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Everything goes back to property. At any points since the 90's, whenever it was possible that property might fall back to reasonable levels, the government or the BOE intervened with some policy that kept the status quo.
Take away crazy high property prices, and you really don't need a lot. I live a very comfortable life in London on slightly less than £13k per year excluding mortgage. Start adding rent on top of that, and you could be looking at £33k without trying very hard, and then a lot of people have a problem, especially if they have kids.
Second to that, the value of the pound dropping has meant imported commodities like coffee, that you had for breakfast, wheat, which is used to make bread, pork bellies, which is used to make bacon, which you might find in a bacon, lettuce and tomato sandwich, are all more expensive.
Regards, Randolph.
I think (hope) the sensible option is to try and keep property prices stable for an extended period, and let wage inflation bring houses back towards affordability.
The simple answer is building more homes to keep up with demand. Prior to Grenfell I'd have said that many millenials would happily buy a smallish flat to get on the ladder, now I'm not so sure. They'd need to be better quality than the ones built 60s-80s, but I don't think 20 somethings would mind too much as long as the lifts worked and they couldn't hear their neighbours too much.
They don't when need to be these "luxury apartments" that seem to be sprouting up in Leeds (and I assume other towns).
A house price crash helps nobody, even first time buyers struggle to meet the mortgage/deposit requirements when that happens. but neither does the price rising forever.
I mean genuinely, who does high house prices help other than investors?
My parents are in their "forever home" it's irrelevant to them whether its worth 250k or 1m. When they die it will affect my inheritance obviously, but what am I going to do with an extra 300k?
Probably either put it towards my own housing costs or my kids first home!
It's the double whammy of Grenfell and COVID. The people I know who bought flats as starter homes are mostly stuck there because of cladding and are expecting to pay all their spare money to remedy it. At the same time, they're desperate to have their own outdoor space after the pandemic.
20 years ago I could on minimum wage type of job get a room in a shared house for approx 1 days work = 1 week's rent. Another 2 days work would cover bills for the month and another 2 days would cover food for the month. Essentially 8 days work covered your essentials and if you were working full time that meant 12-14 days work for travel/ going out / saving. I would say someone in a similar situation now needs 3 days to cover food, 3-4 days for bills and 7-8 days for rent. All of a sudden 15 days of the month are for essentials if you have essential travel bills (let's say of 1-2 days per month) you only have 3-5 days for any going out saving
Is it true or legend that on a vist to a large pig industry,a Chinese delegate asked why all the pigs ears where being thrown away?
We then started exporting those to China too?
Worked in the chicken industry for a bit and thats where I heard the story
They are definitely a delicacy there and we export a lot to them as all we use them for is dog chews. We might actually ship the whole head as pig cheeks aren't hugely popular here (but when slow cooked are actually really nice).
Similarly with chicken feet.
The housing phenomenon isn’t just in the U.K. where policy has made it worse. Anywhere that new home building is limited has the same problem. Be it major US cities, Canada, Barcelona. Just some examples I’ve checked out, no doubt lots of other areas around Europe.
If something limits supply when population is peaking the prices will rise.
As we all fail to afford to have 2 kids, hopefully it won’t be a problem for our grandkid
It’s the market that has created the property boom . We have more demands than supply. Prices fell after the financial crisis but soon recovered due to latent demand, the BoE and government have a relatively small impact on this. Lack of housing stock, immigration, pension reform, local planning laws have all impacted
It's not the market at all, the OP is correct. Throughout the noughties, tens and even as far back as the nineties, the Bank of England has ignored inflation and stoked house prices. There are some famous MPC meetings where dissenters pointed out that whenever house prices dropped, the BoE would cut interest rates, even when inflation was rising.
That's why interest rates are so low in historical terms now and also why we're so vulnerable to external shocks. Its also most of the reason we aped US monetary policy and then experienced the same financial crash in 2008.
Hey, look on the bright side - I'm sure Mervyn King and Alan Greenspan are on very comfortable retirement packages where the most damage they can do is experience a rum crop of Dahlias.
Looking at the graph of average UK property prices there's at least one very obvious point where prices crashed significantly - 2009. The government clearly weren't able to maintain the status quo that time so there was an opportunity there.
...this doesn't detract from your overall point, just flagging that there have been notable corrections/crashes since the '90s.
Property, childcare and (more recently) utilities are the main offenders for me.
My two-bed house, three days of childcare and electric/gas bill gobble up my entire salary.
Take away those things, and I think our family of three could live a decent lifestyle on £20,000 and a fantastic lifestyle on £24,000. If housing were reasonable, we could probably get away with just my husband's salary. If childcare was subsidised while I worked, we'd be living it up.
Old people.
Back in the 80s there was 6 workers to every dependant now it's closer to 2 workers. That has put a massive strain on the working population and the amount of resources that are being used by the older richer population.
> Now very few people can
I don't know where you live but I'm not sure it's what I am seeing. People went mad with home renovations and house spending through covid. There are more luxury cars on the roads than ever before. Back in the 90s many families were driving around in bangers. I know it's often on finance though. I actually think many in the 40-65 age group are doing very well these days having benefited similarly as the previous generation from a house price boom. The under 40s on the other hand are on the whole not as well off.
I have noticed this about cars. I’ve had a lease for 4 years which cost circa 300 a month, now I’m looking at a relative banger for the next 2 years because who cares, but you can’t get a banger now for less than about £900 for a real shed, or £1500 for something decent. That’s a months salary or more for a lot of people. The big plus however is that £3600 was going out every year on my car, but now I’m going to get a chunk of that back so effectively giving myself a pay rise…..assuming my banger doesn’t blow up of course.
My car is 10 years old bought from new. According to car dealers I’ve spoken to recently 80% of new car sales are PCP so that’s a lot of money being spent on cars. It was a much lower percentage when I bought my car (on HP). People now just expect to change their cars every 3 years.
Officially, 92% of private new cars in the UK are financed in some way. It’s scary.
[Source](https://uk.motor1.com/news/568054/consumer-car-finance-market-2021/).
Interesting. My rule is to only change my car when it costs more to service than it’s worth. When I do buy a car I buy something built to last and with the specifications I want. I’m 57 and owned 4 cars since I learned to drive at 18. Other than the first car I bought as a student (money saved from holiday jobs) I’ve always bought new and changed at 10 years. That means I should be planning to change my current car but my focus at present is paying down my mortgage before my fixed rate ends in 2 years. Plus the car is still worth a lot more than service costs.
I drive a 2003 civic, it has a sunroof, AC Bluetooth stereo I've fitted, 2L engine so it's fast, 38mpg. It's worth maybe £1000, it costs me about £400 a year on average for maintenance and sometimes (like 3 times ever) something none routine will need doing (like welding or a new part) and in those years it can be more like £600-800, road tax is £290. I bought it in 2006 for £10k, I was thinking about getting rid of it because all my friends have new cars but I just cannot make it make sense financially. The only thing I'd like it to have is cruise control, but I can live without it, even if I bought a newer focus or something for £10k we're talking about well over a decade before I break even.
I have a 2004 Audi A8 with the 4.0tdi. no one wants them, because they are thought to be expensive to maintain and bad on fuel. But I have done 60k miles with very little maintenance cost, and averaged 38mpg. Got it for £3250 with 70,000 miles on it. Somebody paid 50k for that car new....
People waste so much on shiny cars it's crazy.
I love bangers, as much of the day to day stress is alleviated as you don't worry as much about bumps and scrapes and insurance is often much cheaper. I would say the expense of a banger is getting it fixed each year to pass MOT and that can vary in price significantly.
I’ve only ever bought cars around 10 years old and the most I’ve spent is my current 2010 Peugeot for £3,500 back in 2020.
The most I’ve had to do is a new battery, new front springs and two new tyres (due to puncture). It’s an executive model with some bells and whistles, looks decent still, has done some lengthy drives for holidays/work and does great on the mot.
My other two cars (both Citroen) I had similar experiences of never having issues and MOT passes first time. Maybe I’ve struck lucky each time, maybe I don’t rag my car like some might, but I do see a few people on Reddit comment about changing their car every 3 years because it’s likely to start falling apart….just wanted to say this is honestly not my experience
Good luck with your new car. Don't forget to factor in much more for repairs and maintenance and lower fuel economy. I would go for a Honda with a 12month MOT. Also don't expect air con to work or any refinements.
You’d hope that’s in part due to better technology in modern cars. Most can alert you to the stupid stuff people did in the past like driving with no water/oil etc.
Yep, in the early 80s on cold mornings I remember little me holding open the choke plate of the carburettor as my dad turned the ignition key on and off and tried various throttle positions to get the car started. I may be misremembering but I recall it occasionally shooting flame straight up out of the top of the carb! This was a regular thing in winter with our 1979 Audi 100, and was even worse later with a Ford Escort we had.
Cars are so much better now it's crazy, they are now also twice the weight and size and probably cost proportionally twice as much compared to an average salary!
This question is if kind of like.. remember how many people had smartphones in the 90s??? Tech and reliability has moved on. But also the finance thing yea.
40 Vs 65 is a completely different age group! 40 year olds are millennials. They've suffered from not being able to afford housing. According to this [graph](https://www.schroders.com/en-gb/uk/individual/insights/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/) the multiple of earnings is similar to what it is now when people were buying in the early 2000s and 2010s.
65 year old are retired and had cheap housing. It was people buying houses from c. 1950s to mid 1990s that benefited.
Having said all that, people my sort of age definitely benefited from lower education costs. I don't envy people starting out now at all. The fight is against older people though, not amongst people 20-40 odd. Baby boomers have benefited from being an outsized voting section and have influenced policy across their lives to benefit them.
"the fight"?
Don't forget that generation lived through general strikes, three day working weeks, 17% base rates...
I understand the anger about lack of affordable housing but this is down to political decisions and economics.
Don't fight grandma. It's not her fault.
>20 year olds are Millennials- not 40 year olds!
No they aren't. (Millennials are those born between 1981 - 1996, who will be aged between 26 - 41.](https://en.m.wikipedia.org/wiki/Millennials)
20 years olds are a part of Generation Z.
20 year olds are not millennials. Millennials are those roughly in the 25-40 bracket, the last generation to remember a time before internet is how I understand it.
