the fortunate generation

We are the fortunate generation

Are boomers (born between 1946 and 1964) the fortunate generation?

I suggest that is true – we escaped the carnage of World War 2, enjoyed relativly full employment and affordable housing costs. We’ve been able to receive a University education, travel, emigrate and fund a reasonable lifestyle. Will those that come after us be so lucky?

Of course, these benefits have not be universal – not everyone has been so fortunate as to receive these benefits. But generally speaking today’s pensioners have never had it so good. And never will again.

Looking back

It’s easy to look back, and the evidence is right there in the history books. My father fought in World War 2. Maybe not fighting so much, as he was not on the front line and I only know of photographs of him in an RAF uniform, somewhere in Germany. Nevertheless, his education and upbringing were influenced by the war – poverty, rationing, National Service. By the time I came along, the war was a memory and people were living peacefully and able to build their lives.

My father was lucky too – he bought his own house in the 1960s, had a stable job and good health. But money was still an issue for him, there was no foreign travel and not much excitement in his life. If there was, he kept it to himself.

Pensions – past, present and future

My father worked for the same company for 25 years, and drew his pension for 15 years. It wasn’t generous, but it was guaranteed and not subject to the stock market variations or scammers. It too have been fortunate, although my sources are more varied and I have made some investment choices.

My newspaper this weekend contained an interesting article about final salary pension schemes – the ones that both my father and I have enjoyed. These schemes are disappearing, being replaced by defined contribution schemes. The article claims that “the average man retiring this year will have an annual income of £14, 634 and a woman £10, 042. These figures include the state pension. (Source: The Times Money 24 April 2021)

Compare that to the Which article – how much do people spend in retirement? The estimate that households spend around £25,000 per year on basic expenditure and some luxuries. But the basic element was £17,200, some way short of the estimated income and based on the assumption that your mortgage costs are low or your rent is stable. It also ignores major costs such as replacing a car or funding some health issues – hardly luxuries.

Housing – then and now

A new bungalow in a leafy suburban town cost circa £2,000 in 1960. The same bungalow sold for £132,000 40 years later and will have increased in value since. According to Homebuilding.co.uk the average asking price in the UK is £327,797, and there are great swathes of the country where first time buyers cannot afford to get on the property ladder.

Unless something changes, future generations will be renting in retirement. Of course, renting has advantages, but most seniors desire stability and certainty in their twilight years, not to be susceptible to a landlord rent hike.

And for those who do secure their own home, paying for a mortgage when your earning capacity stops is no fun either. One in six homeowners will be paying off their housing loan from their pensions or savings.

According to Sun Life “if you still have a mortgage to pay, unless you know you’re expecting a really good pension, you’re going to have to keep earning for a while” Which means no retirement. If you are in a job involving physical labour, a long commute or workplace stress that’s not a great way to spend your later years.

Travel

Cheap air travel has enabled my wife and I to see some amazing places and have memorable experiences. Our first cruise docked next to St Marks Square in Venice – environmental concerns won’t allow that to happen again.

Affordable long distance flights were a privilege not available to previous generations, and perhaps not to future ones either. Aside from those environmental issues, the pandemic will have as yet unforeseen consequences for remote holiday destinations. In the UK the staycation is popular for 2021 – will that will be the standard for years to come?

Deckchairsdepositphotos 202564260 L 2015

And of course, thanks to Brexit, UK citizens can no longer live, love and work in 27 other countries. The prospect of escaping to a Mediterranean villa for the winter has disappeared, replaced by a plethora of rules, regulations and bureaucracy.

Shopping

The beautiful City of Chester had a vibrant shopping centre, the major stores existing alongside local and independent shops and supported by tourists attracted by the historic sights. Those sights are still there, but a lot of the department stores have gone and there is the depressing atmosphere commonly found in 2021. Footfall reduction affects those independent shops, restaurants and other attractions, so there is definite fear for the future of our High Street.

It is likely that the future of shopping lies online. The ability to pop to the local hardware store for a small but significatn household item has all but disappeared, replaced by scrolling though pictures on Amazon and studying reviews for hidden clues.

It is a different experience and we can’t halt progress, but the ability to feel, touch, measure and hold prospective purchases seems to me to be preferable than what will now be on offer.

Health

There is some good news – we are living longer. A male in the UK can expect to live to 80.2 years – up from 66.8 years in 1950. The worldwide trend in longevity is evident too:

Life
Source: https://www.worldometers.info/demographics/life-expectancy/

Conclusion

Are we the fortunate generation? Forecasting the future is a fools errand – we can know the past and recognise the present, but what happens from here on can be affected by pandemics, economics, climate, politics – any number of variables.

But the evidence seems to point to the current senior generation as the ones who never had it so good, and never will again. It seems important to recognise that and be grateful for it.