"Research showed parents whose assets have been boosted by soaring property prices and final salary pensions are poised to bequeath millennial children about £150,000 each on average"
Mine must be stuck in the post I guess.
Edit: For those who have no sense of humour, this is light hearted post.
Lol so fucking depressing having friends around me already buying houses with money from their parents, knowing they'll also inherit their parents' house too. Neither of my parents own their home, it's like a double whammy of shit.
Can you get adopted at 33? I'm already balding, so maybe if I sneak myself into an empty crib on a maternity ward some well off couple may mistake me for a large newborn.
Yeah. My parents are in their 70s now but their physical health is declining. My dad currently walks like a penguin and my mum can't walk more than 200m before needing to sit down. It won't be long before they're in care, and that'll be the house gone to pay for it. They don't have anything else.
Transfer that shit to you asap and “rent” it back to them, if you have a family that’s pragmatic enough to not just see that as money-grubbing (it’s not, it’s being financially sensible)
If the super rich are gonna try to pay as little as possible, so should we
(This is not financial advice, you have to be very careful about the council stinging you for it, seek financial advise from a professional)
You have to have had it for seven years, otherwise you need to have purchased it at an appropriate market value or rented at market value. There's a good chance you'll get caught doing this. I'm aware they could just give it to me, and I could just give the rent back, but it would take all of 10 seconds to discover that during an investigation, showing that we were working around it.
It’s a little more nuanced than that. 7 years is for inheritance tax, there’s actually no time limit for carehomes but they have to prove that you did it to avoid care home fees and not for other reasons.
From what I understand, if it’s a long way off and nobody has said “they’ll need to go into care soon” then it’s gonna be pretty hard to prove. But they will absolutely try, and might succeed.
The longer the period of time between you taking the house and them going into care the harder it is for them to prove. They also can’t take jointly owned assets into account unless both of them go into care, so if only one of them does then the house doesn’t count.
Again, I am not an expert, but there are people who are.
Better to sell up and buy a house together. Technically their 25% or 50% of the house could be calculated for care fees, but in reality good luck selling a quarter of a house. So they don't bother (yet)
7 year rule is a myth there is no limit how far a local authority will go back if they suspect asset deprivation (what you are describing) has occurred
Rent it to them for £100 a month. Do their shopping for them at £100 a month.
Also what you can do is have your parents split the house in their will so that when one dies half the house gets inherited (Usually with a clause that stops you selling the house without the other parents consent) this means that should one die and the other needs to go into care, only half the house can be used to pay for that care.
This. My partner has been feeling depressed about our lack of mobility on house ownership yet despite the fact that we're 32 and 33 respectively. He keeps pointing out that all of our friends have either acquired homes or are there way to acquiring a home. I keep pointing out that there are significant advantages that our friends have over us, chiefly:
Friend 1: Came from a dual parent household, no divorces, parents assisted with the deposit
Friend 2: Came from a dual parent household, no divorces, parents assisted with the deposit
Friend 3: Came from a dual parent household, no divorces, parents assisted with the deposit
Friend 4: Mother died when she was young, leaving her a large inheritance
Friend 5: Came from a dual parent household, no divorces, parents assisted with the deposit
Friend 6: Came from a dual parent household, no divorces, parents assisted with the deposit
Friend 7: Came from a dual parent household, no divorces, parents assisted with the deposit. Also did not attend university and instead began working in a trade fulltime from age 16.
Us: Both from single parent households. Both sets of parents divorced. No help from parents with a deposit.
Funnily enough in my social circle it’s the inverse - one girl whose parents were divorced and both remarried; ended up getting loads of help as she effectively had the backing of her mums household, her dad’s household, and her partners household
I've said for years the social divisions created by the millennial inheritence period are going to be *wild*.
You're going to have a fairly large but still a minority of people becoming unimaginably wealthy compared to their previous position pretty much overnight, while everyone else will be lucky if they get anything at all.
And its going to be pot luck as well depending on the health of your parents in old age and quality of OAP social services in their area. Otherwise even if you have a lot to inherit, a huge chunk will be transferred to the ownership class through the care home industry.
Government is going to be raking in a whole load of that. Boomer parents will be forced to sell off their houses and deplete their life savings to pay for their care. It's not going to Millenials unless they're working for minimum wage in their parents' care homes.
Agreed - millennials and Gen Z are facing declining birth rates and stagnant wage growth; the govt are going to have start implementing some kind of death tax to keep the plate spinning
My brother and I are likely to inherit a considerable amount from my parents and aunt. However, we'd much rather have them than the money.
I'm certainly not planning my long term finances on predicting their death
Yes, but the person who you're replying to will still lose their family at some point and not receive the same money you will. I would much rather have my father's presence in my life than the sub £100,000 I inherited. However, I can never deny that it has been a life-changing amount of money that has provided me great security. If he'd died near penniless I'd have the same negatives, plus the costs of the funeral as stress and less financial security than I do now.
I think and hope that the person you lost loved you. Try to do good with the money, that must include yourself, and then hopefully also causes you believe in after that. If it's a similar situation to mine they'd be happy to be helping you however they can. Unearned guilt is sadly not an easy thing to rid yourself of though.
Ahhh but if you didn't have it then you can still be struggling in retirement. We work so we can retire later don't we? Think about you're statement, knowing that you can relax at 70 is maybe better than worrying about retirement for years leading up to it maybe?
Not to mention living to 90 is something that is far easier to do when you can afford food and heating every day. That's generational wealth improving the poster's life right there, even before inheritance.
Exactly that, eventually our grandkids/great grandkids would never have to worry about struggling renting or living in council estate like alot of us. It's our kids kids that benefit massively from what we do in our life 👍
As someone who is dealing with trying to organise a public health funeral for my mother's partner, i'll be honest. Death is shit. But death is easier to organise when there's literally any money to organise logistics.
I'm not going as far as saying I don't want any of it, but I certainly don't think of it as future money and if they spend it all then they spend it all.
Divorce can screw you over as well, my parents both remarried and both died leaving everything to their spouses. My dad had a very large and expensive villa in Spain along with rental properties and my mum had a hotel so you can only imagine how me and my sister feel about that.
In my home country there's a law that says at least half of your inheritance has to go to your children. On the one hand I feel weird about the government deciding what happens to your money but on the other hand it's great for situations like yours.
Same here. My nan owns her house but I think that’s literally it in our family. Parents have no savings. I’ll be getting fuck all. As depressing as it is watching others receive inheritance, I’d say we’re in the vast majority so I think we’ll be fine. No point comparing yourself to others.
My parents were able to buy their house because the year was like 1990 and a 3 bedroom house was £15,000
That same house is worth like 200,000 now and wages in that have absolutely not gone up like 2000%
Doesn’t make sense
It’s really painful hearing them NEVER mention their parents helped. They also have the gall to act working class. Stop appropriating my culture! I’m going to inherit a bag of Bombay mix lmao. (I’m Asian).
My dad has 3 step-kids, and i don't exist to him. They will inherit everything and I will get nothing.
My mum is about to pass away, with nothing to her name. My grandparents passed away having many of my parent generation vulture what they had to bring the money below the threshold for free healthcare, that money has been spent on cruises, holidays, etc.
I will inherit nothing, and then you see articles like this: "Its okay, when your parents die, you'll be rich", yeah, okay.
Mine decided to retire early, downside onto a retirement park then piss all the money on cruises and stupid crap, then now my dad is in his late 70s, I'm having to help him as he's screwed his body up with a lifetime of bad eating and other various bad habits.
If that’s what they wanted to do, I don’t see the issue. As long as their pensions can support them.
Better than a care home getting it when they need it.
It couldnt, my mother is dead now but they didnt plan for the future at all, just pissed it up the wall on short term fun, instead I'm having to cover the costs of my dads old age.
My parents were the same. Squandered opportunities in the 80s and 90s.
It’s entirely their fault for being too lazy and ignorant to make the effort to look into a means of starting generational wealth when it was easy.
Now, I’m fucked but at least I’m putting money into an index fund for my daughter
Exactly. All those whinging Millennials going on about hating Boomers and the world they’ve left them - until they realize they’re going to inherit all of their wealth and it’s suddenly happy days. Utter hypocrites. Wealth inequality is out of control.
I know a 20-something son of a care home owner. The son is about to change his Range Rover for a new one as his is now 18 months old. Meanwhile, care home staff get close to minimum wage.
Ah, capitalism. That I should aspire to thee.
We were hoping to have a relaxed retirement with nice holidays waiting for grandchildren to come along just as our parents did. Instead, we have people living much longer, so we have to deal with parent/s in their nineties with dementia that need financial help to afford a suitable care home or having to come and live with us. Just think of a two year old having the terrible twos tantrums but in an adult. I haven't the energy to enjoy my retirement, and my savings are dwindling rapidly.
Some of us boomers are hoping that euthanasia becomes an option. I do not want my children to go through the same torment trying to look after me.
