Does the State Pension increase every year?

zagfles

MaxiRobriguez said:

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. 

What are you on about? Have you read what I've written? And in the other thread I linked earlier where we discussed intergeneration issues in some depth, particularly housing. I know there's a general problem with housing that affects young people, it's something I've ranted on about here for years.

But on the specifics concerning housing type - I've never owned a detached house in my life, although my parents did and so I grew up in one. I don't consider owning a detached house to be some sort of right just because that's what my parents had or that I'm supposed to feel hard done by because my parents had something I didn't. They also lived in a much more expensive area than I do. No way on earth could I afford to buy the house I grew up in.

That's not saying there aren't housing issues that affect younger people. If I could alter history such that prices remained the same in real terms as when I bought my house in the late 90's, then I would. I see no benefit in my house being worth 2 or 3 times what it was when I bought it, as I don't intend to downsize, but my kids will have to pay silly prices when they buy a house so I'll probably need to help them out. Even £228k is a silly price for an average house. House prices rises are a negative thing for many/most home owners even if most are too stupid to realise it.

But I'll reserve my sympathy for young people who can't even afford a shoebox flat, rather than those who feel hard done by because they can't afford a detached in a particular local area. Because nor can I.

ETA: on the school catchment area, if it really costs £50k more to live in the catchment area of a certain school, then how do you measure that the school is actually better? Better results? But what is the cause and effect?

It's well established that children of richer parents do better in school. Some argue this is purely because of their financial status, others that it's because richer parents are richer because they did well in school/uni and so got well paid jobs, and the children inherit these traits and as well as this get more parental encouragement and help and so do better in school than poorer children.

But whatever the reason, the link between parental income and kids doing well in school is well established. So, if it costs £50k more to live in the catchment area of a particular school, obviously the kids going to that school will tend to have richer parents, and so would be expected to do better in school on average, regardless of whether the school is actually any better or not.

And so it becomes a self perpetuating myth - possibly sparked by a grain of truth, maybe 40 years ago the school was better and got better results, causing house prices in its catchment area to rise, causing (over several years) the local demographic to change in favour of richer families, causing the school to get even better results, causing house prices in its catchment area to rise even more...meanwhile the teachers who caused the school to be good 40 years have long since retired...

zagfles

arnoldy said:

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)

The housing stock has risen faster than the population over the last 50 years. It's not a supply problem, it's a demand problem.

TVAS

MaxRodriguez they get the triple lock because they are old and they turn up to vote. 

You are complaining about the wrong point. Why are we giving rich pensioners and I know of many through my previous contracts who have a gross pension of 6k pm, winter fuel allowance (WFA) and free bus passes?

We should give double or treble the WFA to poorer pensioners who only live on the basic state pension.   

Of the £217 billion spent on welfare payments in 2016-17, around 59 per cent was paid to pensioners, with state pensions the largest single item at £92 billion

Ganga

TVAS said:

MaxRodriguez they get the triple lock because they are old and they turn up to vote. 

You are complaining about the wrong point. Why are we giving rich pensioners and I know of many through my previous contracts who have a gross pension of 6k pm, winter fuel allowance (WFA) and free bus passes?

We should give double or treble the WFA to poorer pensioners who only live on the basic state pension.   

Of the £217 billion spent on welfare payments in 2016-17, around 59 per cent was paid to pensioners, with state pensions the largest single item at £92 billion

The state pension is not a Welfare Payment ,it is something that we have earned thru our NI contributions ,if a pensioner has an income of £6k per month then they must have invested an awful lot of their income when working. as for Winter Fuel Payments and Bus Passes ,would you like all pensioners to be means tested for these ? 

arnoldy

Of the £217 billion spent on welfare payments in 2016-17, around 59 per cent was paid to pensioners, with state pensions the largest single item at £92 billion

"State Pension"
Which is a return for 35+ years of paying NI. £5k a year + for many of us, imagine what we could have done and got with that money invested. And yes most of us don't mind that some pay in more than we get out of NI. But to call it a benefit is misleading. On the same basis you would call and endowment policy or regular savings account a benefit!

hugheskevi

I think the 2014 Pension Act is clear on the status of State Pension:

1       State pension

(1)    This Part creates a benefit called state pension.

zagfles

A "benefit" doesn't mean it's not earned, or that it's welfare. For instance, if you get "benefits in kind" at work, for most purposes they are treated as something you earn rather than some sort of welfare payment.

Silvertabby

TVAS said:

MaxRodriguez they get the triple lock because they are old and they turn up to vote. 

You are complaining about the wrong point. Why are we giving rich pensioners and I know of many through my previous contracts who have a gross pension of 6k pm, winter fuel allowance (WFA) and free bus passes?

We should give double or treble the WFA to poorer pensioners who only live on the basic state pension.   

Of the £217 billion spent on welfare payments in 2016-17, around 59 per cent was paid to pensioners, with state pensions the largest single item at £92 billion

We are not pulling in anywhere near £6K per month, but Mr S hasn't bothered applying for a bus pass (nor will I next year) and we give our WFA to relatives who need it more than we do.

I'm sure we are not the only pensioners who do this.

AnotherJoe

Langtang said:

As above. We are looking to retire in 2 years time, aged 60. SPA isn’t until 67, so I was wondering if there was an annual increase in the pension? Trying to figure out what our pension will be in 10 years time rather than using today’s figure of c£9100. Has the pension increased in previous years, if at least. Sorry if the answer is out there in google-land. 

This is a long thread so i have no idea if this has been covered in another post, but theres no point in looking at what the figure will be in 10 years time because you wont be taking inflation into account. In ten years time, it shoudl be roughly £9100 in todays money because the pension increases are roughly going to keep pace with inflation and no more.

So, if you can buy 3,000 big macs with it today, in ten years time you'll still be able to buy 3,000.

Langtang

AnotherJoe said:

Langtang said:

As above. We are looking to retire in 2 years time, aged 60. SPA isn’t until 67, so I was wondering if there was an annual increase in the pension? Trying to figure out what our pension will be in 10 years time rather than using today’s figure of c£9100. Has the pension increased in previous years, if at least. Sorry if the answer is out there in google-land. 

This is a long thread so i have no idea if this has been covered in another post, but theres no point in looking at what the figure will be in 10 years time because you wont be taking inflation into account. In ten years time, it shoudl be roughly £9100 in todays money because the pension increases are roughly going to keep pace with inflation and no more.

So, if you can buy 3,000 big macs with it today, in ten years time you'll still be able to buy 3,000.

Wow, back on track at last (interesting as the deviation was). Thanks for that. I guess I should also take out a gym membership when I retire, as it'll take a bit of effort to shift the damage caused by all those burgers. Challenge accepted, though.

I appreciate your reply, and can see what you're saying.