt by opting to study for Mickey Mouse degrees.  I recently read about a graduate who had written her final thesis on The Kardashians - and was complaining that she couldn't get her dream job because the companies she had applied to weren't impressed with her "qualifications'!

As a taxpayer, I would be perfectly happy for my taxes being used to train medics, engineers, teachers and other essential professionals.

Are Todays generation of military families able to do that? Probably not.

Perhaps not someone who just opted to serve for a few years, leaving in a junior rank, but can't see why today's SNCOs and above still can't do it.

Married quarter rents are heavily subsidised,  so more chance to save.  The Armed Forces have (or at least had) a scheme which offers an interest free loan for house purchase deposit, with any residual being recovered from the pension lump sum or resettlement grant.  Plus, of course, those of us who served at least 22 years receive an immediate pension from age 40.  Not enough to retire on, but certainly enough to make a big dent in any mortgage payments.

Except, just like on civvy street:
The pension isn't as good as it was

Salaries haven't kept up with house price inflation (or indeed inflation considering public sector pay restraint)

Quarter charges have, AIUI, gone up in excess of inflation as part of a plan to have them reflect  outside rent

hyubh

zagfles said:

hyubh said:

SouthCoastBoy said:

One problem we have is that the young middle classes get lost with regards to govt legislation. There is plenty of welfare help for work shy and low earners with working tax credit (never understood that as just encourages employers to pay less as they know govt will pick up the tab), its govts interfering with the free market. 

What until you hear what this thread is (or at least was) about. Basically the government extracts money from current workers on pain of imprisonment and gives it to older people as a regular income. Now, current workers are told that they are 'earning' this regular income for themselves when they get old, but if they think this is some sort of contractual arrangement, they are very much mistaken. It's completely down to the government of the day's discretion!

It's not a contractual arrangement but it's worth more than a contractual arrangement, or even a trust arrangment (as most workplace pensions are). More likely for a private/workplace pension to fail to live up to expectations than the state pension, at least that's what history has taught us. If you were a Maxwell pensioner you might get your state pension a bit later than you expected but that's far more than you got from your workplace pension!

As to the future, with most people in DC pensions, I think the state pension is more secure than the stockmarket, even though neither has a guarantee.

Now now, don't make SouthCoastBoy mad with such ultra-statist views. For a small fee I can offer you a slightly tattered copy of Anarchy, State and Utopia to correct such thoughts - deal...?

arnoldy

Salaries haven't kept up with house price inflation (or indeed inflation considering public sector pay restraint)

I think this is particularly a UK problem, when the population goes up from 56 million to 66 million in a couple of decades that's hardly going to result in lower house prices. In Italy you hear of stories of houses and entire villages going for the price of a 1 bed in Slough etc. Its turned into a huge divisive social issue, what a mess - and not great for our kids : loose loose: build millions more houses and turn us into a suburban sprawl, or put up with overcrowded expensive housing, or use the bank of mum and dad (probably even more divisive for the have nots and social mobility)

MaxiRobriguez

zagfles said:

MaxiRobriguez said:

Silvertabby said:

MaxiRobriguez said:

Silvertabby said:

MaxiRobriguez said:

Silvertabby said:

Nebulous2 said:

Silvertabby said:

Nebulous2 said:

eastcorkram said:

Often puzzled by the fact that apparently I'm to blame for the fact that houses were cheap, well, relatively cheap. I bought my first house in 1982 , a one bedroom so called starter home. It was £21,500. I borrowed £18,500. 
 It didn't feel cheap at the time. 
When I went to view it, what should I have done? Offer £27,995?
I had no influence on the price of houses. Then or anytime since. 

You weren't to blame for getting a cheap house, I wasn't to blame for getting a cheap flat in 1984. Equally, individual members of our generation aren't entirely to blame for having taken more out of the system than we put in over the years. 

However neither are the younger people to blame for not being able to afford the same houses that we could, at the same age and in the same occupations. 

Where members of our generation are very much to blame is in getting opportunities to climb the greasy pole and then pulling up the ladder after us (to mix my metaphors) It's bordering on criminal that a generation which received not only free education, but a grant to live on while they studied, decided to charge their own children tuition fees and gave them loans to fund inflated rent in student accommodation.  

University education may have been 'free' but barely 12% of my generation actually benefitted from it.  In the case of my class, only the GP's daughter went on to do her O/A levels and then university.  The rest of us had to leave school at 15 in order to get jobs and bring money into the house.  

It was Tony Blair's New Labour who introduced university fees, as part of his drive to get at least 50% of children into university and so off the unemployment statistics.  Even he knew that the taxpaying voters would baulk at the idea of paying for this extra flood of uni entrants!

I was brought up in what would today be termed abject poverty.  Outside loo, no central heating, no hot water on tap.  Our summer holiday was a day trip to Blackpool or the Lake District, and our telephone was in a red box in the next road.  Tea on Thursday night (before dad got paid) would be something like jam butties - and my sister and I would be told to be grateful as 'poor' children would only have bread and dripping.  But we clearly weren't officially poor, as we didn't qualify for free school meals.  Cue more jam butties.

Time has moved on, and I would hate to think that children today could be living in those conditions were it not for our current welfare system.  But I certainly don't feel guilty about Mr S and my very comfortable retirement, which is mostly down to our combined 50+ years of service in the Armed Forces.  