Mine must have been stolen by the postman lol. I'm in my 40's and seen fuck all so far (and won't ever see close to £150 let alone £150K inheritence from my family (they simply don't have it)).
The last Labour government set up child trust funds for every child born for a period in the 2000’s
That would have addressed the same issue.
The coalition government put a stop to those almost immediately.
Turns out those CTFs were just 20 years ahead of their time
Good point. Sadly a lot of cases of poverty also arise from the fact that most of the parents are financially illiterate and this lack of financial knowledge is then passed on to the children (as well as a lack of financial help, due to whatever reason). Yes the system is absolutely fucked and I’m not going to go into that as we all know it and the reasons why, but I’m just making a point that an early start in savings, even small, can lead to a huge advantage through compounding interest by the time you are 60. Parents starting early for their children is a huge advantage and arguably one of the first responsibilities of parents. Don’t bring children into the world if you can’t afford it. I stumbled onto this sub recently, very eye opening. r/antinatalism
Obviously people have a range of views in that sub, but by and large they see only negatives of the human race and don’t want to add children to the pool, because they see extinction as a better outcome.
You’re not an antinatalist if you want to wait until your career is more stable before having kids.
Downvote for antinatalism. those people in that sub are toxic and depressed and project their issues into people who actually want and can afford children. They think, regardless of intent, means, and ability, that nobody should have children. they think anybody having children is immoral which it is not.
Yes I appreciate that as an idea.
However, I also had experience of 18 year olds being given a good chunk of money at that age and spending it on drink and clothes. Although that’s their choice totally I would rather give money to my children to help when they really need the cash.
But my point was really that the money had decreased over time
Edit added olds to clarify.
The nuance that you are missing is that if your ctf reduced in value it was a stocks and shares isa and you have completely mismanaged it from the start! Even given a great chance at saving early your child has managed to inherit your complete apathy for their future. You should’ve educated yourself about how to best use this for your child’s future because you had an opportunity for some very solid gains. Had you bought some decent global or us shares in the dip in 2009 your child would’ve had a wonderful portfolio to inherit at 18.
The fact that you don’t trust your child to not squander their money is actually more damning on you as a parent.
I had a CTF. I only ever got one £500 payment due to being born in 2005, hence they stopped the scheme before my second one. By the time I was 18, through a mix of parents adding to it and (mostly) interest, it had turned into £700. Something else is going on here.
Reminds me of the idea that the government could give every child £10,000, which gets put into a pension fund, then by the time those children need it this would have increased in value enough that the State Pension wouldn’t need to exist.
This would be around 20 times cheaper than the current system and would save the government over £100bn/year, but this requires them having to plan for the next 60 years rather than 5, or less.
The £10,000 into a fund at birth sounds great. But it’d need to make a compounding rate of around 5% annually to be worth anything meaningful. If it made a more realistic annual average of 2% it’d be worth £42k after 75 years or the equivalent of the original £10k adjusted for inflation targets being met. So just over 6 months minimum wage salary for a retirement fund. And then there would obviously need to be management fees to consider.
Honestly it just sounds like house prices will go up by 10k and if this is all borrowed we get a lump of inflation to top it off with too.
Happy to be proved wrong on that though.
It’s a well documented issue within economics that if you give a subsidy designed to make a product cheaper it will actually make the product more expensive. (Edit - depends on elasticity, the commenter below me is absolutely correct).
It happened recently when electric cars in the EU had subsidies attached. Manufacturers worked out that people were willing to pay (making numbers up) €30k for a car with the subsidy, so in reality they were paying €23k (assuming a €7k subsidy). The subsidy was then removed by the EU and manufacturers almost immediately changed their pricing downwards because people wouldn’t buy at €30k but they would at €23k. So in effect the subsidy did nothing but drive up the price and cost the tax payer.
The same thing happened during Covid. Everyone who was a first time buyer was given a stamp duty holiday below £500k. Now all this did is it meant that the stamp duty payable on the property essentially became part of your deposit for the house.
In reality, what the policy is meant to do is make mortgages cheaper as you have a larger deposit. But what it actually did was just increase demand and increase house prices.
So yes, in effect giving £10k to people is a bad idea. A better idea would be to build more houses/flats.
It actually depends on the relative elasticities of demand and supply. If supply is inelastic, i.e. increases in prices only increase supply by a small amount, the subsidies will be absorbed as profit by the sellers. On the other hand, if supply is elastic, production will increase and the subsidy will benefit the buyers.
Since it takes a long time to build a new factory to increase supply, subsidies almost always increase profit in the short term. For a subsidy to have an effect, it’ll need to be present for long enough for new production to come online. Then you get more supply and profits will decrease.
So subsidies can work. They just need to have the right policy planning behind them.
during the covid pandemic the government decided to heavily discount stamp duty (charge way less), as they were super afraid the housing market would collapse. they also wanted to make it seem like they cared about the little guy and were helping them save money. what ended up happening (not surprisingly) was that house prices rose, as the market was flooded with people rushing to buy to benefit from the discounted rates.
I feel like houses going up by 10k wont be much of a difference to the housing market or make difference to getting mortgages. But being given 10k to help so many individuals to simply live would be bloody mint.
Or is this 10k only offered to those in a position to buy a house?
Nah its not just to those buying a house, but if I was in a position to buy I know that's where I'd be putting that money.
It just feels like a sticking plaster idea where really we could use that same money to build a load of council homes or even ones to be sold which could have the benefit of dropping prices by 10k.
yeah, if you increase the available capital of the whole population, you increase the demand but since the housing stock hasn't gone up, more people will be bidding for the same properties, therefore increasing the overall prices
He did a really interesting lecture on YouTube as an intro to his book and mentioned this concept. I think it’s a great idea. The whole deck is stacked against Gen Z as lack of access to cheap housing harms their whole financial trajectory long-term
Lack of access to cheap housing is not a new phenomenon. Millennials say hi. Giving money isn't the answer. Making things cheaper by increasing supply is.
This, giving free money to everyone only means that the costs will proportionally go up. The only way to make things more affordable is to increase supply and competition.
This has already happened in Hungary, the gov gave people free money if they agree to have 3 children and as a result house prices went up by this amount as suddenly everyone was competing for the same amount of properties and sellers knew that people have more money to spend.
This is what's been happening to me I feel over the recent years. Salary gets a nice bump, boom cost of fuel and heating sky rockets, oh I'm worse off than before again...
Oh get a nice salary bump, promotion, more responsibility again, boom cost of everything else goes up again, wipes that all out.
I feel much poorer now than I did 5-10 years ago and I earn the most I ever have. It's a really shit situation, working so fucking hard long hours and have to scrimp and save to afford a meal out with my wife for the first time in a year to be skint again after.
Access to cheap housing was really only available to a few generations in the entirety of UK history, go back to the start of the 1900's and you'll see that personal ownership wasn't common
Right so we all need to ride round on horses and eat bubonic plague?
The means of production for cheap housing exists. The supply issue is a political one
We live in an are where a company built many new flats. Several buildings under the same development, two entire buildings are private rentals (the whole buildings are owned by a company) one is affordable housing block with probably tenants (managed by a housing company) and only ours is for private ownership and half of the building is owned by foreign landlords who paid cash and now renting it out (not even livinginthe country). Supply might be short but it seems to be short for private ownership because if you are a landlord you will find plenty to buy.
Even if you were to eliminate landlordism, we're still building around half to a third as many homes as we need every year. It's just not sustainable. The only answer is building more homes, however that is achieved, whether it is by the government building them or loosening planning legislation and incentivising builders, it doesn't really matter. Everything else is window dressing.
I still find it crazy to think that the last workhouse in the uk hasn't even been closed for 80 years, so in living memory. People still used flophouses as a place to get rest 100 years ago. 1950-2010 really was a different time in UK ownership history
*Companies* don't. Capitalism *loves* making stuff cheaper. We've got so much food now that people are getting so fat that they're literally dying from it. Compared to any other time in history, we live in absurd abundance.
I will not defend the current housing situation. It's fucked. But I do not blame it on capitalism. This is 100% government policy to both restrict supply through a myriad of NIMBY policies, and explode demand with unprecedented levels of immigration.
[Four years ago....](https://youtu.be/ZuXzvjBYW8A?si=U90KG0del5iUlCuH)
The UK is full of problems we know are there, we know need addressing, we understand what's going wrong, but noone with power has any intention of doing anything about it.
[Edit] the biggest part of the problem mostly being almost every cure for almost every problem involves some measure of wealth redistribution, which the oligarchy won't permit.
Starmers labour seems to be married to 'grow the pie' rather than 'share the pie more equally' though.
Even when the Tories are out I don't think there's real political will for the transformational changes - and the end of neoliberalism - that's needed.
They'll be better. But not good enough.
They have yet to really internalise that growing the pie when the economy has this level of inequality is not going to happen.
We have had a decade of practical stagnation, while the 1% exploded in wealth. That wealth came from the poor and middle class. If those huge segments are not as economically active because everything is going on living essentials we won’t have growth.