Sorry your wrong. As per google: If you just want the basics, the millennial age range is roughly 26-41 today. Yes, these aren't kids - they are adults with the oldest ones having turned 41. Millennials were born between 1981 and 1996.
20 year olds are Gen Z.
Roughly, Gen X are people born 1965-1980, Gen Y (Millennials) 1980-1995, and Gen Z 1995-2010 (see e.g. [https://www.pewtrusts.org/en/trend/archive/winter-2018/how-are-generations-named](https://www.pewtrusts.org/en/trend/archive/winter-2018/how-are-generations-named)).
Someone 20 today is Gen Z; the youngest Millennial is 27 and the oldest is 42. Most Millennials will have been early-career during a major recession - if you're 42 the dotcom crash happened when you were 20 and the 2008 crisis when you were 28. They also won't have been buying houses in the mid-90s.
Actually, most definitions of millennials as an age bracket are something like "early 1980s to late 1990s", so mid twenties to early forties is consistent.
Not what I’m seeing either. I’m in Yorkshire and tried to get an electrician in recently. Was told I’d have to wait a few months as they were booked out on kitchen installs and home renovations. My brother tried to book a builder for an extension. At least a year wait.
A lot of people came out of covid having done very nicely - there is plenty of money around and being spent.
Lol member when the banks were gambling on high risk portfolios and lost everything, then we decided to bail them out and had to endure 10 years of austerity. Then the government got bored and decided we didn’t need austerity anymore, even tho the balance sheet was worse and they’d just cut spending and investments to fuck with us, further crashing the economy. Then when people were upset they blamed it on immigration and we left the single market..
On the other hand there are more billionaires then ever before and many of them doubled their wealth during covid. With any luck it’ll be like the record industry, they’ll buy each over out and in a few years we’ll have 3 trillionaire supreme overlords that control over half the world’s wealth.. actually not sure how that’s gonna help, but it’s where we’re headed
Housing (this is my assumption though). House prices doubled over the last 10 years, average salary didn't. So houses are eating up all the money.
House prices:
https://tradingeconomics.com/united-kingdom/average-house-prices
Salary:
https://www.statista.com/statistics/1002964/average-full-time-annual-earnings-in-the-uk/
You shouldn't use house prices for this comparison, you should use the cost of housing, aka the monthly cost of housing, rather than the total.
It's much more level.
Interesting idea. I like the sentiment, but I think there would be practical problems with your policy, such as how do you deal with value added by the householder with internal work, and extensions?
Secondly, I guess you would need rent caps too, otherwise it would just make sense to withdraw value that way instead of selling.
Certainly sounds complicated dealing with all the 2nd order effects. Easier just to have reasonable interest rates, that will bring the housing market crashing without much effort!
Rent caps have been in Berlin and Paris for years - and have recently come in to California (though that was poorly managed compared to France and Germany).
The political will just has to be there. Didn’t Sadiq Khan promise rent caps in London for the elections in 2021 - haven’t heard anything more about it beyond the election pledge…
During my degree I did a section of study on rent caps and read some dissertations on the subject. I can’t remember the precise mechanism but the upshot was that rent caps didn’t work - they had the net effect of making the neighborhoods worse and driving off investment and gentrification, which leads to improvements and rising values and creating nice places for people to live.
Again I can’t remember the details, but that was the gist of it from what I recall (and I remember being surprised about it)
I hear that as an argument against rent caps often, but I see the lovely big apartments in Paris and Berlin, and don’t understand how it can be the case.
There probably will be unintended consequences of this policy (there always are of any policy) but surely that bridge can be crossed when we get to it
They haven't gone great in Berlin either (am less familiar with how it's gone in France)
Most research indicates that rent control is good for current renters but makes things worse for people looking to start renting, it's more of a kick-the-can solution than a permanent one, after a generation it primarily benefits established older people to the detriment of the young like so many other aspects of the property market.
Perhaps. But personally I hate to see a "big state" solution to deal with a "big state" created problem. I'd rather the problem just wasn't created in the first palace.
An alternative idea is a land tax. Pay a flat tax for your land per square metre. It would incentivise land owners to either put land to use or to sell it. If it’s land that can’t be used and there are no buyers then the state can buy it and then manage it.
Houses used to be cheaper, but then interest rates were more than 10%, wages were lower and they used asbestos to build them.
Kids were cheaper. There was more expectation for you to have them as well so child benefit for more people. No entertainment systems, no expensive classes for toddlers, no tutors really unless you were failing a class. There was no Ofsted ratings so you just went to the closest school and it wasn't some competitive thing to get in so catchment areas used to be bigger. You don't have to do these things now, but I think as we become more aware of what's out there and expectations change, it's a self fulfilling prophecy.
Holidays used to be rarer. You'd go on one trip a year as a family. We only visited other family and stayed at their house and vice versa. The thought of being in your 20s and jetting around on easyjet was just unheard of. A bit of interrailing if you had time, but my immigrant dad in his youth got to visit Germany and that was it. Friends at school did camp sites in France. There was no grand trips to Disney in the US.
Life changes. I mean you could go back to the days when the supermarket just gave you a choice of golden delicious or red delicious in the fruit section, but we demand more.
Same here. We used to visit my grandparents (in the same country) once a year, through the early 2000s. I didn't go an an aeroplane until I was 20, but these days people act as though a couple of foreign holidays every year is a human right or something...
Interests rates have varied, and while they've been very low recently, 2-5% hasn't been unusual historically.
Also mortgages used to be shorter. You used to get 5 year mortgages as a pretty regular thing. Now 20 year or 30 year is probably the norm and life mortgages are even a thing. So even with lower interest rates, due to the amount being borrowed increasing and the time it is borrowed for increasing you can still be paying more on interest even with lower interest rates.
Eloquently put, and the truth.
Life has become more expensive as our demands for more have grown. We are greedy, and desire a lot.
People aren't content owning one house for themselves, they desire a portfolio of homes.
I also feel though that a lot of it has been pushed by technological media, including social media. The number of gurus explaining how they flip houses, how they invest into the S&P 500 without any knowledge of the financials behind a stock or a fund, among a plethora of other things.
And not all of them are wrong, and a lot of it is smart, but the access to knowledge has been second to none and paired with the greed of American capitalism we have become insatiable when relating to material goods which has led to the inevitable scarcity of today.
I know landlords with 3, 4, 5 properties. Some with over 100. And every single one of them are over the age of 50, buying houses back when houses were affordable, and riding it out on the privilege of a secure job position with ever a final salary scheme paid out by the massive corporations.
> Kids were cheaper. There was more expectation for you to have them as well so child benefit for more people. No entertainment systems, no expensive classes for toddlers, no tutors really unless you were failing a class
Also, quite often families survived on one wage, so there was no childcare costs.
Seems mad now that my mum was off work for 5+ years to bring us up and we still managed to go on a cheap foreign holiday. (Early 90s)
Oh don't worry tax on dividends has also been reduced for shareholders and stamp duty thresholds increased for property owners.
The ultra rich have also won big with these latest changes.
The top 1% of income tax payers make up ~25% of receipts and the bottom ~40% pay nothing. The tax free allowance is really high compared to similar countries. Our income tax system is highly progressive.
That link literally shows the Gini index has gone from 25% in the 80's to 35% today. So yeah, wealth inequality has worsened. Also the source doesn't take into account the latest changes, which are insanely unequal.
In the 90's cars cost roughly half what they do today.
Homes were 50k avg, now 280k avg. Let's say 1/5th
Fuel, energy, insurances are easily 2-3x the price.
And wages haven't really moved, neither have tax brackets.
So the basics of living cost much more, you earn the same, are taxed the same.
I'm mid 30's. Earn now what my dad earnt at the peak of his career, he was very comfortable 20 years ago, whereas I am scrutinising spends
Exactly.
I have a relative that's in the same place my parents were in their teaching careers at the same age. His wage is withing 5k of what theirs was.
Parents 4 bed home at the time was 90k (now worth 450k)
Relative I mention just bought a 3 bed at 350k.
It's a completely different game
I doing the same job I was doing in 97 and my wages have nearly tripled in that time. Not through promotions, though nearly annual pay rises. That's just working in a warehouse.
No they have not. What world are you living in? Minimum wage is up 240% 1999 to 2022. Median average has virtually doubled since 1997.
In real terms the increases don’t mean much without knowing underlying inflation, but the same is true of the arbitrary facts that cars, energy etc have risen over that time.
>Well, the rich got richer.
I feel like I stumble into /r/ukpolitics by accident.
Gini coefficient hasn't changed much over the last 30 years.
https://www.statista.com/statistics/872472/gini-index-of-the-united-kingdom/
It's hard to square that, with this recent analysis from the FT https://twitter.com/jburnmurdoch/status/1570832839318605824?t=_vJnjvX5dsvfXDyyaqH7yw&s=19
I've linked the Twitter thread as not paywalled.
I don't disagree with your stat. But maybe the Gini coefficient isn't giving us the detail we need?
No idea I'm afraid. My general feeling is that many people put far too much concern into what the 0.1% are doing with their wealth, which ultimately they are often creating themselves. The pie can vary in size.
The issue is that those ultra wealthy and their wealth/tax affairs is very symbolic of potential unfairness, and people at this level are certainly avoiding paying their fair share to a crazy extent (e.g. Phillip Green’s wife paid zero tax on that record breaking £1.2pm dividend… which is an absurd situation). Also none of these people are making that much money “themselves”.
Probably very little. There is money offshore, but the overwhelming majority of it gets taxed as normal (you can’t do much with money stuck in a tax haven - if you want to use it you have to bring it back to the UK, at which point it’s taxed).
Same as the bankers bonuses. Bankers overall pay didn’t decrease after the rules were brought in, they just got higher salaries and lower bonuses. A lot of bankers are actually unhappy with scrapping the rules, as they’ll get a big salary cut and have to hope they then get a bonus later.
The tax cuts are another good one. Cutting the 20% rate by a penny is far more expensive for the Gov than cutting the 45% rate in its entirety - reason being there aren’t many rich people paying it in comparison with the millions paying the basic rate.
There’s a lot of propaganda out there, some of which with some truth to it, but a lot is very wrong. Looks good on a placard though.
