The phrase look after the pennies and the pounds look after themselves is very true.
As I pointed out earlier in this thread - that's just not true when it comes to housing for many people. When the prices are rising faster than you can possibly save, i.e. at a multiple of wage rises, no matter how hard you save you will always be priced out.
Let's put some more numbers to this, only ball-parks mind so there's scope for adjustments if you have more accurate examples to hand.
Here's a house in my road.
Let's say I start saving in 2003 and I'm earning £30k a year (above the national average and certainly more than I was earning at the time). I would need a deposit of around £30k (based on today's standards). So that's my target.
A salary of £30k gives me ~£2k a month after tax. You're likely going to be spending roughly 50% of that on food, bills and rent so lets assume a maximum monthly saving of ~£1000 (assuming no student debt and no pension contributions). In reality that's likely to drop to around £800-900 when you take in all the weird things that happen (cars exploding, electrical goods giving out etc..) for simplicity lets just set that to £850.
So it'll take me about 3 years to save a £30k deposit. Dead easy, right? 3 years scrimping and saving, no problem at all.
Big problem. In those three years the house price has gone up £22k. So now (again, according to today's standards) I need a £50k deposit. That adds another 2 years before my deposit is large enough.
Guess what's happened in those two years? Yeah, you know how this ends. This hypothetical me would get there in the end, I expect it would take ~9-10 years to catch up assuming a linear price rise and that I've managed to continually save £850 a month, i.e. in that ~10 years I've not lost my job, my car hasn't needed replacing/major works, my landlord hasn't hiked the rents/kicked me out, I haven't had a child etc..etc..
Now add on a student loan and pension contributions. That knocks £200 off your take-home pay, again, pretty obvious what effect that's going to have. In fact adding student loans adds another dimension to this as it means I won't start this process until I'm ~24. That means, even in this perfect scenario, I won't be in what would have previously been considered a 'stable' position until I'm well into my 30s. That's a whole other side to this subject....
Yes, there are exceptions, there are many parts of the country where the 'national average' wage will be enough to get something but we can't all live in those places be it because we need to be near family or because the industry we work in simply doesn't exist in those parts of the world.
They wanted to start at full pay immediately yet most have never had a job in their life.
I fully support apprenticeships, I think for many jobs it's by far the best start to the career path. However, the statutory pay rate is abysmal - £3.90 p/h, what's that £8-8.5k a year? That's a real challenge if you don't have a full support network behind you. If your guys are paid more then good on you, as long as you're replacing the retirement rate for the field you're in then the high attrition rate is probably no bad thing!
Wow, talk about 'thread drift'!
Sorry, I'll take some of the blame for that!
Edited by Icey, 22 June 2019 - 10:56 PM.