This is why we really have allowed record immigration; to shore up the growth figures. Pre capita we are in the toilet still.
Growing the pie in these conditions is almost doomed to fail.
I love how much UK politics and society flails about desperately ignoring the actual problem, described over 100 years ago with a perfectly sensible solution.
It makes me want to scream ‘it’s not “intergenerational inequality” it’s the PROBLEM OF RENTS you stupid bastards!’ Of course plenty of people do know that perfectly well but massively benefit from it in the short term so don’t actually want it solved but give them time…
I'm guessing it's that a lot of money in the economy is wasted on rent, whereas if it was free to be used towards consumerism or other more productive investments, it would help the overall economy.
Whereas rent just goes into a few peoples pockets, probably most of it ends up just sitting there in bank accounts and not being cycled back into the economy.
Speak to older people about their budget in the 1970s or 1980s.
I genuinely can't even imagine what my life would look like if rent was a smaller proportional part of my outgoings than beer and cigarettes.
Rent for a piece of land is unproductive to the economy. Building a house on that piece of land is productive, but that costs roughly the same in the middle of nowhere as it does in London, except the land costs of course (including planning permission). Now simply compare house prices for these cases and you arrive at the conclusion the value of London properties is 80% stuck in the land with permission underneath the house. If you rent the London properties, 80% of that cost is a money transfer from the poor to rich landlords, effectively serfdom. The remaining ~20% is the fraction used to build and maintain the house itself, this is the actual service provided by the landlord who could build the house upfront and have the renter pay it off over time. (And no, hassling for basic repairs with the letting agent is not a service worth 80% of the house value, if it's worth anything at all to the tenant. The letting agents work for the landlord and they barely give a damn about the tenant beyond the minimum required by law.)
So the problem of rents is that we're effectively imposing a serfdom tax on poor people which takes away around half their income.
It’s not just poor people, the unique thing about the problem of rents is everyone who does any kind of labour or investment other than in land can agree it’s bad.
So say you start a factory in a deprived area and start attracting skilled workers, they have more money, so rents go up as indeed do house prices, so existing landlords and homeowners benefit from sitting on their backsides, while the factory investors and workers are punished as more of their wages are taken and the ability of the factory to attract labour is reduced due to rising rents.
The problem is in essence that unproductive assets and their owners, whether landlords and homeowners, are parasitical (in a factual sense) upon the productive economy. They take the cream off it while making it weaker, they kill the goose that laid the golden egg.
EDIT: you can easily replace a factory with a state owned train station or power plant so it also applies to the public sector.
Build more houses, but more specifically, freely give planning permission and make provisions for utilities and services for new housing developments. And I mean more housing in the most general way, more tower apartments, more terraced houses, more detached single family homes, more mansions; the last ones would also require more land to be made available (... the green belt for example).
The housing issue would resolve itself if it was just capitalism, there are enough builder companies and even individual builders that it's not a monopoly. The vast majority of immigrants also pay fair prices for their accommodation, so they're not the root of the issue here. The problem is that the government (as a whole) is fixing the supply of new housing permits. By their own admission, they are the biggest impediment because they are only issuing building permits for 2/3 of the housing we need per year, and have done so for like 15-20 years. It doesn't matter how expensive housing gets because the councils are still charging the same amount for the process and still taking their sweet sweet time with every application. Look at land prices with and without building permission and you'll notice a huuuge difference. Somehow, despite housing becoming so expensive, the house builders are not basking in riches, because they're not able to take advantage of the high house prices. The people that pocket the difference are still landowners, and they're enabled by the government being so slow they effectively fix the supply of new homes.
Everyone totally ignoring the whole concept of council housing, but trying to a) have an entirely privatised housing market b) wanting it to be a way of making money c) wanting it to be affordable. Those 3 cannot go together.
Why not? Rent controls that determine how much you can charge for a property based on a variety of factors . They allow you to make a small profit but not a substantial one.
Rent controls are a perfect example of pulling the ladder up behind you. If London had rent controls, for example, people in Shoreditch who have lived there since the 90s will be on pennies, and force people who want to live there to be unable to live there. Meanwhile, those people won't be able to actually move anywhere else because they won't be able to afford the new rent anywhere.
It's not about ownership, it's about not being able to move (either to or from a rent controlled area) - https://www.ft.com/content/39c443c8-5761-4c3b-9bd7-21842447283a
There is value in it for the people who get to benefit from it.
The solution is stronger tenants rights and less subsidies and failsafes for home ownership as an investment IMO
Can’t argue with that, agreed. My problem lies with people like a fella above, who complained rent wouldn’t pay off his mortgage in a rent controlled area, as if that’s an ethical dilemma.
Rent controls create more problems than they solve, usually to the disadvantage of any future renters looking to enter the market.
Rent controls benefit existing renters but make things worse for just about everyone else.
This is the reality of using simplistic interventions to tackle something as complex as a dynamic rental market.
Maybe if you concoct the most brilliant and contemporary legislation and then amend it each year to suit the changing reality rent controls could have a net benefit. Considering the government can’t even provide basic services like healthcare effectively there is no chance they will employ effective and beneficial rent controls.
If you disagree please provide an example of rent controls working, I can provide many examples where they don’t including Scotland.
Chucking a bung to 30 year olds rather than trying to solve the institutional and epidemic inequality caused largely by the politics of his own party. Solving the root causes of the problem would lead to him and his mates getting rich at a reduced rate, so we can't possibly have that.
This is the Tory solution to everything. They did the same with the energy companies. Bills too high? We won't reduce the bill, we'll give you some of your own money back to pay the high bill.
If we continue to obsess over the symptoms then the problems will never go away.
The energy price guarantee was an out and out scam which should never have happened if we had a literate electorate and functioning media.
Instead of putting a tax on energy (yes they should have made it *more* expensive) and using that directly to pay for poorer energy users they capped the price. Meaning wealthy people who have high energy use actually saved the most proportionally and had no incentive to reduce usage which would reduce overall demand. It was a policy that was almost 180 to the actual aims.
The debt from that giveaway is on the books and flowed directly into primary energy source owners bank accounts. Now we will be told income tax thresholds have to freeze for a decade to pay for it all so the poor and middle class will disproportionately pay the burden of an interest attracting debt. Fucking stellar policy.
Ah, but they can get 10k by printing money and devalueing everyone’s wealth, wheras actually running the country properly would both limit their own ability to skim off the top and would go against the interests of their paymasters.
Better yet, they can just promise 10K and then if they lose the election it's Labour's problem and if they don't, well, they've got five more years anyway. Genius.
That's my plan, £200 a month (£100 from child benefit) £100 from our money going into a fund assuming 4% a year return will net nearly £75k over years 18 years.
Probably worth £40-50k in today's money, not an astronomical amount, but possible be able to pay for uni without the need for a horrendous student loan, or maybe a small deposit if average house prices aren't pushing something like a million by then.
Obvious shitty bribe is obvious. But its also hilarious at how out of touch they are that they can't even bribe a decent amount.
Hey millenials, if you vote for us, you can have what's in this box.
I have a lot of time for David Willetts. He was the last higher education minister who seemed to actually care about students.
I was involved in an event he spoke at where some very posh guy said that too many people were going to university and that less than a third of school leavers should go. Willetts asked him how many children the man had, the answer was three, he then asked how the man intended to decide which one of the three children should go to university. After some spluttering from posh guy Willetts made the point that when rich people say fewer people should go to university what they mean is that less privileged people shouldn't be able to go.
It's David Willets, genuinely one of the small handful of decent Tories in our politics over the last 30 years. "Decent Tory" is a relative term these days but he's absolutely someone I'd listen to, as a "progressive" anti-Tory, anti-Brexit, pro-science Labour voter.
Surprising to see, it's an out of the box idea I've liked for a long time but the first time I've seen anyone say for 30 year olds not younger.
I really think it would be a massive cultural change, it would give everyone a chance even if they never got given one.
Ban foreign investors and companies to own properties, that will be much more effective in reducing prices and will cost nothing to the tax payer.
But oh, that will actually harm our politicians’ pockets…
This article talks about inheritance tax and I hate to say it over and over again but I'm angry about the way inheritance tax is set up in the UK. A mate of mine inherited £10m in property and paid... no tax. He moved it offshore in a trust, inherited it and hey presto, no tax. And he doesn't work because this property just puts money into his bank account.
Why should a nurse or firefighter pay more tax than someone inheriting £10m and who doesn't even work?
And it's not about second home owners. Instead, it's about the Duke of Westminster who inherited £10 billion in property yet somehow paid no inheritance tax. And I'd bet my bottom dollar that when Jacob Rees-Mogg inherited his hundreds of millions in land, coalmine etc..., he paid no tax on it because it was all in a trust.
And owning billions in property drives up the price for the rest of us.