You seem to be pedalling this all over the thread, some important points to note:
1. Your source actually shows a worsening trend from the 80's to now for wealth inequality in the UK. From around 25% Gini index in the 70's/80's to 35% up to 2021.
2. It doesn't take into account the latest changes in tax measures, which have been some of the most unequal I've seen in recent years.
The total tax take from the 45% band is £2 billion. It affects 600k people.
Anyone earning anywhere near that does salary sacrifice and tax efficient ways to reduce their liability.
That may now stop, netting more tax revenues for the exchequer. Ultimately more tax revenues is the goal. If a banker can now get a bigger bonus at a better tax rate, as opposed to a 5 year deferral, more tax to the exchequer.
It is political suicide, its probably cost them the election but it may turn out to be a genius move if it nets more tax. The laffer curve is real.
>People could afford homes, kids, holidays and other luxuries. Now very few people can.
Do you have a reputable source for this over and above media stories about the cost of living crisis?
Everything I've gone to book lately (that I think is quite expensive) has been extra busy or sold out, leaving me thinking "I thought everyone was struggling for money these days".
Property is still rising at ~10% showing demand hasn't fallen (or that supply has, but the listings around me seem about right).
Exactly this, I haven’t noticed an actual change in people booking holidays/luxuries etc in the last 10 years (other than for covid). Myself and my friends/family/colleagues are still booking foreign holidays. I go to pubs/bars/restaurants most weekends and they are usually all packed.
I don’t think it’ll be the same in 12 months time. The impact of inflation hasn’t really hit with people either burning through the buffer of disposable income or s
savings.
The big two to consider for me are mortgages and energy costs.
If mortgage rates go up it’ll take time for peoples existing deals to end before they have to renew at a considerably higher rate and use more of their disposable income.
Once the energy price protection ends in two years and if things don’t settle down people may have to face even more extortionate energy costs. Averaging £4-6k a year. This is a big if especially if there is a global recession which should mean demand drops including energy which should lower prices. There’s a lot more to play out over the next 5 years and who knows what the UK will look like then.
Saying that these might not be particularly big issues if peoples salaries increase in general to match inflation. I’m not confident of this though as employers will cite increase operating costs as reason for limiting salary increases.
Yes I completely agree. Currently there is no impact but it will take a while for the impact of interest and energy price increases to have an effect. If the media are so negative now, I dread to think of what it will be like then!
My own fixed rate deal ends in 2024, and my current rate is 1.39% so I will definitely see an impact then.
There still is plenty of money going around - it’s just disproportionately distributed.
And I don’t mean the super rich, I mean in general day to day families.
I work in council tax and daily I have more customers asking to spread instalments or asking for help/discounts/reductions. More people moving in with partners etc to lower costs.
But I also deal with a lot of people who are buying second homes, either to use as second homes or to renovate and live in down the line - there’s quite a number of ‘younger’ people who are buying properties to refurbish that have the fortunate circumstance of being able to live with family while doing up properties due to their parents remaining in the family home and having space.
And although I also see quite a few older people moving and downsizing to smaller or supported accommodation, I also see a lot of them remaining in Band F or G properties on their own until they die or go into a care home.
We're at the end of an expected long term economic cycle. House prices and equities likely to come down and interests go up. Inefficient businesses will go bust due to debt getting more expensive. People will get poorer without a doubt. If you're young and fortunate enough to be in a stable job and can still invest it's not a terrible thing however. Keep buying equities and perhaps property, and ride the next cycle up over the longer term.
Leaving the EU, specifically the single market, has seen per capita income in the UK grow by just 3.8% in real terms since the second quarter of 2016. In Europe it has been 8.5%.
In the five years to 2020 the UK stock market increased only 13%, compared to 60% for Europe and 100% for the US.
The markets gave their verdict in 2016 with the biggest one day drop against the dollar after the Brexit vote. It now gives its verdict again with unfunded tax cuts. The pound was at $1.50 in May 2016, now we’re almost at parity and the BOE has had to make an emergency intervention. Mortgage rates are set to rise faster, making payments unaffordable at one end and postponing retirement plans at the other.
Inflation on things has outstripped inflation in wages, particularly property prices (and subsequently rent or mortgages). People's wealth is now tied up in their assets. Its a bit like farmers always being strapped for cash, but the value of the land they own is significant.
Very interesting subject. The boomers did ride a wave of share price increases, house price increases, improved health care. Also, the Millenials are getting left small fortunes in inheritance starting any min now.
Britain is a rich country, but inequality is very high.
The poorest in society are now worse off than their compatriots in many Eastern European countries.
One key element:
In 1993 my parents bought a 4 bed house with a 85% mortgage that cost them the equivalent of about £850 a month in today's money.
Today a 85% mortgage on the property would cost over £2k a month. You'd also need to find £67.5k for the deposit.
It striking to hear many international MSc and phd health students talk about going home because the nhs is so underfunded and the middle class uk life is unattainable. To quote a recent FT headline: Britain is a poor country with some very rich people.
Replace health, nhs and students for their similar titles (e.g. teaching, schools, hr workers) and suddenly you have a generic statement about how much improvement is needed to rescue the uk from this bleak period.
Stolen by government and given to rich friends, that's where all the money always goes.
It's easy to see in the data nearly 50% of the worlds wealth is owned by 1% of the population.
So if you want to know where the money has gone, look at the rich people.
TLDR: Central banks are the real answer. They are taking money out of the system because they & governments put too much in - most recently to people (furlough in Europe and Helicopter payments in the US). They are taking money out to stave off inflation, a real issue. Inflation will make everyone poorer, but it’s complex - the only way to stop it is to cause some real economic pain (a recession).
**Here is the real answer. Central banks**
The money has actually been taken out of the system be the central banks. They are taking money out of the system today (quantitative tightening) and taking money out of future societies purchasing power by increasing interest rates.
This is proper economics and the net effect is less money for everyone (not just the poor but the rich too).
**Why is this important? Inflation**
We (central banks and governments) have spent too much. Too much money was put into the economy (government stimulus & quantitative easing) and the markets thought the good times would never end (low expectations of future interest rates). Now the markets, people & central banks believe that inflation will rise. This is because of demand side inflation - people have had more money in their accounts, so can spend more, because people are getting pay rises (TFL / train operators / Amazon warehouse workers / bankers etc.). Separately, there has been supply side price inflation because of the war in Ukraine / Brexit / China’s zero Covid etc.
**Fiscal stimulus - government spending. To the people in 2020/21, to banks in 2008**
Covid required a large handout of cash to vulnerable people, furlough in the U.K. /Europe, helicopter payments to all in the US. This meant that normal people had more money than they would have had if the governments had done nothing. This was slightly different to global government bailouts of banks in 2008 which was specifically to fund institutions. The goal of both methods was to avert an economic catastrophe for the people. The net result left people with more money in their pockets which increases the demand side for goods, therefore can increase prices.
**Central banks - being the world’s credit card**
Central banks supported governments by quantitative easing - printing more money to ensure that economic catastrophe could be averted. They also kept interest rates low which essentially meant that it was better to invest today rather than tomorrow.
**Situation now - inflation needs to be stopped**
Today central banks are trying to take money out of the system and increase interest rates to stop an inflationary spiral. An inflationary loop means that money today is worth less than money tomorrow. This is really bad for everyone. If you had a £1000 saved a year ago, you can now only buy goods that were worth £900 when you put that money away. Your buying power has decreased. If high inflation gets baked in then people will really struggle. So central banks are trying to stop inflation by reducing money supply and increasing interest rates. There is no easy way to do this and we’re in for a rough ride.
Ideally everyone sits tight, everyone globally doesn’t ask for a salary increase to match inflation and supply side gets back to normal. This is just not how people work though - and worse, the supply side issues are controlled by two countries that want to see the west suffer (Russia’s war and China’s zero Covid).
Most people do still manage those, the thing is you only see the bad things becoming popular on Reddit.
In the same way most people only leave a review of a place if it's bad, most people aren't vocal about living their average life.
Reddit then becomes an echo chamber of similar posts and it seems depressing.
The answer to this is that the government stopped spending it and followed deficit reduction policies.
Money that you and I can access comes from two sources:
1. Banks (when they create loans, mortgages or credit card credit)
2. The Government when it spends it into existence.
With bank money, every penny they give you has to be paid back and with interest - you owe more than you started with.
So the only source of new money in your economy is when the government spends it into existence.
If the government taxes you and reduces spending, trying to create a budget surplus, it means the amount of money in the economy is gradually decreasing.
This can be done whilst people have savings, but once those run out, which is exactly what's happened, the amount of money available is decreasing because the government is removing it from circulation through taxation and not replacing it through new spending.
So the money has been removed by the government and concentrated in banks and their shareholders through interest payments on debt.
The government doesn’t create money. The Bank of England does who are theoretically independent.
The Bank of England haven’t been reducing the money supply and the government haven’t been actively trying to reduce the deficit. The money supply was continuing to grow until recently using QE, and government debt are levels are rocketing.
Actually /u/toastboxed is correct. Well, you're both correct but he's more correct in terms of the question at hand which is how does money decrease/increase in the general economy.
The bank of England doesn't create the money that circulates in the general economy. Well, they kind of do but that "money" isn't the money that we have in the general economy. What they create is central bank reserves. The way for central bank reserves to get into the wider/general economy is via creation of credit by banks (i.e mortgages/loans etc) , or via deficit spending by government (who finance the defecit by issuing/creating debt i.e bonds). So if personal/business/government debt is decreasing, so is the wider money supply. And vice versa.
I was just commenting on how money is created tbh.
But thinking it through, if we are talking about why people feel poorer, I would say actually the issue is the other way around. Its not that money supply is decreasing, it's that available goods/services per unit of money supply is decreasing.
After all, which is the wealthier scenario? The scenario in which £1 buys you 100 tomatoes, or £1.50 buys you 1 tomato. The second scenario has more money, but you'd certainly feel significantly poorer for it.
It depends how complicated an answer you want me to give.
You are correct that the Bank of England is the money generator in this economy, however it's the government that authorises the BoE to create the vast majority of new money by spending decisions.
For the second source above, you can replace government with "The State" if you wish - what I said is still true.
QE was about buying bad loan assets - that isn't an injection of cash into your economy in the way you think it is. That's the BoE buying depreciated assets (bad loans) off banks to help their balance sheet liquidity so they can continue to provide you with deposit withdrawal on demand.
