Live fast, die in poverty

TRUSt_NO_1_2

The era of save a little (6%),live happily ever after are gone.
Today’s pensioners will be looked back with envy.
You're going to need at least 20% growth in your pension/savings to make any reasonable headway...certainly for the next 5 years.
Food is skyrocketing.
Oil is running out and is sky rocketing which will lead to all sorts of major problems (read 'The Long Emergency').
All commodities, the basis of most comforts in life, are skyrocketing in price.
The British government is bankrupt, which is why they keep coming up with various excuses to tax anything they can.Their public sector pension liability is HUGE.
Linking pension to earnings...ha ha…nice one...earnings falling...even there own manipulated inflation figures about to go up big time. Even the dumbest people are realising that 3% inflation is boll**ks.
So most people are going to be in poverty, even saving 6% of their income.
If I was 29,I would not entertain a pension, unless I was getting a significant employer contribution.I'd still think twice as in an 'emergency' you can forget any idea about getting access to it.

Andy_Hamilton

I think I'm one of the only people I know who has there head screwed on.
I'm 27, started my company pension at 22 (company and me paying 5%).
Last year my company had a wonderful offer for EVERYONE to move from the CARE pension to a stake holder. I was bribed with 3X my pension pot (£18K total) plus my company have added an extra 1% for there contributions. I was the only person who accepted the offer!!
Last week, letters were sent out to say the company pension is getting frozen and there is no enhanced transfer value. (now there's a supprise)
You should hear everyone saying "it's not fare" but the worst bit I hear is how many people don't have any pension.

"it's not worth it" etc is all I hear.

Fingers crossed I'll be on holiday when there all having to work.

Andy_Hamilton

When speaking to people at work they see it as a pay cut of 5% now not a pay rise of 5-6%.
I'm not one for getting into an argument how I'm hoping to make a better life for myself and if they're happy to spend there extra £80-100 per month that's upto them. I'm also just starting off on the property ladder (new build 3 bed house for £83K, now that's being wise with money and using the "key workers" benifit) and i'm wanting to pay it off in 10 years. I have more people thinking I'm mental getting a lodger. Nest egg for me!

EdInvestor

dunstonh wrote: »

Looking back to the 90s when I bought my first house, we didnt go out and buy new furniture and get top end furnishings. We had a few gifts from parents and gradually built up over time. That was generally the norm.

Now, you see first time buyers (in general) spending more on credit to buy more expensive items quicker than before.

I do think we need to bear in mind the relative affordability, which has changed dramatically over the years before assuming everyone is in debt and consuming mindlessly to excess. For instance, the price of TV sets has fallen by 75% since the 1980s. By contrast the basic wage has increased by 500% since the late 1970s.It's a win win situation for many, especially the lower paid.:)

What looked expensive to us 20or 30 years ago, is now cheap.The China effect has added to this with consumer goods clothing and footwear all falling in price over the last decade. Prices of things like airline tickets have barely changed in 25 years, so the result is long haul airline travel is now affordable by people on modertae salaries, whereas formerly it was only for the well off.

http://www.statistics.gov.uk/articles/economic_trends/ET626_CPI.pdf

Good food is now very reasonably priced and so is fuel.In the 70s and 80s gas,elec, telephone cost a boom, alcohol and tobacco were extortionate, and as for tax! Yes, house prices have risen a lot (mainly due to lower interest rates) but so has the quality and affordability of the property: in the 70s, less than half the population owned their home, now it's 70 per cent.

People in the UK are far better off than they were 20 years ago, the country is now on the same kind of prosperity level as its peers ( eg the US, Australia, Canada).It's a considerable positive change.

aqueoushumour01

dunstonh wrote: »

I'm not sure the pressure has increased much. Housing costs are in relation to income are back to around 1991 ratios so its not something new we are seeing here. Whilst we arent talking about property being at £50k anymore, we also dont see average income at £10k either.

I'd be interested to know where you're getting your figures from. House price increases have far outstripped rises in income and house price to earnings ratios have therefore risen. Hence the reason why people are worried about a crash as house prices have become very unaffordable, especially for 1st time buyers.

dunstonh

aqueoushumour01 wrote: »

I'd be interested to know where you're getting your figures from. House price increases have far outstripped rises in income and house price to earnings ratios have therefore risen. Hence the reason why people are worried about a crash as house prices have become very unaffordable, especially for 1st time buyers.

Here is just one of the many sources that show that we are back to late 80s/early 90s (pre crash) levels

http://www.hbosplc.com/economy/includes/25_01_08HFAX_regional_affordability.xls

I'm in East Anglia which had a high of 6.87 in quarter 4 of 1988. Q4 of 2007 was 6.19. Down from the "recent" high point of 6.4 in Q2 of 2007. It doesnt matter what regions you look at, the current levels are right on or close to the peak earnings ratio that was in place before the house price crash of the early 90s.

What has happened is that people have forgotten the last house price crash (in general) and have only looked at the growth from the low point of earnings to house price ratios. We are just in another cycle similar to what has gone before. This is not new. Its a repeat. The figures are bigger but the percentages are the same.

exil

At each cycle the income multipliers are higher than at the previous cycle - because real disposable incomes are increasing over time.

In the early 90s interest rates were much higher than today which caused a "hard landing". Even so the effect was a slow drift downwards in price over a few years, not a "crash".

Andy_Hamilton

I have just spoken to one of my work mates, he said that because he has been in the scheme for less than 2 years they have offered him his "pot" in cash. A total of £1300 which he is clapping his hands at. I tried to explain that he is losing 5% contibutions but apparently "paying into a pension is not going to get him an X-BOX".

I now bang my head!!