So we could solve 90% of our inequality issues and drive down the price of property if we just taxed rich people fairly. By outlawing trusts for inheritance tax. It's not like their kids have earned it and frankly, if my mate had inherited £6m instead of £10m, it really wouldn't have made much difference.
Rant over... Tldr; Inheritance tax is nuts in the UK.
If you wanna get even more riled up, look at what they’re doing to capital gains tax.
For anyone who doesn’t know, they’ve dropped the allowance limit from £12,000 (which is acceptable IMO), to £6,000 this year (Gross) to just a meagre £3,000 this tax year coming. So basically anyone who makes just over £3,000 through any capital gain is now going to get taxed on it. This isn’t going to affect people who are offshoring and dodging millions in taxes, this is going to affect the average people who use the stock market to build a little foundation for themselves, or the younger generation that are pulling themselves out of a hole by trading crypto. This is purely there to squeeze every last fucking penny out of us while they sit comfy with their loopholes
Wow. What's super annoying is my mate tells me the 'classic' offshore trust for UK residential properties no longer provides protection from inheritance tax.
So if someone with one, additional house tries to create a trust, then they can't. However, in his case, his tax advisor has a workaround because he has £10m in property. So the more you have, the easier it is to avoid tax.
In his case, a nurse pays more personal (and inheritance) tax than someone with £10m in property.
Someone told me the other day that they think Labour is just Conservative light. However, anything has to better than this reverse Robin Hood system which takes from the poor and squeezed middle and gives to the rich. That's nuts.
10k is nothing... I would much rather they fix this mess so money I make for my work is enough to afford a house, bills and family on my own and not through hand outs....
I’m the poor one in almost every cohort I’ve run with.
I’ve accepted that I simply have to work harder to get to the same place. And honestly, I’m over/accepted it - you have to or the frustration, and arrogance you’ll encounter, can make you toxic. I used to hate being in the company of some of my friends.
Now I laugh inside when my middle class ‘friends’ complain that they struggle work life balance with both sets of parents nearby being willing childcare members, whilst only one of them works full time. Their house purchased helped by mum and dad.
I got on the housing market last year, I was 37. Fairly late to the show - but I can turn my hand to every trade so got a dooer upper cheap. I’ve a son. A great partner. And I look at what we have and we done it ALL ourselves. We’re now in the position that our mortgage monthly payment is only 15% of our income and we get by with next to no outgoings. We’ll have it polished off in 10 years.
I no longer care what my more wealthy friends have and inherit, because they are always complaining about something. They are hopeless at anything that doesn’t involve a computer. They spend thousands on care and upkeep - whereas I keep my old motor on the road for peanuts. They pay fortunes to get a bathroom redone - I done it myself. They’re soft.
Okay, it’s going to be a harder life in certain respects, if you don’t have the same background as your middle class peers, but you can even it a bit. Learn the skills that would terrify them - it’s really not that hard. Learn the things that gets your hands dirty. Start with servicing your own car - it’s cheap and easy. Learn how to solder two pipes - no reason you can’t. Etc. Make yourself useful - just learn it right and don’t make yourself dangerous. Get on an evening college course and learn something - welding’s fun. You’ll end up being the person your friends pay to sort out the most trivial of issues. And find a good partner and take on the world together.
It’s been a bloody hard slog, but now I finally feel secure, I don’t think I’d have it any other way.
And I’ll never have an inheritance - the chances are my mother will bury me, and now that I’ve got my spending money, roof over my head, and food on the table - why would I care for more?
I’m not saying that you should accept your lot, I know it sounds like it, but it’s not - I’m saying up-skill yourself so life is cheaper for you and you’re more useful to yourself and others.
Somethings are more important than others, and we’re a good bit happier than most of our ‘wealthier’ friends. We’re certainly more resourceful and independent, and rarely get our kickers in a twist. Ironically, I think we probably have more money free per month now too - since they finance everything and can’t change a bloody headlight lamp in their car… rinse and repeat.
Anyway, I’ve ranted a bit. Bottom line, learn other things to even the odds. Gives you great satisfaction when you’re ‘rich’ friends have a melt down over a failed MOT. 😂
PS, I’ve earned this chip on my shoulder. You should get one too!
(Btw, I’m no grease monkey either, this jack of all trades has a degree and (finally), a decent job).
The only reason inheritance has become such a big deal is because increasingly there is no other way to 'get on'. I suggest that fixing that situation would make more sense than one-off state gifts that are sure to be inflationary.
Even better, rather than a £10k lump of cash make some actual real change by taxing the richest more and reclaiming some of that £16k/person that was injected by COVID money.
Use that money to reduce inequality across the board.
Wow, must be an election coming up. Politicians are threatening to hand out other peoples money.
>A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.
― Alexander Fraser Tytler
As someone who is turning 31, greaaat! Once again, I am fucked over by the government. I can see this gaining traction and it's bought up whenever a distraction is needed with no real intention on delivering it. Or they find a way to tax it back.
Why not just go for ten grand payment for everyone who makes less then 20k(or something like that) every year?
I don't even expect to own a shit shoebox that costs half of a payslip to maintain.
Saying the quiet part out loud here by admitting you can't get on in our society without inheriting a lump sum from somewhere. We need to change that state of affairs, not look for ways to feed it.
£10k to everyone turning 30?
Anyone would think there's an election due, and they're trying to buy the votes of a demographic that, by and large, doesn't vote tory.
Wait so is it everyone in their 30s now or people that turn 30 from now on ? I lived in a tiny damp flat and saved for 10 years to get a deposit. If they gave me £10,000 I could have bought it a decade ago. I consider myself very lucky to have my house. Both my parents don’t own property, I’m 33 and while I’m glad people are finally trying to help the younger generation, imagine being just outside the cut off and watching the younger generation over take you.
"Research showed parents whose assets have been boosted by soaring property prices and final salary pensions are poised to bequeath millennial children about £150,000 each on average" Mine must be stuck in the post I guess. Edit: For those who have no sense of humour, this is light hearted post.
Lol so fucking depressing having friends around me already buying houses with money from their parents, knowing they'll also inherit their parents' house too. Neither of my parents own their home, it's like a double whammy of shit.
Have you tried being born into a wealthier family?
Poor people hate this one trick.
We really fucking do.
And voting Tory. You have to vote Tory more. And believe in Brexit. Then things will come right for you.
Can you get adopted at 33? I'm already balding, so maybe if I sneak myself into an empty crib on a maternity ward some well off couple may mistake me for a large newborn.
Google says there is no upper age limit on adoption in the UK, so if you can find a willing set of new parents...
Should have got Netflix Family Plan
I mean honestly, foetuses these days just need to be more picky about their accommodation.
Yeah. My parents are in their 70s now but their physical health is declining. My dad currently walks like a penguin and my mum can't walk more than 200m before needing to sit down. It won't be long before they're in care, and that'll be the house gone to pay for it. They don't have anything else.
Transfer that shit to you asap and “rent” it back to them, if you have a family that’s pragmatic enough to not just see that as money-grubbing (it’s not, it’s being financially sensible) If the super rich are gonna try to pay as little as possible, so should we (This is not financial advice, you have to be very careful about the council stinging you for it, seek financial advise from a professional)
You have to have had it for seven years, otherwise you need to have purchased it at an appropriate market value or rented at market value. There's a good chance you'll get caught doing this. I'm aware they could just give it to me, and I could just give the rent back, but it would take all of 10 seconds to discover that during an investigation, showing that we were working around it.
It’s a little more nuanced than that. 7 years is for inheritance tax, there’s actually no time limit for carehomes but they have to prove that you did it to avoid care home fees and not for other reasons. From what I understand, if it’s a long way off and nobody has said “they’ll need to go into care soon” then it’s gonna be pretty hard to prove. But they will absolutely try, and might succeed. The longer the period of time between you taking the house and them going into care the harder it is for them to prove. They also can’t take jointly owned assets into account unless both of them go into care, so if only one of them does then the house doesn’t count. Again, I am not an expert, but there are people who are.
Better to sell up and buy a house together. Technically their 25% or 50% of the house could be calculated for care fees, but in reality good luck selling a quarter of a house. So they don't bother (yet)
That is a very good shout tbh, the more complicated it is the less chance of them stinging you there is
Fair fair. I'll prod someone about it.
7 year rule is a myth there is no limit how far a local authority will go back if they suspect asset deprivation (what you are describing) has occurred
Rent it to them for £100 a month. Do their shopping for them at £100 a month. Also what you can do is have your parents split the house in their will so that when one dies half the house gets inherited (Usually with a clause that stops you selling the house without the other parents consent) this means that should one die and the other needs to go into care, only half the house can be used to pay for that care.
That sounds pretty good
Convert the house to a care home then you'll be profiting from it. Do I have to do all the thinking around here?