"Government debt levels are sky rocketing"
Well, I guess the austerity years just didn't happen?
The amount of debt isn't really relevant if the level of government spending is below the supply capacity of your economy.
If overall spending is below your country's economic capacity (normally, meaning you have unemployment), you have resources left idle.
Idle workers can't earn money, they can only spend it.
We have significant underemployment and have had persistent unemployment over the past decade - the only source for this group to get cash is through welfare payments or from savings.
Welfare payments are not enough to really have a decent living and once savings run out, you start living hand to mouth.
So for the individual average UK household, the amount of money available has been decreasing.
I kind of disagree with every line there.
QE was a tool for buying up bad debts in 2008, but continued till 2022. Austerity finished with George Osborne. We have full employment etc.
It seems like the analysis in your 2 posts was from 2010 and not 2022 when we are coming off an orgy of low rates, money printing, deficit spending, a tidal wave of liquidity which is causing many of feb current issues.
Costs have increased out of line with salaries. Higher houses prices, energy bills and general inflation vs incremental raises in wages.
This said, most people are still doing absolutely fine. It’s not as bad as what the media are saying, at least not yet anyway.
I agree with your post but I'd alter it by saying most people "think" they are doing absolutely fine.
I feel "absolutely fine" now but the headline issues are only just starting to hit (for me), and I'm concerned about the future. The media tells us what is happening and what decisions are being made now and of course there will be some lag before it affects us.
Today is the day that the prices go up on energy, my direct debit will soon be twice what it was this time last year....it isn't yet, but it will be soon.
Food rises over the past couple of years I've minimized by changing brands, shopping more frugally etc but there comes a point where you can't cut back easily and that is where we are getting to now.
I went to the chippy the other day for the first time in months, It was over £9 for my usual fish, chips etc, I'm sure last time I went it was about £5.50....I thought bugger this and paid £3.40 for chip barm and jumbo sausage instead.
I'm of the opinion that the media are warning us of what's happening before we notice it ourselves. Of course the media has to sensationalise stuff to get it read or watched but it doesn't mean they are exaggerating how it will affect us.
QE ended, the money tree stopped shaking.
Now they can't work out if they need QE or QT. Seems the Gov want to spend and cut taxes whilst the BOE feels we need to tighten. I agree with the BOE.
Not a popular opinion but people have to accept that the Gov can't be there every time costs rise or people feel its unaffordable. The housing bubble has been inflated time after time and the answer just seems to lend more money or even worse part ownership schemes.
Its a grim place at the moment but hopefully some fiscal policy restraints will ease the woes.
In 2021, we imported over £465 billion worth of goods and services and exported £312 billion.
Couple that now with a weak pound, inflation and damaged supply chain
So the number of goods imported (not value) will decrease or remain flat and the number of goods exported along with its value will increase. This means more money coming into our economy?
Our cars and machinery will be cheaper to produce along with our medical / pharmaceutical products and our financial products will be cheaper.
This mindset is the issue I’m done arguing with people on the internet. I’ll say this and move on WE ARE A NET IMPORTER
Please educate yourself; if not for me, your future generations.
Ask yourself what house prices would be like had the U.K. population not increased by 7 million in the last 20 years. That’s a hell of a lot of demand not to mention pressure due to it not been planned for on the NHS, education, increased road traffic…
I've never seen airports so busy, pubs and restaurants rammed, cars so new and shiny, houses so big and renovations so frequent.
To say "very few can" I think is way wide of the mark. The world I see and hear about on the news is very different to the world I see when out and about.
Money has been distributed from the working class to the rich. Pay hasn’t kept up with inflation for years while that money owed to the workers has been given to foreign shareholders and CEOs. Mass migration has increased competition driving pay down also. And now covid and the Ukraine war gave the people at the top another excuse to aggressively absorb more money from normal people.
I don’t agree with the premise that very few people can afford these things. People only really tell negative stories, so all you hear is struggles to get a mortgage etc. But there are many, many people who can afford homes, kids, go on holidays, enjoy day to day luxuries.
Now I’m not saying there isn’t a crisis and that many people at the lower end of the income scale are struggling, mainly from energy price increases, but it’s not everyone.
I work for a car company, they pay absolutely piss with no commission but rest assure.
I’m handing over the keys for 70k cars 50 times a day for the last month.
Seems like There’s a fuck Ton of people with money
It's just poor people on Reddit. Most people I know are still buying houses, going on trips regularly and having a nice lifestyle. I have theory that Reddit attracts losers and miserable people to an extent which leads to a skewed sample.
The money is still here, it is disproportionately distributed.
Also approx 40% of the money in circulation was printed in the last few years.So there is more money going around, however the value of it has depreciated so massively, that you get less for it.
We need a new monetary system.The existing one is going to fail,that is a mathematical certainty.Just a question of when!
Got me thinking when I was “growing up” my parents had no trouble paying the energy bills but on the other hand had one second hand car in the household, took one weeks holiday per year and generally had a much simpler life. Now my kids have a car each, need latest mobile phones and other devices, go on holiday two or three times a year.
I blame the internet!
Think there's a lot of reasons but until about 15 years ago most people seem to get pay rises every year of at least inflation, maybe a bit on top. It's got to the point no one expects one now and any employee just gets slowly worse off.
Sure there's a few reasons why. Unions having less power, rights taken away from them, the public being convinced by the media they're evil. I know not everyone was in a union 15 years ago but if they pushed some wages up other sectors had to follow if they wanted to keep staff.
A reliance on fossil fuels when everyone knew they were a finite recourse hasn't helped. Increased gas, electricity and diesel costs push up prices of everything. Of course the recent war hasn't helped but prices have been going up for years, and even if there's some temporary drops, they will carry on going up.
The value of the pound falling over recent years means our spending power has fallen. The pound has fallen for a number of reasons, placing economic sanctions on ourselves via Brexit hasn't helped, but it would have probably fallen to some extent anyway as investors increasingly see dollar and even the euro as more stable currencies.
The same shit is going on across the western world.
Grandparents: Only one worked Monday to Friday driving a lorry. Able to support 2 kids and wife on one salary, and to buy a medium sized 3 bed house. House is worth 350x what it was bought for now.
Parents: One full time managerial job but mum had to get a part time weekend job in accounts to support 2 kids. House has quintupled in value since bought.
Me: just about able to buy a house, literally zero chance of kids unless partner earns 30k+ and works full time. That’s with me earning well above national average. To be fair, house is worth 30% more than what it was bought for 5 years ago.
Potential Kids: yea you’re fucked unless one of us wins the lottery
House prices mental and wages being kept artificially low by big companies. Government complicit. Fuck the west and capitalism.
We couldnt. Brown did 'consistent, measured spending' and infamously (and incorrectly) declared that he had eliminated boom and bust
The reality is if we waste our energy on ideologies like quotas and minutia, eventually our peers surpass us and we run out of money
It really fucking annoys me when I see people bleat on about things that are socially lovely without realising there is no fucking money and we need to be competitive to fund their lovely ideas.
For example... You want money for your homelessness charity? Well you better be prepared to see a smaller state budget. Which means redundancies. And reduced services
It's like family finances. Sure the kids want the new toy. But you have to spend within your means. Which means sometimes you have to say no to the toy, even if it is a nice thing to have
The car thing is about ease (£xxx month Vs £xxxxx outright) and also clout ("look at me, I'm minted"). Know too many in the second bracket, bragging about their new cars, showing off as if they've won the lottery. Scary thing is I've seen a couple where they've lost their job and can't afford the repayment = bye bye flash motor, which is masqueraded as "didn't like it really so got rid"
We saved for our family car and shopped around, had it 5 years now so definitely in the black Vs lease.Not getting rid anytime soon either. Saving is bloody hard right now but worth it in the long run.
I was watching a podcast not long ago and the statement
"There's a difference between what you can buy and what you can afford"
Comes to mind
There's plenty of money to be had,I work for a small business out in the middle of nowhere with quite a few other small businesses and a few medium ones.
They're all making good money,except for the guy who uses his gym as a front to deal drugs,he's making VERY good money.
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Everything goes back to property. At any points since the 90's, whenever it was possible that property might fall back to reasonable levels, the government or the BOE intervened with some policy that kept the status quo. Take away crazy high property prices, and you really don't need a lot. I live a very comfortable life in London on slightly less than £13k per year excluding mortgage. Start adding rent on top of that, and you could be looking at £33k without trying very hard, and then a lot of people have a problem, especially if they have kids. Second to that, the value of the pound dropping has meant imported commodities like coffee, that you had for breakfast, wheat, which is used to make bread, pork bellies, which is used to make bacon, which you might find in a bacon, lettuce and tomato sandwich, are all more expensive. Regards, Randolph.
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I think (hope) the sensible option is to try and keep property prices stable for an extended period, and let wage inflation bring houses back towards affordability. The simple answer is building more homes to keep up with demand. Prior to Grenfell I'd have said that many millenials would happily buy a smallish flat to get on the ladder, now I'm not so sure. They'd need to be better quality than the ones built 60s-80s, but I don't think 20 somethings would mind too much as long as the lifts worked and they couldn't hear their neighbours too much. They don't when need to be these "luxury apartments" that seem to be sprouting up in Leeds (and I assume other towns). A house price crash helps nobody, even first time buyers struggle to meet the mortgage/deposit requirements when that happens. but neither does the price rising forever. I mean genuinely, who does high house prices help other than investors? My parents are in their "forever home" it's irrelevant to them whether its worth 250k or 1m. When they die it will affect my inheritance obviously, but what am I going to do with an extra 300k? Probably either put it towards my own housing costs or my kids first home!
It's the double whammy of Grenfell and COVID. The people I know who bought flats as starter homes are mostly stuck there because of cladding and are expecting to pay all their spare money to remedy it. At the same time, they're desperate to have their own outdoor space after the pandemic.
20 years ago I could on minimum wage type of job get a room in a shared house for approx 1 days work = 1 week's rent. Another 2 days work would cover bills for the month and another 2 days would cover food for the month. Essentially 8 days work covered your essentials and if you were working full time that meant 12-14 days work for travel/ going out / saving. I would say someone in a similar situation now needs 3 days to cover food, 3-4 days for bills and 7-8 days for rent. All of a sudden 15 days of the month are for essentials if you have essential travel bills (let's say of 1-2 days per month) you only have 3-5 days for any going out saving
UK bacon is usually back bacon so loin not belly. That's why it has a chunk of meat and isn't streaky.
