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Home > Opinion > Hal Austin

By Hal Austin | Published Mar 29, 2012

Think of the children

The fact is that almost everything that has happened to the economy since the 2007/2008 banking crisis and following recession has a built-in bias against young people.

In policy terms, the mortgage market review is explicitly focused against first-time buyers and shifts buying power towards the buy-to-let landlords; the shift from defined benefit pensions to defined contribution; exemption from national insurance; to mention but a few.

Further, the old, no matter what their personal circumstances, get heating and Christmas allowances, free travel, free television licences at the age of 75, and many other age-related benefits, which the young can only dreamed about.

If we are all going to share the pain of economic recovery, then that must go across all demographics.

The reality is that those baby boomers have enjoyed the greatest social advantages in modern history. Yet, when the chancellor put the brakes on personal allowances for the over 65-year-olds, one almighty row has erupted.

In a remarkable example of selfishness, these over 65-year-olds would prefer if the young, working parents, single parent families, and younger, hard-pressed workers continued to pay higher income taxes. It is true, that the long-period of low interest rates have effectively penalised savers.

But even so, although low interest rates should make accessing mortgage loans more achievable, the reality is that the regulator is applying enormous pressure on mortgage lenders to be more ‘prudent’ when lending. The likely victims of this policy are first-time buyers and young families, now struggling to get a foot on the homeownership ladder.

The introduction of the flat-rate state pension, despite its faults, should go a long way towards rebalancing this perceived, if incorrect, wrong.However, it is in the government’s response to the Dilnot report that the real punitive funding responsibilities will be imposed.

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Confidence overflowing

Light is now being shone on the global economy, with the eurozone crisis easing or at least going on the back burner.

The technocrats now running Greece and Italy have gained the confidence of Brussels – and more so Frankfurt.

Jobless numbers are coming down in the US so much so that Barack Obama is taking time out from the campaign, so confident is he, that the economy will be the great influence when American voters enter the voting booth.

Some experts, including the Economist Intelligence Unit, now predict global growth of over 3 per cent, with developed markets all showing signs of growth, unthinkable just a few weeks ago.

All these combine to make our supplement on Global Allocation so timely.

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