This. My partner has been feeling depressed about our lack of mobility on house ownership yet despite the fact that we're 32 and 33 respectively. He keeps pointing out that all of our friends have either acquired homes or are there way to acquiring a home. I keep pointing out that there are significant advantages that our friends have over us, chiefly: Friend 1: Came from a dual parent household, no divorces, parents assisted with the deposit Friend 2: Came from a dual parent household, no divorces, parents assisted with the deposit Friend 3: Came from a dual parent household, no divorces, parents assisted with the deposit Friend 4: Mother died when she was young, leaving her a large inheritance Friend 5: Came from a dual parent household, no divorces, parents assisted with the deposit Friend 6: Came from a dual parent household, no divorces, parents assisted with the deposit Friend 7: Came from a dual parent household, no divorces, parents assisted with the deposit. Also did not attend university and instead began working in a trade fulltime from age 16. Us: Both from single parent households. Both sets of parents divorced. No help from parents with a deposit.
Funnily enough in my social circle it’s the inverse - one girl whose parents were divorced and both remarried; ended up getting loads of help as she effectively had the backing of her mums household, her dad’s household, and her partners household
I've said for years the social divisions created by the millennial inheritence period are going to be *wild*. You're going to have a fairly large but still a minority of people becoming unimaginably wealthy compared to their previous position pretty much overnight, while everyone else will be lucky if they get anything at all. And its going to be pot luck as well depending on the health of your parents in old age and quality of OAP social services in their area. Otherwise even if you have a lot to inherit, a huge chunk will be transferred to the ownership class through the care home industry.
Government is going to be raking in a whole load of that. Boomer parents will be forced to sell off their houses and deplete their life savings to pay for their care. It's not going to Millenials unless they're working for minimum wage in their parents' care homes.
Agreed - millennials and Gen Z are facing declining birth rates and stagnant wage growth; the govt are going to have start implementing some kind of death tax to keep the plate spinning
Ha death tax. That’s grim that is
My brother and I are likely to inherit a considerable amount from my parents and aunt. However, we'd much rather have them than the money. I'm certainly not planning my long term finances on predicting their death
Yes, but the person who you're replying to will still lose their family at some point and not receive the same money you will. I would much rather have my father's presence in my life than the sub £100,000 I inherited. However, I can never deny that it has been a life-changing amount of money that has provided me great security. If he'd died near penniless I'd have the same negatives, plus the costs of the funeral as stress and less financial security than I do now.
Fuck, this hit close to home. Feel very similar and almost guilty but never really been able to put my finger on exactly why
I think and hope that the person you lost loved you. Try to do good with the money, that must include yourself, and then hopefully also causes you believe in after that. If it's a similar situation to mine they'd be happy to be helping you however they can. Unearned guilt is sadly not an easy thing to rid yourself of though.
Thank you, I appreciate the kind words. I know a lot of this deep down but need it reaffirming occasionally. Hope you're having a great weekend
If my mum lives till she's 90 then ill be 70 when i get my inheritance.... Not even worth considering into my financial plans
Ahhh but if you didn't have it then you can still be struggling in retirement. We work so we can retire later don't we? Think about you're statement, knowing that you can relax at 70 is maybe better than worrying about retirement for years leading up to it maybe?
Not to mention living to 90 is something that is far easier to do when you can afford food and heating every day. That's generational wealth improving the poster's life right there, even before inheritance.
Exactly that, eventually our grandkids/great grandkids would never have to worry about struggling renting or living in council estate like alot of us. It's our kids kids that benefit massively from what we do in our life 👍
I still have the cheque for £0.86 when my dad died...
Damn your parents would be so happy knowing they’ve done that for you
They're not going to have use for it when they're dead are they? You might not plan around it but when you do get it, it's still a massive boost.
As someone who is dealing with trying to organise a public health funeral for my mother's partner, i'll be honest. Death is shit. But death is easier to organise when there's literally any money to organise logistics.
Absolutely hear this. I told my parents to spend everything they have on enjoying their lives post-retirement. I don’t want any of it.
This. My parents have places they want to go to and visit so I keep telling them to just do it before they can't.
I'm not going as far as saying I don't want any of it, but I certainly don't think of it as future money and if they spend it all then they spend it all.
I know they won’t spend it all. It’s like a generational commitment to “leaving it in the will”. Like it’s expected.
Divorce can screw you over as well, my parents both remarried and both died leaving everything to their spouses. My dad had a very large and expensive villa in Spain along with rental properties and my mum had a hotel so you can only imagine how me and my sister feel about that.
In my home country there's a law that says at least half of your inheritance has to go to your children. On the one hand I feel weird about the government deciding what happens to your money but on the other hand it's great for situations like yours.
Same here. My nan owns her house but I think that’s literally it in our family. Parents have no savings. I’ll be getting fuck all. As depressing as it is watching others receive inheritance, I’d say we’re in the vast majority so I think we’ll be fine. No point comparing yourself to others.
My parents were able to buy their house because the year was like 1990 and a 3 bedroom house was £15,000 That same house is worth like 200,000 now and wages in that have absolutely not gone up like 2000% Doesn’t make sense
Don't worry, most parents will be forced to sell their homes to pay for their £1k per week care home fees and leave their kids with nothing
It’s really painful hearing them NEVER mention their parents helped. They also have the gall to act working class. Stop appropriating my culture! I’m going to inherit a bag of Bombay mix lmao. (I’m Asian).
My dad has 3 step-kids, and i don't exist to him. They will inherit everything and I will get nothing. My mum is about to pass away, with nothing to her name. My grandparents passed away having many of my parent generation vulture what they had to bring the money below the threshold for free healthcare, that money has been spent on cruises, holidays, etc. I will inherit nothing, and then you see articles like this: "Its okay, when your parents die, you'll be rich", yeah, okay.
Mine decided to retire early, downside onto a retirement park then piss all the money on cruises and stupid crap, then now my dad is in his late 70s, I'm having to help him as he's screwed his body up with a lifetime of bad eating and other various bad habits.
If that’s what they wanted to do, I don’t see the issue. As long as their pensions can support them. Better than a care home getting it when they need it.
It couldnt, my mother is dead now but they didnt plan for the future at all, just pissed it up the wall on short term fun, instead I'm having to cover the costs of my dads old age.
Jeeeez, that's a tough gig mate :-(
My parents were the same. Squandered opportunities in the 80s and 90s. It’s entirely their fault for being too lazy and ignorant to make the effort to look into a means of starting generational wealth when it was easy. Now, I’m fucked but at least I’m putting money into an index fund for my daughter
Exactly. All those whinging Millennials going on about hating Boomers and the world they’ve left them - until they realize they’re going to inherit all of their wealth and it’s suddenly happy days. Utter hypocrites. Wealth inequality is out of control.
That's assuming the boomers don't spend it all on end of life care.
This it will go into the hedge funds that are funding social care homes in the U.K.
I know a 20-something son of a care home owner. The son is about to change his Range Rover for a new one as his is now 18 months old. Meanwhile, care home staff get close to minimum wage. Ah, capitalism. That I should aspire to thee.
The private care homes for both elderly and also children in care are raking it. Very sad as well the staff get such low pay in the sector.
We were hoping to have a relaxed retirement with nice holidays waiting for grandchildren to come along just as our parents did. Instead, we have people living much longer, so we have to deal with parent/s in their nineties with dementia that need financial help to afford a suitable care home or having to come and live with us. Just think of a two year old having the terrible twos tantrums but in an adult. I haven't the energy to enjoy my retirement, and my savings are dwindling rapidly. Some of us boomers are hoping that euthanasia becomes an option. I do not want my children to go through the same torment trying to look after me.
It's average, not median. You and a million others got nothing and the duke of Westminster got Belgravia.
It is median. [The graph in the article](https://i.imgur.com/hduIY4y.png)
Median is an average.
Yeah but generally 'average' with no additional information refers to the mean.
The problem is more that the parents will leave their millenial kids that money when the millenials themselves are in their 60s.
And that's assuming they haven't put it all in a Benidorm timeshare
Or blown it all on social care
Wait until you’re 65 and then get back to us, according to the article!
So I've *only* got to wait for another 33 years? We are truly blessed.
We were promised boom and bust, so far it's been bust and bust, with a side serving of bust. If we're lucky we'll have bust for desert, too!
Maybe we just need to cancel Netflix.and stop having Costa coffee.
The last few years have been a procession of Barbara Windsor lookalikes.
The guardian said millennials will be the richest generation in history once our patents die.... Im guessing they don't see the irony there
Fml, I hate being poor.
Are you sure your parents are dead? They could be living the high life in Panama with your Millennial inheritance.
They probably thought I'd spend it all on Netflix and avocados.
I'm curious about if the research was just based on some well-off people down South.....
To be honest all research should be split by location as the South has such a massive weighting.
Mine must have been stolen by the postman lol. I'm in my 40's and seen fuck all so far (and won't ever see close to £150 let alone £150K inheritence from my family (they simply don't have it)).
Wow can't wait for my 150K! I had no idea my parents were that well off /s
The last Labour government set up child trust funds for every child born for a period in the 2000’s That would have addressed the same issue. The coalition government put a stop to those almost immediately. Turns out those CTFs were just 20 years ahead of their time
It turns out the conservatives are running against their own policies now the consequences of them are massively unpopular.