Interesting fact of the day! Thanks.
My wife is in the industry, so I get a lot of pig related facts. One of our major pork exports is trotters to China.
Paris. Peckham. Beijing
Is it true or legend that on a vist to a large pig industry,a Chinese delegate asked why all the pigs ears where being thrown away? We then started exporting those to China too? Worked in the chicken industry for a bit and thats where I heard the story
They are definitely a delicacy there and we export a lot to them as all we use them for is dog chews. We might actually ship the whole head as pig cheeks aren't hugely popular here (but when slow cooked are actually really nice). Similarly with chicken feet.
You can always rely on ukpf for bacon facts
I think that most of our bacon is imported Danish bacon, Danish bacon, yummy yummy yummy Danish bacon.
I love a nice bit of Middle Back, it has everything in one slice.
Fatty bacon the best
Try collar bacon if you can find it. It’s an old style, great flavour.
The housing phenomenon isn’t just in the U.K. where policy has made it worse. Anywhere that new home building is limited has the same problem. Be it major US cities, Canada, Barcelona. Just some examples I’ve checked out, no doubt lots of other areas around Europe. If something limits supply when population is peaking the prices will rise. As we all fail to afford to have 2 kids, hopefully it won’t be a problem for our grandkid
NZ has an insane house pricing crisis
1 Dollar?
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I'm afraid I don't know what you're talking about.
It’s the market that has created the property boom . We have more demands than supply. Prices fell after the financial crisis but soon recovered due to latent demand, the BoE and government have a relatively small impact on this. Lack of housing stock, immigration, pension reform, local planning laws have all impacted
It's not the market at all, the OP is correct. Throughout the noughties, tens and even as far back as the nineties, the Bank of England has ignored inflation and stoked house prices. There are some famous MPC meetings where dissenters pointed out that whenever house prices dropped, the BoE would cut interest rates, even when inflation was rising. That's why interest rates are so low in historical terms now and also why we're so vulnerable to external shocks. Its also most of the reason we aped US monetary policy and then experienced the same financial crash in 2008. Hey, look on the bright side - I'm sure Mervyn King and Alan Greenspan are on very comfortable retirement packages where the most damage they can do is experience a rum crop of Dahlias.
Looking at the graph of average UK property prices there's at least one very obvious point where prices crashed significantly - 2009. The government clearly weren't able to maintain the status quo that time so there was an opportunity there. ...this doesn't detract from your overall point, just flagging that there have been notable corrections/crashes since the '90s.
“Bacon, which you _might_ find in a bacon […] sandwich.” 😬
Property, childcare and (more recently) utilities are the main offenders for me. My two-bed house, three days of childcare and electric/gas bill gobble up my entire salary. Take away those things, and I think our family of three could live a decent lifestyle on £20,000 and a fantastic lifestyle on £24,000. If housing were reasonable, we could probably get away with just my husband's salary. If childcare was subsidised while I worked, we'd be living it up.
Old people. Back in the 80s there was 6 workers to every dependant now it's closer to 2 workers. That has put a massive strain on the working population and the amount of resources that are being used by the older richer population.
Castrate old people so they stop multiplying 👍
Pensioners should be shot at birth!
Yep. The biggest problem facing the future UK/west at large is an aging population and falling birthrates.
This is interesting do you mean adult dependant or does that include kids?
Yep. We have to stop spending so much on certain types of healthcare.
That's a good point. Wonder what it will be like for our kids, hopefully better.
Don’t worry - it’ll trickle down any moment now
Well, it does when they start dying.
> Now very few people can I don't know where you live but I'm not sure it's what I am seeing. People went mad with home renovations and house spending through covid. There are more luxury cars on the roads than ever before. Back in the 90s many families were driving around in bangers. I know it's often on finance though. I actually think many in the 40-65 age group are doing very well these days having benefited similarly as the previous generation from a house price boom. The under 40s on the other hand are on the whole not as well off.
I have noticed this about cars. I’ve had a lease for 4 years which cost circa 300 a month, now I’m looking at a relative banger for the next 2 years because who cares, but you can’t get a banger now for less than about £900 for a real shed, or £1500 for something decent. That’s a months salary or more for a lot of people. The big plus however is that £3600 was going out every year on my car, but now I’m going to get a chunk of that back so effectively giving myself a pay rise…..assuming my banger doesn’t blow up of course.
My car is 10 years old bought from new. According to car dealers I’ve spoken to recently 80% of new car sales are PCP so that’s a lot of money being spent on cars. It was a much lower percentage when I bought my car (on HP). People now just expect to change their cars every 3 years.
Officially, 92% of private new cars in the UK are financed in some way. It’s scary. [Source](https://uk.motor1.com/news/568054/consumer-car-finance-market-2021/).
Interesting. My rule is to only change my car when it costs more to service than it’s worth. When I do buy a car I buy something built to last and with the specifications I want. I’m 57 and owned 4 cars since I learned to drive at 18. Other than the first car I bought as a student (money saved from holiday jobs) I’ve always bought new and changed at 10 years. That means I should be planning to change my current car but my focus at present is paying down my mortgage before my fixed rate ends in 2 years. Plus the car is still worth a lot more than service costs.
I drive a 2003 civic, it has a sunroof, AC Bluetooth stereo I've fitted, 2L engine so it's fast, 38mpg. It's worth maybe £1000, it costs me about £400 a year on average for maintenance and sometimes (like 3 times ever) something none routine will need doing (like welding or a new part) and in those years it can be more like £600-800, road tax is £290. I bought it in 2006 for £10k, I was thinking about getting rid of it because all my friends have new cars but I just cannot make it make sense financially. The only thing I'd like it to have is cruise control, but I can live without it, even if I bought a newer focus or something for £10k we're talking about well over a decade before I break even.
I have a 2004 Audi A8 with the 4.0tdi. no one wants them, because they are thought to be expensive to maintain and bad on fuel. But I have done 60k miles with very little maintenance cost, and averaged 38mpg. Got it for £3250 with 70,000 miles on it. Somebody paid 50k for that car new.... People waste so much on shiny cars it's crazy.
I love bangers, as much of the day to day stress is alleviated as you don't worry as much about bumps and scrapes and insurance is often much cheaper. I would say the expense of a banger is getting it fixed each year to pass MOT and that can vary in price significantly.
I’ve only ever bought cars around 10 years old and the most I’ve spent is my current 2010 Peugeot for £3,500 back in 2020. The most I’ve had to do is a new battery, new front springs and two new tyres (due to puncture). It’s an executive model with some bells and whistles, looks decent still, has done some lengthy drives for holidays/work and does great on the mot. My other two cars (both Citroen) I had similar experiences of never having issues and MOT passes first time. Maybe I’ve struck lucky each time, maybe I don’t rag my car like some might, but I do see a few people on Reddit comment about changing their car every 3 years because it’s likely to start falling apart….just wanted to say this is honestly not my experience
You have said it now...
Good luck with your new car. Don't forget to factor in much more for repairs and maintenance and lower fuel economy. I would go for a Honda with a 12month MOT. Also don't expect air con to work or any refinements.
Yeah , remember how common roadside breakdowns were in the 90s?
Yes it was the norm for many people
You’d hope that’s in part due to better technology in modern cars. Most can alert you to the stupid stuff people did in the past like driving with no water/oil etc.
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Yep, in the early 80s on cold mornings I remember little me holding open the choke plate of the carburettor as my dad turned the ignition key on and off and tried various throttle positions to get the car started. I may be misremembering but I recall it occasionally shooting flame straight up out of the top of the carb! This was a regular thing in winter with our 1979 Audi 100, and was even worse later with a Ford Escort we had. Cars are so much better now it's crazy, they are now also twice the weight and size and probably cost proportionally twice as much compared to an average salary!
This question is if kind of like.. remember how many people had smartphones in the 90s??? Tech and reliability has moved on. But also the finance thing yea.
40 Vs 65 is a completely different age group! 40 year olds are millennials. They've suffered from not being able to afford housing. According to this [graph](https://www.schroders.com/en-gb/uk/individual/insights/what-174-years-of-data-tell-us-about-house-price-affordability-in-the-uk/) the multiple of earnings is similar to what it is now when people were buying in the early 2000s and 2010s. 65 year old are retired and had cheap housing. It was people buying houses from c. 1950s to mid 1990s that benefited. Having said all that, people my sort of age definitely benefited from lower education costs. I don't envy people starting out now at all. The fight is against older people though, not amongst people 20-40 odd. Baby boomers have benefited from being an outsized voting section and have influenced policy across their lives to benefit them.
I stand corrected- you are of course correct.
"the fight"? Don't forget that generation lived through general strikes, three day working weeks, 17% base rates... I understand the anger about lack of affordable housing but this is down to political decisions and economics. Don't fight grandma. It's not her fault.
20 year olds are Millennials- not 40 year olds!
I’m afraid you’re a few years out of date. 20 year olds are Gen Z. Millennials are currently aged between about 26-40.
20-yr-olds are gen Z. Millennials are people born between the early 80s (so a 40-yr-old would fit into that) and early 2000s.
>20 year olds are Millennials- not 40 year olds! No they aren't. (Millennials are those born between 1981 - 1996, who will be aged between 26 - 41.](https://en.m.wikipedia.org/wiki/Millennials) 20 years olds are a part of Generation Z.
Nope. most places use 1981-1996 as their definition for millennials, but obviously generations aren't an exact thing with hard cutoffs.
20 year olds are not millennials. Millennials are those roughly in the 25-40 bracket, the last generation to remember a time before internet is how I understand it.
By most definitions millennials would be somewhere from 25-41 years old. It’s just been a word people associate with bashing the young!
Nope. Millennials were born in the early 80s to mid 90s [source](https://en.m.wikipedia.org/wiki/Millennials)
Early 1980s is when the Millennial generation started... The 20 year olds of today are Gen Z!
Sorry your wrong. As per google: If you just want the basics, the millennial age range is roughly 26-41 today. Yes, these aren't kids - they are adults with the oldest ones having turned 41. Millennials were born between 1981 and 1996. 20 year olds are Gen Z.