I'm not asking you to feel guilty. I don't know your attitude towards younger people. I'm simply saying that my (our?) generation needs to recognise that younger people are not the architect of their own misfortunes. They have been dealt a fairly poor hand. My generation had an expanding middle class, which provided opportunities for lots of us to get out of the poverty you describe. Nowadays the middle is being squeezed, meaning everyone can't aspire to the opportunities we had. In fact the children of many middle class people are dropping into the gig economy, or landing up in minimum wage jobs. 

I wish our youngsters all the best.  My only problem is with those who believe that they are somehow entitled to it all.  Now.  Mr S and I had to work up to what we have, and were only able to buy our 4 bed house (as first time buyers) because of the years we spent in Armed Forces married quarters.  Put some of today's entitled youngsters into a typical married quarter, and they'd scream blue murder!  

As for uni, I think it's sad that so many are putting themselves into needless debt by opting to study for Mickey Mouse degrees.  I recently read about a graduate who had written her final thesis on The Kardashians - and was complaining that she couldn't get her dream job because the companies she had applied to weren't impressed with her "qualifications'!

As a taxpayer, I would be perfectly happy for my taxes being used to train medics, engineers, teachers and other essential professionals.

The one graduate in the UK that wrote their final thesis on Kardashians is a nice story which perpetuates the myth that the young are feckless and entitled.

I work a 55 hour week, earn in the top 10% of incomes, put away 60%+ of it, got a 2:1 from a redbrick in computer science and maths a decade ago. I am the absolutely archetype of what some in the older generations say young people should be - yet I can't afford a four bedroom place, even when adding in my wife's salary. What are we doing wrong?

I really don't think some older people realise how broken our system is, nor how much they lucked out. It's almost like a form of survivorship bias.

Based on what you have said, I'm sure that you'd be able to afford a house like ours.

4 bed, 2 bath, separate dining room, utility, garage plus off road parking for at least 2 cars, decent sized garden in a very nice market town.  Yours for just over £300K.

The only thing it doesn't have is a London post code.  Choices, choices......

I don't live in London, I live in that notoriously well-to-do and expensive area of..... the East Midlands. A 4 bed like you described above, with a reasonable school to send our nippers to, starts at half a million. We're about £75k short, and whatever we save the affordability actually gets less each year.

East Midlands?  Wow, that's a shocker.  If you really want that particular area, could you go for a 3 bedroom with room for an extension/loft conversion later? 

Yes, we're on the look out for those as well - most of those are right at the top end of our ~£400k budget. Some you can get for £300k if they're in a complete state of disrepair, which would be fine but wife is due to give birth in six weeks so not really appropriate!

Sounds like discussions on student accomodation. Seem to have had loads of those recently where people have said it's horrendously expensive and then when challenged with actual facts admitted they were only looking at accomodation in expensive trendy areas.

Average price in East Midlands is about £228k  https://www.zoopla.co.uk/house-prices/east-midlands/

I know we get forgotten about quite a lot, but the East Midlands is a relatively large area and it's not appropriate for me to use all East Midlands as a search criteria, unless I wanted to look for a new job, in which case I'd probably end up taking a pay cut, which then reduces my affordability for the cheaper house.

Also, your £228k figure is an average of all houses. I was discussing detached houses. If you filter the property type by detached it whacks the average figure up to £350k. This is less than what I see in my more local area but as per previously discussed, the £50k gets added on from a good school catchment area.

I don't think you realise how insulting it is to continually belittle the younger generation for being feckless or for making up problems. Again - for the third time, go and read all the previously supplied data. There is a problem. You cannot just pretend it doesn't exist because you want to feel morally superior about winning at life through your hard work rather than your year of birth. 

MaxiRobriguez

mgdavid said:

MaxiRobriguez said:

Yes, we're on the look out for those as well - most of those are right at the top end of our ~£400k budget. Some you can get for £300k if they're in a complete state of disrepair, which would be fine but wife is due to give birth in six weeks so not really appropriate!

There are threads in the archive on the subject of life planning and prioritisation too - in my world we only started a family after we'd bought a house, and we sized the family to the house and lifestyle we could afford. Everyone is different, there's no right and wrong, but there are consequences.

That's the point. You could save for a house. There are millions of young people now that cannot do so, even if they saved 100% of their post tax income, because house price inflation outpaces their ability to save.

It's not a small niche of young people, it's about half of them. So if the answer is don't start a family until you buy your own house then we're going to have a population crisis in a few years time instead.

Again, the data is widely available for you all to read. Every response that includes "in my world" or "I did this" misses the point entirely. You were able to do that because economic conditions were different back in your day. Nothing to do with your hard work (which I don't doubt you all did).

MaxiRobriguez

For what it's worth, and sorry for taking over the thread, this will be my last post... I'm not bothered about me here, I'll be fine. We may not get exactly what we want but we'll be able to live comfortably and retire well.

I get frustrated because I see so many friends being left behind through no fault of their own. They all work hard, try to save, take steps to better their pay etc but they're stuck renting for far too long and whilst doing so their pension is too overlooked in order to try and meet immediate goals. They will eventually afford a house, but it may take them to their mid-late 30's to get on the ladder, and then following on from that they won't be able to retire until 70's. These are people who work in critical professions, earn near enough the median salary. 

There is a crisis, it needs addressing.