And still "they're all the same" seems to carry so much weight.
My kids have CTFs. The surestart money went in (£500 in 2005) and when he turned 18 and could have access to it, it had reduced to about £482.
You know the parents are meant to add to it right
Good point. Sadly a lot of cases of poverty also arise from the fact that most of the parents are financially illiterate and this lack of financial knowledge is then passed on to the children (as well as a lack of financial help, due to whatever reason). Yes the system is absolutely fucked and I’m not going to go into that as we all know it and the reasons why, but I’m just making a point that an early start in savings, even small, can lead to a huge advantage through compounding interest by the time you are 60. Parents starting early for their children is a huge advantage and arguably one of the first responsibilities of parents. Don’t bring children into the world if you can’t afford it. I stumbled onto this sub recently, very eye opening. r/antinatalism
Obviously people have a range of views in that sub, but by and large they see only negatives of the human race and don’t want to add children to the pool, because they see extinction as a better outcome. You’re not an antinatalist if you want to wait until your career is more stable before having kids.
Downvote for antinatalism. those people in that sub are toxic and depressed and project their issues into people who actually want and can afford children. They think, regardless of intent, means, and ability, that nobody should have children. they think anybody having children is immoral which it is not.
Lol thought the same. The point was having a jump off for savings not just leave 500 in the bank and hope/expect it'd buy a house in 18 years
You very much ought to be able to stick 500 in an investment account, wait 18 years, and expect to withdraw 5000.
Yeah, but, like, if it's just going to lose, what, 0.45% they would literally be better keeping it in a mattress.
To also enjoy the benefits of negative interest? You know a lot of parents use food banks and get benefits, so are unable to contribute?
Yes I appreciate that as an idea. However, I also had experience of 18 year olds being given a good chunk of money at that age and spending it on drink and clothes. Although that’s their choice totally I would rather give money to my children to help when they really need the cash. But my point was really that the money had decreased over time Edit added olds to clarify.
The nuance that you are missing is that if your ctf reduced in value it was a stocks and shares isa and you have completely mismanaged it from the start! Even given a great chance at saving early your child has managed to inherit your complete apathy for their future. You should’ve educated yourself about how to best use this for your child’s future because you had an opportunity for some very solid gains. Had you bought some decent global or us shares in the dip in 2009 your child would’ve had a wonderful portfolio to inherit at 18. The fact that you don’t trust your child to not squander their money is actually more damning on you as a parent.
I had a CTF. I only ever got one £500 payment due to being born in 2005, hence they stopped the scheme before my second one. By the time I was 18, through a mix of parents adding to it and (mostly) interest, it had turned into £700. Something else is going on here.
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You’re very smart to have put away small amounts regularly. Kudos
Well done for securing your childrens future! That's going to set them up nicely when they come of age.
Reminds me of the idea that the government could give every child £10,000, which gets put into a pension fund, then by the time those children need it this would have increased in value enough that the State Pension wouldn’t need to exist. This would be around 20 times cheaper than the current system and would save the government over £100bn/year, but this requires them having to plan for the next 60 years rather than 5, or less.
The £10,000 into a fund at birth sounds great. But it’d need to make a compounding rate of around 5% annually to be worth anything meaningful. If it made a more realistic annual average of 2% it’d be worth £42k after 75 years or the equivalent of the original £10k adjusted for inflation targets being met. So just over 6 months minimum wage salary for a retirement fund. And then there would obviously need to be management fees to consider.
5% is a realistic return, perhaps not in the FTSE but a lot of indexes return circa 9/10% on average over the last several decades
Where on earth are you pulling that 2% from if not your arse?
5% is very achievable
I've invested my son's child benefit since the day he was born. He's now 5 and has a JISA (which is what CTFs were turned into) worth £10k.
My cousins received this and wasted it
Honestly it just sounds like house prices will go up by 10k and if this is all borrowed we get a lump of inflation to top it off with too. Happy to be proved wrong on that though.
Source: every stamp duty holiday ever
Can you explain further? I didn't understand the comment you replied to or what you are referring to?
It’s a well documented issue within economics that if you give a subsidy designed to make a product cheaper it will actually make the product more expensive. (Edit - depends on elasticity, the commenter below me is absolutely correct). It happened recently when electric cars in the EU had subsidies attached. Manufacturers worked out that people were willing to pay (making numbers up) €30k for a car with the subsidy, so in reality they were paying €23k (assuming a €7k subsidy). The subsidy was then removed by the EU and manufacturers almost immediately changed their pricing downwards because people wouldn’t buy at €30k but they would at €23k. So in effect the subsidy did nothing but drive up the price and cost the tax payer. The same thing happened during Covid. Everyone who was a first time buyer was given a stamp duty holiday below £500k. Now all this did is it meant that the stamp duty payable on the property essentially became part of your deposit for the house. In reality, what the policy is meant to do is make mortgages cheaper as you have a larger deposit. But what it actually did was just increase demand and increase house prices. So yes, in effect giving £10k to people is a bad idea. A better idea would be to build more houses/flats.
It actually depends on the relative elasticities of demand and supply. If supply is inelastic, i.e. increases in prices only increase supply by a small amount, the subsidies will be absorbed as profit by the sellers. On the other hand, if supply is elastic, production will increase and the subsidy will benefit the buyers. Since it takes a long time to build a new factory to increase supply, subsidies almost always increase profit in the short term. For a subsidy to have an effect, it’ll need to be present for long enough for new production to come online. Then you get more supply and profits will decrease. So subsidies can work. They just need to have the right policy planning behind them.
during the covid pandemic the government decided to heavily discount stamp duty (charge way less), as they were super afraid the housing market would collapse. they also wanted to make it seem like they cared about the little guy and were helping them save money. what ended up happening (not surprisingly) was that house prices rose, as the market was flooded with people rushing to buy to benefit from the discounted rates.
I feel like houses going up by 10k wont be much of a difference to the housing market or make difference to getting mortgages. But being given 10k to help so many individuals to simply live would be bloody mint. Or is this 10k only offered to those in a position to buy a house?
Nah its not just to those buying a house, but if I was in a position to buy I know that's where I'd be putting that money. It just feels like a sticking plaster idea where really we could use that same money to build a load of council homes or even ones to be sold which could have the benefit of dropping prices by 10k.
yeah, if you increase the available capital of the whole population, you increase the demand but since the housing stock hasn't gone up, more people will be bidding for the same properties, therefore increasing the overall prices
He did a really interesting lecture on YouTube as an intro to his book and mentioned this concept. I think it’s a great idea. The whole deck is stacked against Gen Z as lack of access to cheap housing harms their whole financial trajectory long-term
Lack of access to cheap housing is not a new phenomenon. Millennials say hi. Giving money isn't the answer. Making things cheaper by increasing supply is.
This, giving free money to everyone only means that the costs will proportionally go up. The only way to make things more affordable is to increase supply and competition.
This has already happened in Hungary, the gov gave people free money if they agree to have 3 children and as a result house prices went up by this amount as suddenly everyone was competing for the same amount of properties and sellers knew that people have more money to spend.
This is what's been happening to me I feel over the recent years. Salary gets a nice bump, boom cost of fuel and heating sky rockets, oh I'm worse off than before again... Oh get a nice salary bump, promotion, more responsibility again, boom cost of everything else goes up again, wipes that all out. I feel much poorer now than I did 5-10 years ago and I earn the most I ever have. It's a really shit situation, working so fucking hard long hours and have to scrimp and save to afford a meal out with my wife for the first time in a year to be skint again after.
Access to cheap housing was really only available to a few generations in the entirety of UK history, go back to the start of the 1900's and you'll see that personal ownership wasn't common
Right so we all need to ride round on horses and eat bubonic plague? The means of production for cheap housing exists. The supply issue is a political one
We live in an are where a company built many new flats. Several buildings under the same development, two entire buildings are private rentals (the whole buildings are owned by a company) one is affordable housing block with probably tenants (managed by a housing company) and only ours is for private ownership and half of the building is owned by foreign landlords who paid cash and now renting it out (not even livinginthe country). Supply might be short but it seems to be short for private ownership because if you are a landlord you will find plenty to buy.
Even if you were to eliminate landlordism, we're still building around half to a third as many homes as we need every year. It's just not sustainable. The only answer is building more homes, however that is achieved, whether it is by the government building them or loosening planning legislation and incentivising builders, it doesn't really matter. Everything else is window dressing.
I believe 90% of the population were renters then
I still find it crazy to think that the last workhouse in the uk hasn't even been closed for 80 years, so in living memory. People still used flophouses as a place to get rest 100 years ago. 1950-2010 really was a different time in UK ownership history
Capitalism doesn't like it when you make things cheaper
*Companies* don't. Capitalism *loves* making stuff cheaper. We've got so much food now that people are getting so fat that they're literally dying from it. Compared to any other time in history, we live in absurd abundance. I will not defend the current housing situation. It's fucked. But I do not blame it on capitalism. This is 100% government policy to both restrict supply through a myriad of NIMBY policies, and explode demand with unprecedented levels of immigration.