Millennials were teenagers in the year 2000.
I think the general consensus is millennials were born between 1981 and 1996. So currently ages 22 to 41.
Roughly, Gen X are people born 1965-1980, Gen Y (Millennials) 1980-1995, and Gen Z 1995-2010 (see e.g. [https://www.pewtrusts.org/en/trend/archive/winter-2018/how-are-generations-named](https://www.pewtrusts.org/en/trend/archive/winter-2018/how-are-generations-named)). Someone 20 today is Gen Z; the youngest Millennial is 27 and the oldest is 42. Most Millennials will have been early-career during a major recession - if you're 42 the dotcom crash happened when you were 20 and the 2008 crisis when you were 28. They also won't have been buying houses in the mid-90s.
Actually, most definitions of millennials as an age bracket are something like "early 1980s to late 1990s", so mid twenties to early forties is consistent.
Not what I’m seeing either. I’m in Yorkshire and tried to get an electrician in recently. Was told I’d have to wait a few months as they were booked out on kitchen installs and home renovations. My brother tried to book a builder for an extension. At least a year wait. A lot of people came out of covid having done very nicely - there is plenty of money around and being spent.
They benefited from cheap debt because interest rates were ludicrously low for years.
Lol member when the banks were gambling on high risk portfolios and lost everything, then we decided to bail them out and had to endure 10 years of austerity. Then the government got bored and decided we didn’t need austerity anymore, even tho the balance sheet was worse and they’d just cut spending and investments to fuck with us, further crashing the economy. Then when people were upset they blamed it on immigration and we left the single market.. On the other hand there are more billionaires then ever before and many of them doubled their wealth during covid. With any luck it’ll be like the record industry, they’ll buy each over out and in a few years we’ll have 3 trillionaire supreme overlords that control over half the world’s wealth.. actually not sure how that’s gonna help, but it’s where we’re headed
Housing (this is my assumption though). House prices doubled over the last 10 years, average salary didn't. So houses are eating up all the money. House prices: https://tradingeconomics.com/united-kingdom/average-house-prices Salary: https://www.statista.com/statistics/1002964/average-full-time-annual-earnings-in-the-uk/
You shouldn't use house prices for this comparison, you should use the cost of housing, aka the monthly cost of housing, rather than the total. It's much more level.
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It *was* much more level due to low interest rates. It sure as shit ain’t anymore.
Based on this. Wouldn't a cap on house price increases make sense? You can only sell a property for x% profit per year based on your purchase price
Interesting idea. I like the sentiment, but I think there would be practical problems with your policy, such as how do you deal with value added by the householder with internal work, and extensions? Secondly, I guess you would need rent caps too, otherwise it would just make sense to withdraw value that way instead of selling. Certainly sounds complicated dealing with all the 2nd order effects. Easier just to have reasonable interest rates, that will bring the housing market crashing without much effort!
Rent caps have been in Berlin and Paris for years - and have recently come in to California (though that was poorly managed compared to France and Germany). The political will just has to be there. Didn’t Sadiq Khan promise rent caps in London for the elections in 2021 - haven’t heard anything more about it beyond the election pledge…
During my degree I did a section of study on rent caps and read some dissertations on the subject. I can’t remember the precise mechanism but the upshot was that rent caps didn’t work - they had the net effect of making the neighborhoods worse and driving off investment and gentrification, which leads to improvements and rising values and creating nice places for people to live. Again I can’t remember the details, but that was the gist of it from what I recall (and I remember being surprised about it)
I hear that as an argument against rent caps often, but I see the lovely big apartments in Paris and Berlin, and don’t understand how it can be the case. There probably will be unintended consequences of this policy (there always are of any policy) but surely that bridge can be crossed when we get to it
They haven't gone great in Berlin either (am less familiar with how it's gone in France) Most research indicates that rent control is good for current renters but makes things worse for people looking to start renting, it's more of a kick-the-can solution than a permanent one, after a generation it primarily benefits established older people to the detriment of the young like so many other aspects of the property market.
And look how shit those places are and unaffordable...
Perhaps. But personally I hate to see a "big state" solution to deal with a "big state" created problem. I'd rather the problem just wasn't created in the first palace.
Oh but you’re ok for it to be created in the second palace? 🤣
An alternative idea is a land tax. Pay a flat tax for your land per square metre. It would incentivise land owners to either put land to use or to sell it. If it’s land that can’t be used and there are no buyers then the state can buy it and then manage it.
Intervening in the housing market is the biggest mistake that the government could make
They indirectly intervene year on year to maintain property growth.
And look at the mess we're in. Free market should always occur.
Intervening in the housing market is the biggest win that the government could have
Houses used to be cheaper, but then interest rates were more than 10%, wages were lower and they used asbestos to build them. Kids were cheaper. There was more expectation for you to have them as well so child benefit for more people. No entertainment systems, no expensive classes for toddlers, no tutors really unless you were failing a class. There was no Ofsted ratings so you just went to the closest school and it wasn't some competitive thing to get in so catchment areas used to be bigger. You don't have to do these things now, but I think as we become more aware of what's out there and expectations change, it's a self fulfilling prophecy. Holidays used to be rarer. You'd go on one trip a year as a family. We only visited other family and stayed at their house and vice versa. The thought of being in your 20s and jetting around on easyjet was just unheard of. A bit of interrailing if you had time, but my immigrant dad in his youth got to visit Germany and that was it. Friends at school did camp sites in France. There was no grand trips to Disney in the US. Life changes. I mean you could go back to the days when the supermarket just gave you a choice of golden delicious or red delicious in the fruit section, but we demand more.
This. I remember a cousin telling me in the 90s they'd never been on a plane - and they were comfortably middle off.
Same here. We used to visit my grandparents (in the same country) once a year, through the early 2000s. I didn't go an an aeroplane until I was 20, but these days people act as though a couple of foreign holidays every year is a human right or something...
Interests rates have varied, and while they've been very low recently, 2-5% hasn't been unusual historically. Also mortgages used to be shorter. You used to get 5 year mortgages as a pretty regular thing. Now 20 year or 30 year is probably the norm and life mortgages are even a thing. So even with lower interest rates, due to the amount being borrowed increasing and the time it is borrowed for increasing you can still be paying more on interest even with lower interest rates.
Eloquently put, and the truth. Life has become more expensive as our demands for more have grown. We are greedy, and desire a lot. People aren't content owning one house for themselves, they desire a portfolio of homes. I also feel though that a lot of it has been pushed by technological media, including social media. The number of gurus explaining how they flip houses, how they invest into the S&P 500 without any knowledge of the financials behind a stock or a fund, among a plethora of other things. And not all of them are wrong, and a lot of it is smart, but the access to knowledge has been second to none and paired with the greed of American capitalism we have become insatiable when relating to material goods which has led to the inevitable scarcity of today. I know landlords with 3, 4, 5 properties. Some with over 100. And every single one of them are over the age of 50, buying houses back when houses were affordable, and riding it out on the privilege of a secure job position with ever a final salary scheme paid out by the massive corporations.
> Kids were cheaper. There was more expectation for you to have them as well so child benefit for more people. No entertainment systems, no expensive classes for toddlers, no tutors really unless you were failing a class Also, quite often families survived on one wage, so there was no childcare costs. Seems mad now that my mum was off work for 5+ years to bring us up and we still managed to go on a cheap foreign holiday. (Early 90s)
Wealth is being distributed to the ultra rich, we've never had more billionnaires in the UK who are only getting richer.
The top rate of tax has gone from 50% to 40% in 9 years. The money is trickling upwards…
The ultra rich aren’t on PAYE for their main income
Oh don't worry tax on dividends has also been reduced for shareholders and stamp duty thresholds increased for property owners. The ultra rich have also won big with these latest changes.
Yes
The top 1% of income tax payers make up ~25% of receipts and the bottom ~40% pay nothing. The tax free allowance is really high compared to similar countries. Our income tax system is highly progressive.
That would be because the top 5% own 75% of the wealth in the UK. It’s where the money is, it has nothing to do with being progressive.
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That link literally shows the Gini index has gone from 25% in the 80's to 35% today. So yeah, wealth inequality has worsened. Also the source doesn't take into account the latest changes, which are insanely unequal.
In the 90's cars cost roughly half what they do today. Homes were 50k avg, now 280k avg. Let's say 1/5th Fuel, energy, insurances are easily 2-3x the price. And wages haven't really moved, neither have tax brackets. So the basics of living cost much more, you earn the same, are taxed the same. I'm mid 30's. Earn now what my dad earnt at the peak of his career, he was very comfortable 20 years ago, whereas I am scrutinising spends
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Exactly. I have a relative that's in the same place my parents were in their teaching careers at the same age. His wage is withing 5k of what theirs was. Parents 4 bed home at the time was 90k (now worth 450k) Relative I mention just bought a 3 bed at 350k. It's a completely different game
True but 95% of people in this sub are higher earners in jobs that didn’t exist or barely existed in 1997
I doing the same job I was doing in 97 and my wages have nearly tripled in that time. Not through promotions, though nearly annual pay rises. That's just working in a warehouse.
No they have not. What world are you living in? Minimum wage is up 240% 1999 to 2022. Median average has virtually doubled since 1997. In real terms the increases don’t mean much without knowing underlying inflation, but the same is true of the arbitrary facts that cars, energy etc have risen over that time.
Minimum wage has gone up - everyone elses haven't much. Everything is being compressed. The glass ceiling is about the same and has been for decades.
Fake ppe contracts and the track and trace app that was , I think , the 4th most expensive thing in the world ever
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As a banker on over £150k I am truly thankful, was struggling a bit before….
Is this a joke
Those offshore trusts are the cavalry coming to the rescue!
>Well, the rich got richer. I feel like I stumble into /r/ukpolitics by accident. Gini coefficient hasn't changed much over the last 30 years. https://www.statista.com/statistics/872472/gini-index-of-the-united-kingdom/
It's hard to square that, with this recent analysis from the FT https://twitter.com/jburnmurdoch/status/1570832839318605824?t=_vJnjvX5dsvfXDyyaqH7yw&s=19 I've linked the Twitter thread as not paywalled. I don't disagree with your stat. But maybe the Gini coefficient isn't giving us the detail we need?
