Austerity. Who's got any money?

[Dave2002]

Prompted by a suggestion on another thread I thought we could open up a discussion here on who has any mpney,and whether the austerity programme is having an effect.

In response to frances' (iom) suggestion that 20+ year olds have money to spend I wrote:

Are the 20+ really major spenders in the current economic climate? In a recent trip northwards I made a remark to a family member that there didn't seem to be much sign of austerity, and was promptly corrected. I think some people, which includes youmg, middle aged and older are having a hard time right now, while others are barely affected at all. Where the 20+ group may be different is in the seemingly unthinking way they might spend - instant gratification versus long term, but even suggesting that is probably a vast over generalisation.

In some market sectors I suspect older people are actually bigger spenders. A few years ago I read that the average age of a Porsche driver was around 55-57.

Many middle class families are smoothing things out, by older members passing money down to sons and daughters - for example:

Buying them cars
Buying them houses or flats, or putting deposits down
Paying tuition fees
Paying off student loans
Bailing them out ...
Etc.

There always was an element of this, but the scale of transfers is surely much higher now. I had to work to buy an old banger of a car when I was around 21 - but now it seems that often new ones are 18th birthday presents. OTOH I didn't have to pay student fees or repay student loans.

Another family member who is financially astute has sugested that the current student loan arrangements are actually roughly equivalent to a 9-10% "graduate" tax for those who pay their loans back. This is based on an observation that the current interest rates for student loans are sufficiently higher (no longer an obvious "almost free" money supply for the better off) than previous loans that many who start to pay their loans off (kicks in at around £21k salary) will very possibly only succeed in paying off interest for quite a while. Some will get highly paid jobs and pay off early, but many won't. In the meantime, young people who do not have the support of middle class families may have an even rougher time, and some talented young people will not even take the chance on "better" educational opportunities. In some cases this is a great shame.

Teamsaint suggested a further discussion, see http://www.for3.org/forums/showthrea...062#post339062

[teamsaint]

here was my brief reply......



D2K+2, this might make a good thread elsewhere.

Just to show that there is a discussion to be had...re cars. Yes, you do see lots of 18 year olds in new fiat 500's . Certainly round here. They are the children of the top 10% (roughly) who continue to do well economically.

On the other hand, the recession and student fees has hit motoring hard. Driving tests are down 250,000 per year on the peak. Lots of driving instructors are giving up.
Many parents are having to decide between helping with astronomical tuition fees or driving lessons. Sending your child out into their first (probably poorly paid) job with £50k plus debt is a very scary prospect indeed.

[Petrushka]

New car sales have allegedly soared by 12% from September 2012 it has been announced today, but the way the dealerships manipulate their figures is to have dozens of cars registered to themselves. Ethics and the motor trade never did go together. Dishonesty rules.

[Dave2002]

Many parents are having to decide between helping with astronomical tuition fees or driving lessons. Sending your child out into their first (probably poorly paid) job with £50k plus debt is a very scary prospect indeed.

Times have changed. I did get a car fairly early on, which as I already said (somewhere on these pages ...) was even then a bit of an old banger - a Morris Minor with a split windscreen - in the 1970s. It was not necessary, and I bought it myself with money I earned from working. I bought it because I thought driving would be a useful skill, and it would be useful to get around. However, many others did not have cars, and it was possible to function seemingly quite well without one, as we thought public transport was adequate at the time. Indeed, when my first car went into terminal decline, before being sent off to car heaven, I gave up using it, and I remember spending quite a lot of time travelling to concerts by train several times a week. It was not an imperative that I replaced the car immediately by another one.

Whether public transport really was adequate is questionable, but it was accepted, though it pushed me into air travel out of curiosity, as I discovered at the end of the 1960s that I could get cheap standby seats on flights to the north from LHR when all the trains were full - the fares were no more, and I could get around much quicker than by train, and have a seat to boot. I even tried extending weekends to Monday morning, as in one job I figured that I could get to work by plane after a weekend, and still be at work in time.

The acceptance of public transport was not without grumbles though - we knew it wasn't perfect - or even very good at times, but it was adequate for expectations. Another reason why public transport worked well enough was that it wasn't an expectation that everything would be done in a very short time. Meetings for work might frequently have required an overnight stay rather than trying to travel to and from a venue in one day. The pace of life was arguably slower, though if one considers the rate at which traffic moves round the M25 today, one can seriously question this.

I did not expect my parents to buy me a car, or a replacement for my first when it died. There was no question of my parents having to make a choice between buying me a car or tuition fees. They paid for neither - not directly, anyway.