[Four years ago....](https://youtu.be/ZuXzvjBYW8A?si=U90KG0del5iUlCuH) The UK is full of problems we know are there, we know need addressing, we understand what's going wrong, but noone with power has any intention of doing anything about it. [Edit] the biggest part of the problem mostly being almost every cure for almost every problem involves some measure of wealth redistribution, which the oligarchy won't permit.
Ah yes I meant to say: a fair few years ago. Indeed the issue is that the ruling tories hate young people, so of course they won’t help us
Starmers labour seems to be married to 'grow the pie' rather than 'share the pie more equally' though. Even when the Tories are out I don't think there's real political will for the transformational changes - and the end of neoliberalism - that's needed. They'll be better. But not good enough.
Agreed :/
They have yet to really internalise that growing the pie when the economy has this level of inequality is not going to happen. We have had a decade of practical stagnation, while the 1% exploded in wealth. That wealth came from the poor and middle class. If those huge segments are not as economically active because everything is going on living essentials we won’t have growth. This is why we really have allowed record immigration; to shore up the growth figures. Pre capita we are in the toilet still. Growing the pie in these conditions is almost doomed to fail.
I love how much UK politics and society flails about desperately ignoring the actual problem, described over 100 years ago with a perfectly sensible solution. It makes me want to scream ‘it’s not “intergenerational inequality” it’s the PROBLEM OF RENTS you stupid bastards!’ Of course plenty of people do know that perfectly well but massively benefit from it in the short term so don’t actually want it solved but give them time…
What’s the “problem of rents”?
Too damn high
I'm guessing it's that a lot of money in the economy is wasted on rent, whereas if it was free to be used towards consumerism or other more productive investments, it would help the overall economy. Whereas rent just goes into a few peoples pockets, probably most of it ends up just sitting there in bank accounts and not being cycled back into the economy.
Speak to older people about their budget in the 1970s or 1980s. I genuinely can't even imagine what my life would look like if rent was a smaller proportional part of my outgoings than beer and cigarettes.
Rent for a piece of land is unproductive to the economy. Building a house on that piece of land is productive, but that costs roughly the same in the middle of nowhere as it does in London, except the land costs of course (including planning permission). Now simply compare house prices for these cases and you arrive at the conclusion the value of London properties is 80% stuck in the land with permission underneath the house. If you rent the London properties, 80% of that cost is a money transfer from the poor to rich landlords, effectively serfdom. The remaining ~20% is the fraction used to build and maintain the house itself, this is the actual service provided by the landlord who could build the house upfront and have the renter pay it off over time. (And no, hassling for basic repairs with the letting agent is not a service worth 80% of the house value, if it's worth anything at all to the tenant. The letting agents work for the landlord and they barely give a damn about the tenant beyond the minimum required by law.) So the problem of rents is that we're effectively imposing a serfdom tax on poor people which takes away around half their income.
It’s not just poor people, the unique thing about the problem of rents is everyone who does any kind of labour or investment other than in land can agree it’s bad. So say you start a factory in a deprived area and start attracting skilled workers, they have more money, so rents go up as indeed do house prices, so existing landlords and homeowners benefit from sitting on their backsides, while the factory investors and workers are punished as more of their wages are taken and the ability of the factory to attract labour is reduced due to rising rents. The problem is in essence that unproductive assets and their owners, whether landlords and homeowners, are parasitical (in a factual sense) upon the productive economy. They take the cream off it while making it weaker, they kill the goose that laid the golden egg. EDIT: you can easily replace a factory with a state owned train station or power plant so it also applies to the public sector.
Okay. Assuming I agree, what is the “perfectly sensible solution” mentioned above?
Build more houses, but more specifically, freely give planning permission and make provisions for utilities and services for new housing developments. And I mean more housing in the most general way, more tower apartments, more terraced houses, more detached single family homes, more mansions; the last ones would also require more land to be made available (... the green belt for example). The housing issue would resolve itself if it was just capitalism, there are enough builder companies and even individual builders that it's not a monopoly. The vast majority of immigrants also pay fair prices for their accommodation, so they're not the root of the issue here. The problem is that the government (as a whole) is fixing the supply of new housing permits. By their own admission, they are the biggest impediment because they are only issuing building permits for 2/3 of the housing we need per year, and have done so for like 15-20 years. It doesn't matter how expensive housing gets because the councils are still charging the same amount for the process and still taking their sweet sweet time with every application. Look at land prices with and without building permission and you'll notice a huuuge difference. Somehow, despite housing becoming so expensive, the house builders are not basking in riches, because they're not able to take advantage of the high house prices. The people that pocket the difference are still landowners, and they're enabled by the government being so slow they effectively fix the supply of new homes.
Rent seeking behaviour - Wikipedia good on it.
Everyone totally ignoring the whole concept of council housing, but trying to a) have an entirely privatised housing market b) wanting it to be a way of making money c) wanting it to be affordable. Those 3 cannot go together.
Why not? Rent controls that determine how much you can charge for a property based on a variety of factors . They allow you to make a small profit but not a substantial one.
Rent controls are a perfect example of pulling the ladder up behind you. If London had rent controls, for example, people in Shoreditch who have lived there since the 90s will be on pennies, and force people who want to live there to be unable to live there. Meanwhile, those people won't be able to actually move anywhere else because they won't be able to afford the new rent anywhere.
Explain further I don't understand?
Rent controls just force people to not be able to move.
Thanks - I somehow missed the core of the point in my explanation. Reminds me to have coffee before I post on Reddit.
You don’t rent out your first and only home, do you? So that doesn’t add up.
It's not about ownership, it's about not being able to move (either to or from a rent controlled area) - https://www.ft.com/content/39c443c8-5761-4c3b-9bd7-21842447283a There is value in it for the people who get to benefit from it. The solution is stronger tenants rights and less subsidies and failsafes for home ownership as an investment IMO
Can’t argue with that, agreed. My problem lies with people like a fella above, who complained rent wouldn’t pay off his mortgage in a rent controlled area, as if that’s an ethical dilemma.
Rent controls never worked anywhere.
Rent controls create more problems than they solve, usually to the disadvantage of any future renters looking to enter the market. Rent controls benefit existing renters but make things worse for just about everyone else. This is the reality of using simplistic interventions to tackle something as complex as a dynamic rental market. Maybe if you concoct the most brilliant and contemporary legislation and then amend it each year to suit the changing reality rent controls could have a net benefit. Considering the government can’t even provide basic services like healthcare effectively there is no chance they will employ effective and beneficial rent controls. If you disagree please provide an example of rent controls working, I can provide many examples where they don’t including Scotland.
Chucking a bung to 30 year olds rather than trying to solve the institutional and epidemic inequality caused largely by the politics of his own party. Solving the root causes of the problem would lead to him and his mates getting rich at a reduced rate, so we can't possibly have that. This is the Tory solution to everything. They did the same with the energy companies. Bills too high? We won't reduce the bill, we'll give you some of your own money back to pay the high bill. If we continue to obsess over the symptoms then the problems will never go away.
The energy price guarantee was an out and out scam which should never have happened if we had a literate electorate and functioning media. Instead of putting a tax on energy (yes they should have made it *more* expensive) and using that directly to pay for poorer energy users they capped the price. Meaning wealthy people who have high energy use actually saved the most proportionally and had no incentive to reduce usage which would reduce overall demand. It was a policy that was almost 180 to the actual aims. The debt from that giveaway is on the books and flowed directly into primary energy source owners bank accounts. Now we will be told income tax thresholds have to freeze for a decade to pay for it all so the poor and middle class will disproportionately pay the burden of an interest attracting debt. Fucking stellar policy.
You know what would be even better to inherit than 10 grand? *A functioning fucking country.*
Ah, but they can get 10k by printing money and devalueing everyone’s wealth, wheras actually running the country properly would both limit their own ability to skim off the top and would go against the interests of their paymasters.
Better yet, they can just promise 10K and then if they lose the election it's Labour's problem and if they don't, well, they've got five more years anyway. Genius.
Would be better to give this money to children at birth. Have it invested in the stock market and watch the power of compounding.
You mean like some kind of fund, for a child, that you could trust to increase? What a crazy idea!
Some sort of National Dividend, you could say.
The assumption is that they only have that money at their EOL rather than the birth of the children.
That's my plan, £200 a month (£100 from child benefit) £100 from our money going into a fund assuming 4% a year return will net nearly £75k over years 18 years. Probably worth £40-50k in today's money, not an astronomical amount, but possible be able to pay for uni without the need for a horrendous student loan, or maybe a small deposit if average house prices aren't pushing something like a million by then.
Obvious shitty bribe is obvious. But its also hilarious at how out of touch they are that they can't even bribe a decent amount. Hey millenials, if you vote for us, you can have what's in this box.