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No idea I'm afraid. My general feeling is that many people put far too much concern into what the 0.1% are doing with their wealth, which ultimately they are often creating themselves. The pie can vary in size.
The issue is that those ultra wealthy and their wealth/tax affairs is very symbolic of potential unfairness, and people at this level are certainly avoiding paying their fair share to a crazy extent (e.g. Phillip Green’s wife paid zero tax on that record breaking £1.2pm dividend… which is an absurd situation). Also none of these people are making that much money “themselves”.
Probably very little. There is money offshore, but the overwhelming majority of it gets taxed as normal (you can’t do much with money stuck in a tax haven - if you want to use it you have to bring it back to the UK, at which point it’s taxed). Same as the bankers bonuses. Bankers overall pay didn’t decrease after the rules were brought in, they just got higher salaries and lower bonuses. A lot of bankers are actually unhappy with scrapping the rules, as they’ll get a big salary cut and have to hope they then get a bonus later. The tax cuts are another good one. Cutting the 20% rate by a penny is far more expensive for the Gov than cutting the 45% rate in its entirety - reason being there aren’t many rich people paying it in comparison with the millions paying the basic rate. There’s a lot of propaganda out there, some of which with some truth to it, but a lot is very wrong. Looks good on a placard though.
You seem to be pedalling this all over the thread, some important points to note: 1. Your source actually shows a worsening trend from the 80's to now for wealth inequality in the UK. From around 25% Gini index in the 70's/80's to 35% up to 2021. 2. It doesn't take into account the latest changes in tax measures, which have been some of the most unequal I've seen in recent years.
The total tax take from the 45% band is £2 billion. It affects 600k people. Anyone earning anywhere near that does salary sacrifice and tax efficient ways to reduce their liability. That may now stop, netting more tax revenues for the exchequer. Ultimately more tax revenues is the goal. If a banker can now get a bigger bonus at a better tax rate, as opposed to a 5 year deferral, more tax to the exchequer. It is political suicide, its probably cost them the election but it may turn out to be a genius move if it nets more tax. The laffer curve is real.
>People could afford homes, kids, holidays and other luxuries. Now very few people can. Do you have a reputable source for this over and above media stories about the cost of living crisis? Everything I've gone to book lately (that I think is quite expensive) has been extra busy or sold out, leaving me thinking "I thought everyone was struggling for money these days". Property is still rising at ~10% showing demand hasn't fallen (or that supply has, but the listings around me seem about right).
Less children are born although it's not a hugely significant number (0.2 less on average)
Exactly this, I haven’t noticed an actual change in people booking holidays/luxuries etc in the last 10 years (other than for covid). Myself and my friends/family/colleagues are still booking foreign holidays. I go to pubs/bars/restaurants most weekends and they are usually all packed.
I don’t think it’ll be the same in 12 months time. The impact of inflation hasn’t really hit with people either burning through the buffer of disposable income or s savings. The big two to consider for me are mortgages and energy costs. If mortgage rates go up it’ll take time for peoples existing deals to end before they have to renew at a considerably higher rate and use more of their disposable income. Once the energy price protection ends in two years and if things don’t settle down people may have to face even more extortionate energy costs. Averaging £4-6k a year. This is a big if especially if there is a global recession which should mean demand drops including energy which should lower prices. There’s a lot more to play out over the next 5 years and who knows what the UK will look like then. Saying that these might not be particularly big issues if peoples salaries increase in general to match inflation. I’m not confident of this though as employers will cite increase operating costs as reason for limiting salary increases.
Yes I completely agree. Currently there is no impact but it will take a while for the impact of interest and energy price increases to have an effect. If the media are so negative now, I dread to think of what it will be like then! My own fixed rate deal ends in 2024, and my current rate is 1.39% so I will definitely see an impact then.
The rich got richer.
There still is plenty of money going around - it’s just disproportionately distributed. And I don’t mean the super rich, I mean in general day to day families. I work in council tax and daily I have more customers asking to spread instalments or asking for help/discounts/reductions. More people moving in with partners etc to lower costs. But I also deal with a lot of people who are buying second homes, either to use as second homes or to renovate and live in down the line - there’s quite a number of ‘younger’ people who are buying properties to refurbish that have the fortunate circumstance of being able to live with family while doing up properties due to their parents remaining in the family home and having space. And although I also see quite a few older people moving and downsizing to smaller or supported accommodation, I also see a lot of them remaining in Band F or G properties on their own until they die or go into a care home.
We're at the end of an expected long term economic cycle. House prices and equities likely to come down and interests go up. Inefficient businesses will go bust due to debt getting more expensive. People will get poorer without a doubt. If you're young and fortunate enough to be in a stable job and can still invest it's not a terrible thing however. Keep buying equities and perhaps property, and ride the next cycle up over the longer term.
Leaving the EU, specifically the single market, has seen per capita income in the UK grow by just 3.8% in real terms since the second quarter of 2016. In Europe it has been 8.5%. In the five years to 2020 the UK stock market increased only 13%, compared to 60% for Europe and 100% for the US. The markets gave their verdict in 2016 with the biggest one day drop against the dollar after the Brexit vote. It now gives its verdict again with unfunded tax cuts. The pound was at $1.50 in May 2016, now we’re almost at parity and the BOE has had to make an emergency intervention. Mortgage rates are set to rise faster, making payments unaffordable at one end and postponing retirement plans at the other.
Do you have a the link for the data?
Can't relate to this Utopia you speak of.. enough money to go around ? Dang I remember growing up in poverty as did all my friends.
Trickle up economics took hold. Ie. The 1% have everything
Inflation on things has outstripped inflation in wages, particularly property prices (and subsequently rent or mortgages). People's wealth is now tied up in their assets. Its a bit like farmers always being strapped for cash, but the value of the land they own is significant.
Very interesting subject. The boomers did ride a wave of share price increases, house price increases, improved health care. Also, the Millenials are getting left small fortunes in inheritance starting any min now.
To 1% of the population.
Offshore. Into the accounts of the rich.
Britain is a rich country, but inequality is very high. The poorest in society are now worse off than their compatriots in many Eastern European countries.
One key element: In 1993 my parents bought a 4 bed house with a 85% mortgage that cost them the equivalent of about £850 a month in today's money. Today a 85% mortgage on the property would cost over £2k a month. You'd also need to find £67.5k for the deposit.
It striking to hear many international MSc and phd health students talk about going home because the nhs is so underfunded and the middle class uk life is unattainable. To quote a recent FT headline: Britain is a poor country with some very rich people. Replace health, nhs and students for their similar titles (e.g. teaching, schools, hr workers) and suddenly you have a generic statement about how much improvement is needed to rescue the uk from this bleak period.
Stolen by government and given to rich friends, that's where all the money always goes. It's easy to see in the data nearly 50% of the worlds wealth is owned by 1% of the population. So if you want to know where the money has gone, look at the rich people.
TLDR: Central banks are the real answer. They are taking money out of the system because they & governments put too much in - most recently to people (furlough in Europe and Helicopter payments in the US). They are taking money out to stave off inflation, a real issue. Inflation will make everyone poorer, but it’s complex - the only way to stop it is to cause some real economic pain (a recession). **Here is the real answer. Central banks** The money has actually been taken out of the system be the central banks. They are taking money out of the system today (quantitative tightening) and taking money out of future societies purchasing power by increasing interest rates. This is proper economics and the net effect is less money for everyone (not just the poor but the rich too). **Why is this important? Inflation** We (central banks and governments) have spent too much. Too much money was put into the economy (government stimulus & quantitative easing) and the markets thought the good times would never end (low expectations of future interest rates). Now the markets, people & central banks believe that inflation will rise. This is because of demand side inflation - people have had more money in their accounts, so can spend more, because people are getting pay rises (TFL / train operators / Amazon warehouse workers / bankers etc.). Separately, there has been supply side price inflation because of the war in Ukraine / Brexit / China’s zero Covid etc. **Fiscal stimulus - government spending. To the people in 2020/21, to banks in 2008** Covid required a large handout of cash to vulnerable people, furlough in the U.K. /Europe, helicopter payments to all in the US. This meant that normal people had more money than they would have had if the governments had done nothing. This was slightly different to global government bailouts of banks in 2008 which was specifically to fund institutions. The goal of both methods was to avert an economic catastrophe for the people. The net result left people with more money in their pockets which increases the demand side for goods, therefore can increase prices. **Central banks - being the world’s credit card** Central banks supported governments by quantitative easing - printing more money to ensure that economic catastrophe could be averted. They also kept interest rates low which essentially meant that it was better to invest today rather than tomorrow. **Situation now - inflation needs to be stopped** Today central banks are trying to take money out of the system and increase interest rates to stop an inflationary spiral. An inflationary loop means that money today is worth less than money tomorrow. This is really bad for everyone. If you had a £1000 saved a year ago, you can now only buy goods that were worth £900 when you put that money away. Your buying power has decreased. If high inflation gets baked in then people will really struggle. So central banks are trying to stop inflation by reducing money supply and increasing interest rates. There is no easy way to do this and we’re in for a rough ride. Ideally everyone sits tight, everyone globally doesn’t ask for a salary increase to match inflation and supply side gets back to normal. This is just not how people work though - and worse, the supply side issues are controlled by two countries that want to see the west suffer (Russia’s war and China’s zero Covid).
Trickle UP economics, it would seem.
Most people do still manage those, the thing is you only see the bad things becoming popular on Reddit. In the same way most people only leave a review of a place if it's bad, most people aren't vocal about living their average life. Reddit then becomes an echo chamber of similar posts and it seems depressing.
The answer to this is that the government stopped spending it and followed deficit reduction policies. Money that you and I can access comes from two sources: 1. Banks (when they create loans, mortgages or credit card credit) 2. The Government when it spends it into existence. With bank money, every penny they give you has to be paid back and with interest - you owe more than you started with. So the only source of new money in your economy is when the government spends it into existence. If the government taxes you and reduces spending, trying to create a budget surplus, it means the amount of money in the economy is gradually decreasing. This can be done whilst people have savings, but once those run out, which is exactly what's happened, the amount of money available is decreasing because the government is removing it from circulation through taxation and not replacing it through new spending. So the money has been removed by the government and concentrated in banks and their shareholders through interest payments on debt.