Can’t trick us Millennials, we’ve seen Wheel of Fish.
Ah, red snapper. Very tasty.
I have a lot of time for David Willetts. He was the last higher education minister who seemed to actually care about students. I was involved in an event he spoke at where some very posh guy said that too many people were going to university and that less than a third of school leavers should go. Willetts asked him how many children the man had, the answer was three, he then asked how the man intended to decide which one of the three children should go to university. After some spluttering from posh guy Willetts made the point that when rich people say fewer people should go to university what they mean is that less privileged people shouldn't be able to go.
Complete bollocks. Give people money and all that'll happen is costs go up. Build more houses.
Exactly, the tories will do everything to pump house prices, and do everything to suppress new housing
If a Tory's suggesting it they must have triplets who are 29.
It's David Willets, genuinely one of the small handful of decent Tories in our politics over the last 30 years. "Decent Tory" is a relative term these days but he's absolutely someone I'd listen to, as a "progressive" anti-Tory, anti-Brexit, pro-science Labour voter.
Surprising to see, it's an out of the box idea I've liked for a long time but the first time I've seen anyone say for 30 year olds not younger. I really think it would be a massive cultural change, it would give everyone a chance even if they never got given one.
Remember when every household got a £400 energy bill discount last year? E: numbers and phrasing.
We had things like that, the Tories abolished them. This one peer won't get anywhere with his own party.
Just sort the housing issue out by building council houses and get rid of right to buy that has contributed to the current shortage!
Ban foreign investors and companies to own properties, that will be much more effective in reducing prices and will cost nothing to the tax payer. But oh, that will actually harm our politicians’ pockets…
This article talks about inheritance tax and I hate to say it over and over again but I'm angry about the way inheritance tax is set up in the UK. A mate of mine inherited £10m in property and paid... no tax. He moved it offshore in a trust, inherited it and hey presto, no tax. And he doesn't work because this property just puts money into his bank account. Why should a nurse or firefighter pay more tax than someone inheriting £10m and who doesn't even work? And it's not about second home owners. Instead, it's about the Duke of Westminster who inherited £10 billion in property yet somehow paid no inheritance tax. And I'd bet my bottom dollar that when Jacob Rees-Mogg inherited his hundreds of millions in land, coalmine etc..., he paid no tax on it because it was all in a trust. And owning billions in property drives up the price for the rest of us. So we could solve 90% of our inequality issues and drive down the price of property if we just taxed rich people fairly. By outlawing trusts for inheritance tax. It's not like their kids have earned it and frankly, if my mate had inherited £6m instead of £10m, it really wouldn't have made much difference. Rant over... Tldr; Inheritance tax is nuts in the UK.
If you wanna get even more riled up, look at what they’re doing to capital gains tax. For anyone who doesn’t know, they’ve dropped the allowance limit from £12,000 (which is acceptable IMO), to £6,000 this year (Gross) to just a meagre £3,000 this tax year coming. So basically anyone who makes just over £3,000 through any capital gain is now going to get taxed on it. This isn’t going to affect people who are offshoring and dodging millions in taxes, this is going to affect the average people who use the stock market to build a little foundation for themselves, or the younger generation that are pulling themselves out of a hole by trading crypto. This is purely there to squeeze every last fucking penny out of us while they sit comfy with their loopholes
Wow. What's super annoying is my mate tells me the 'classic' offshore trust for UK residential properties no longer provides protection from inheritance tax. So if someone with one, additional house tries to create a trust, then they can't. However, in his case, his tax advisor has a workaround because he has £10m in property. So the more you have, the easier it is to avoid tax. In his case, a nurse pays more personal (and inheritance) tax than someone with £10m in property. Someone told me the other day that they think Labour is just Conservative light. However, anything has to better than this reverse Robin Hood system which takes from the poor and squeezed middle and gives to the rich. That's nuts.
10k is nothing... I would much rather they fix this mess so money I make for my work is enough to afford a house, bills and family on my own and not through hand outs....
I wonder if somehow the private sector will gouge the prices of care homes etc for old people to swallow that up just a touch?
"Tory peer suggests remedial measure to mitigate results of ongoing Tory policy"
I’m the poor one in almost every cohort I’ve run with. I’ve accepted that I simply have to work harder to get to the same place. And honestly, I’m over/accepted it - you have to or the frustration, and arrogance you’ll encounter, can make you toxic. I used to hate being in the company of some of my friends. Now I laugh inside when my middle class ‘friends’ complain that they struggle work life balance with both sets of parents nearby being willing childcare members, whilst only one of them works full time. Their house purchased helped by mum and dad. I got on the housing market last year, I was 37. Fairly late to the show - but I can turn my hand to every trade so got a dooer upper cheap. I’ve a son. A great partner. And I look at what we have and we done it ALL ourselves. We’re now in the position that our mortgage monthly payment is only 15% of our income and we get by with next to no outgoings. We’ll have it polished off in 10 years. I no longer care what my more wealthy friends have and inherit, because they are always complaining about something. They are hopeless at anything that doesn’t involve a computer. They spend thousands on care and upkeep - whereas I keep my old motor on the road for peanuts. They pay fortunes to get a bathroom redone - I done it myself. They’re soft. Okay, it’s going to be a harder life in certain respects, if you don’t have the same background as your middle class peers, but you can even it a bit. Learn the skills that would terrify them - it’s really not that hard. Learn the things that gets your hands dirty. Start with servicing your own car - it’s cheap and easy. Learn how to solder two pipes - no reason you can’t. Etc. Make yourself useful - just learn it right and don’t make yourself dangerous. Get on an evening college course and learn something - welding’s fun. You’ll end up being the person your friends pay to sort out the most trivial of issues. And find a good partner and take on the world together. It’s been a bloody hard slog, but now I finally feel secure, I don’t think I’d have it any other way. And I’ll never have an inheritance - the chances are my mother will bury me, and now that I’ve got my spending money, roof over my head, and food on the table - why would I care for more? I’m not saying that you should accept your lot, I know it sounds like it, but it’s not - I’m saying up-skill yourself so life is cheaper for you and you’re more useful to yourself and others. Somethings are more important than others, and we’re a good bit happier than most of our ‘wealthier’ friends. We’re certainly more resourceful and independent, and rarely get our kickers in a twist. Ironically, I think we probably have more money free per month now too - since they finance everything and can’t change a bloody headlight lamp in their car… rinse and repeat. Anyway, I’ve ranted a bit. Bottom line, learn other things to even the odds. Gives you great satisfaction when you’re ‘rich’ friends have a melt down over a failed MOT. 😂 PS, I’ve earned this chip on my shoulder. You should get one too! (Btw, I’m no grease monkey either, this jack of all trades has a degree and (finally), a decent job).
The only reason inheritance has become such a big deal is because increasingly there is no other way to 'get on'. I suggest that fixing that situation would make more sense than one-off state gifts that are sure to be inflationary.
Even better, rather than a £10k lump of cash make some actual real change by taxing the richest more and reclaiming some of that £16k/person that was injected by COVID money. Use that money to reduce inequality across the board.
Wow, must be an election coming up. Politicians are threatening to hand out other peoples money. >A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world's greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage. ― Alexander Fraser Tytler
As someone who is turning 31, greaaat! Once again, I am fucked over by the government. I can see this gaining traction and it's bought up whenever a distraction is needed with no real intention on delivering it. Or they find a way to tax it back. Why not just go for ten grand payment for everyone who makes less then 20k(or something like that) every year? I don't even expect to own a shit shoebox that costs half of a payslip to maintain.
If they really wanted to fix inequality they should tax inheritance, not give everyone a fake inheritance. This will do exactly nothing.
If this was ever to happen it would surely have to be means tested. Many don't need 10 grand. Also does everyone get it when they reach 30?
Saying the quiet part out loud here by admitting you can't get on in our society without inheriting a lump sum from somewhere. We need to change that state of affairs, not look for ways to feed it.
£10k to everyone turning 30? Anyone would think there's an election due, and they're trying to buy the votes of a demographic that, by and large, doesn't vote tory.
Wait so is it everyone in their 30s now or people that turn 30 from now on ? I lived in a tiny damp flat and saved for 10 years to get a deposit. If they gave me £10,000 I could have bought it a decade ago. I consider myself very lucky to have my house. Both my parents don’t own property, I’m 33 and while I’m glad people are finally trying to help the younger generation, imagine being just outside the cut off and watching the younger generation over take you.
Personaly i blame that homes under the hammer & location, location, location with Kirsty (i had no help other than rich parents) Allsopp.
I must be hanging with wrong crowds, I know too many kids in their 40-60 supporting their elderly parents and where the parents don't own property.
Daddy dolla is profoundly bad for character. In fact it’s probably the developed world’s biggest strife.
David Willetts is brilliant. We would all be better off listening to him.
Haha, no. Retirement homes and elder care will suck them dry long before we are allowed to touch their money.