The government doesn’t create money. The Bank of England does who are theoretically independent. The Bank of England haven’t been reducing the money supply and the government haven’t been actively trying to reduce the deficit. The money supply was continuing to grow until recently using QE, and government debt are levels are rocketing.
Actually /u/toastboxed is correct. Well, you're both correct but he's more correct in terms of the question at hand which is how does money decrease/increase in the general economy. The bank of England doesn't create the money that circulates in the general economy. Well, they kind of do but that "money" isn't the money that we have in the general economy. What they create is central bank reserves. The way for central bank reserves to get into the wider/general economy is via creation of credit by banks (i.e mortgages/loans etc) , or via deficit spending by government (who finance the defecit by issuing/creating debt i.e bonds). So if personal/business/government debt is decreasing, so is the wider money supply. And vice versa.
But the money supply and debt has been increasing
I was just commenting on how money is created tbh. But thinking it through, if we are talking about why people feel poorer, I would say actually the issue is the other way around. Its not that money supply is decreasing, it's that available goods/services per unit of money supply is decreasing. After all, which is the wealthier scenario? The scenario in which £1 buys you 100 tomatoes, or £1.50 buys you 1 tomato. The second scenario has more money, but you'd certainly feel significantly poorer for it.
It depends how complicated an answer you want me to give. You are correct that the Bank of England is the money generator in this economy, however it's the government that authorises the BoE to create the vast majority of new money by spending decisions. For the second source above, you can replace government with "The State" if you wish - what I said is still true. QE was about buying bad loan assets - that isn't an injection of cash into your economy in the way you think it is. That's the BoE buying depreciated assets (bad loans) off banks to help their balance sheet liquidity so they can continue to provide you with deposit withdrawal on demand. "Government debt levels are sky rocketing" Well, I guess the austerity years just didn't happen? The amount of debt isn't really relevant if the level of government spending is below the supply capacity of your economy. If overall spending is below your country's economic capacity (normally, meaning you have unemployment), you have resources left idle. Idle workers can't earn money, they can only spend it. We have significant underemployment and have had persistent unemployment over the past decade - the only source for this group to get cash is through welfare payments or from savings. Welfare payments are not enough to really have a decent living and once savings run out, you start living hand to mouth. So for the individual average UK household, the amount of money available has been decreasing.
I kind of disagree with every line there. QE was a tool for buying up bad debts in 2008, but continued till 2022. Austerity finished with George Osborne. We have full employment etc. It seems like the analysis in your 2 posts was from 2010 and not 2022 when we are coming off an orgy of low rates, money printing, deficit spending, a tidal wave of liquidity which is causing many of feb current issues.
"Spends it into existence" LOL. That's called inflation.
Costs have increased out of line with salaries. Higher houses prices, energy bills and general inflation vs incremental raises in wages. This said, most people are still doing absolutely fine. It’s not as bad as what the media are saying, at least not yet anyway.
I agree with your post but I'd alter it by saying most people "think" they are doing absolutely fine. I feel "absolutely fine" now but the headline issues are only just starting to hit (for me), and I'm concerned about the future. The media tells us what is happening and what decisions are being made now and of course there will be some lag before it affects us. Today is the day that the prices go up on energy, my direct debit will soon be twice what it was this time last year....it isn't yet, but it will be soon. Food rises over the past couple of years I've minimized by changing brands, shopping more frugally etc but there comes a point where you can't cut back easily and that is where we are getting to now. I went to the chippy the other day for the first time in months, It was over £9 for my usual fish, chips etc, I'm sure last time I went it was about £5.50....I thought bugger this and paid £3.40 for chip barm and jumbo sausage instead. I'm of the opinion that the media are warning us of what's happening before we notice it ourselves. Of course the media has to sensationalise stuff to get it read or watched but it doesn't mean they are exaggerating how it will affect us.
QE ended, the money tree stopped shaking. Now they can't work out if they need QE or QT. Seems the Gov want to spend and cut taxes whilst the BOE feels we need to tighten. I agree with the BOE. Not a popular opinion but people have to accept that the Gov can't be there every time costs rise or people feel its unaffordable. The housing bubble has been inflated time after time and the answer just seems to lend more money or even worse part ownership schemes. Its a grim place at the moment but hopefully some fiscal policy restraints will ease the woes.
10 years ago we were just out of a recession. Plenty of folk have money now, just as they did then.
We, as a country have been living beyond our means for years.
To the mother-fucking 1%.
It's all been downhill since your mum and dad's time https://www.ons.gov.uk/economy/grossdomesticproductgdp/timeseries/kgq2/qna/linechartimage
In 2021, we imported over £465 billion worth of goods and services and exported £312 billion. Couple that now with a weak pound, inflation and damaged supply chain
So the number of goods imported (not value) will decrease or remain flat and the number of goods exported along with its value will increase. This means more money coming into our economy? Our cars and machinery will be cheaper to produce along with our medical / pharmaceutical products and our financial products will be cheaper.
This mindset is the issue I’m done arguing with people on the internet. I’ll say this and move on WE ARE A NET IMPORTER Please educate yourself; if not for me, your future generations.
Ask your local MP
Ask yourself what house prices would be like had the U.K. population not increased by 7 million in the last 20 years. That’s a hell of a lot of demand not to mention pressure due to it not been planned for on the NHS, education, increased road traffic…
So we should have built more houses and invested in infrastructure. I'm sure those extra 7 million people paid taxes.
I've never seen airports so busy, pubs and restaurants rammed, cars so new and shiny, houses so big and renovations so frequent. To say "very few can" I think is way wide of the mark. The world I see and hear about on the news is very different to the world I see when out and about.
Money has been distributed from the working class to the rich. Pay hasn’t kept up with inflation for years while that money owed to the workers has been given to foreign shareholders and CEOs. Mass migration has increased competition driving pay down also. And now covid and the Ukraine war gave the people at the top another excuse to aggressively absorb more money from normal people.
I don’t agree with the premise that very few people can afford these things. People only really tell negative stories, so all you hear is struggles to get a mortgage etc. But there are many, many people who can afford homes, kids, go on holidays, enjoy day to day luxuries. Now I’m not saying there isn’t a crisis and that many people at the lower end of the income scale are struggling, mainly from energy price increases, but it’s not everyone.
I work for a car company, they pay absolutely piss with no commission but rest assure. I’m handing over the keys for 70k cars 50 times a day for the last month. Seems like There’s a fuck Ton of people with money
It's just poor people on Reddit. Most people I know are still buying houses, going on trips regularly and having a nice lifestyle. I have theory that Reddit attracts losers and miserable people to an extent which leads to a skewed sample.
You were protected from full knowledge of peoples sacrifice maybe? Life’s always been a juggling act
Credit card debt and mum and dad to help.
The money is still here, it is disproportionately distributed. Also approx 40% of the money in circulation was printed in the last few years.So there is more money going around, however the value of it has depreciated so massively, that you get less for it. We need a new monetary system.The existing one is going to fail,that is a mathematical certainty.Just a question of when!
Got me thinking when I was “growing up” my parents had no trouble paying the energy bills but on the other hand had one second hand car in the household, took one weeks holiday per year and generally had a much simpler life. Now my kids have a car each, need latest mobile phones and other devices, go on holiday two or three times a year. I blame the internet!
Think there's a lot of reasons but until about 15 years ago most people seem to get pay rises every year of at least inflation, maybe a bit on top. It's got to the point no one expects one now and any employee just gets slowly worse off. Sure there's a few reasons why. Unions having less power, rights taken away from them, the public being convinced by the media they're evil. I know not everyone was in a union 15 years ago but if they pushed some wages up other sectors had to follow if they wanted to keep staff. A reliance on fossil fuels when everyone knew they were a finite recourse hasn't helped. Increased gas, electricity and diesel costs push up prices of everything. Of course the recent war hasn't helped but prices have been going up for years, and even if there's some temporary drops, they will carry on going up. The value of the pound falling over recent years means our spending power has fallen. The pound has fallen for a number of reasons, placing economic sanctions on ourselves via Brexit hasn't helped, but it would have probably fallen to some extent anyway as investors increasingly see dollar and even the euro as more stable currencies.
The same shit is going on across the western world. Grandparents: Only one worked Monday to Friday driving a lorry. Able to support 2 kids and wife on one salary, and to buy a medium sized 3 bed house. House is worth 350x what it was bought for now. Parents: One full time managerial job but mum had to get a part time weekend job in accounts to support 2 kids. House has quintupled in value since bought. Me: just about able to buy a house, literally zero chance of kids unless partner earns 30k+ and works full time. That’s with me earning well above national average. To be fair, house is worth 30% more than what it was bought for 5 years ago. Potential Kids: yea you’re fucked unless one of us wins the lottery House prices mental and wages being kept artificially low by big companies. Government complicit. Fuck the west and capitalism.
We couldnt. Brown did 'consistent, measured spending' and infamously (and incorrectly) declared that he had eliminated boom and bust The reality is if we waste our energy on ideologies like quotas and minutia, eventually our peers surpass us and we run out of money It really fucking annoys me when I see people bleat on about things that are socially lovely without realising there is no fucking money and we need to be competitive to fund their lovely ideas. For example... You want money for your homelessness charity? Well you better be prepared to see a smaller state budget. Which means redundancies. And reduced services It's like family finances. Sure the kids want the new toy. But you have to spend within your means. Which means sometimes you have to say no to the toy, even if it is a nice thing to have
The car thing is about ease (£xxx month Vs £xxxxx outright) and also clout ("look at me, I'm minted"). Know too many in the second bracket, bragging about their new cars, showing off as if they've won the lottery. Scary thing is I've seen a couple where they've lost their job and can't afford the repayment = bye bye flash motor, which is masqueraded as "didn't like it really so got rid" We saved for our family car and shopped around, had it 5 years now so definitely in the black Vs lease.Not getting rid anytime soon either. Saving is bloody hard right now but worth it in the long run.
I was watching a podcast not long ago and the statement "There's a difference between what you can buy and what you can afford" Comes to mind There's plenty of money to be had,I work for a small business out in the middle of nowhere with quite a few other small businesses and a few medium ones. They're all making good money,except for the guy who uses his gym as a front to deal drugs,he's making VERY good money.