how are Brits so poor yet the country is damn expensive?

[Anonymous]

Anonymous wrote:

Anonymous wrote:They don’t have to pay for or even consider saving for things like:

Healthcare
A pension
Transportation (you do not need a car)

Jobs have job security and guaranteed vacations. Paid maternity leave. Also very cheap to holiday in europe. Council estates gor the poor. Etc.

This.

My spouse is British. Their sibling is retired in the UK. They live comfortably in a hcol city (not London). They generally don't pay for their medical care ( she just had a mastectomy due to breast cancer and paid nothing for it) and don't need health insurance. They walk into town mostly to run errands. She takes vacations with her friends quite often.

Their college costs are not insane like in the US. It's true that they don't eat out often but when they do, they don't tip.

One of the siblings works a low wage job, but they are still able to take vacations and have enough to live on because they don't pay for healthcare and worry about saving for it.

We are ready to retire now but for the cost of healthcare.

Yes, college savings, retirement and healthcare are about 40% of our income and we aren’t even maxing out!

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They don’t have to pay for or even consider saving for things like:

Healthcare
A pension
Transportation (you do not need a car)

Jobs have job security and guaranteed vacations. Paid maternity leave. Also very cheap to holiday in europe. Council estates gor the poor. Etc.

This.

My spouse is British. Their sibling is retired in the UK. They live comfortably in a hcol city (not London). They generally don't pay for their medical care ( she just had a mastectomy due to breast cancer and paid nothing for it) and don't need health insurance. They walk into town mostly to run errands. She takes vacations with her friends quite often.

Their college costs are not insane like in the US. It's true that they don't eat out often but when they do, they don't tip.

One of the siblings works a low wage job, but they are still able to take vacations and have enough to live on because they don't pay for healthcare and worry about saving for it.

We are ready to retire now but for the cost of healthcare.

It’s simply not true that this applies to all of the US. Plenty of US states have low cost flagship universities. Only a few states, typically in the northeast and DC, do not.

Also most employed workers have access to employer provided health insurance.

My point is that the European claims that the difference in COL is made up for my high healthcare costs and college simply isn’t true.

Employers try to make people part timers to not pay benefits. And more and more employers subsidize the cost for the employee well, but not for family, so plans can be very expensive even through employer. It is getting worse each year.

We pay $4,200 a year in premiums with high deductible, which is low for a family in my experience. Some years it works out ok, others like this year we add an additional 5-7K due to high deductible

[Anonymous]

Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

[Anonymous]

Interesting article on student loan debt in the UK. https://www.bbc.com/news/articles/c2xxp2gv4d1o

[Anonymous]

Anonymous wrote:Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

Why doesn’t it make sense? House prices are purely supply and demand.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:They don’t have to pay for or even consider saving for things like:

Healthcare
A pension
Transportation (you do not need a car)

Jobs have job security and guaranteed vacations. Paid maternity leave. Also very cheap to holiday in europe. Council estates gor the poor. Etc.

This.

My spouse is British. Their sibling is retired in the UK. They live comfortably in a hcol city (not London). They generally don't pay for their medical care ( she just had a mastectomy due to breast cancer and paid nothing for it) and don't need health insurance. They walk into town mostly to run errands. She takes vacations with her friends quite often.

Their college costs are not insane like in the US. It's true that they don't eat out often but when they do, they don't tip.

One of the siblings works a low wage job, but they are still able to take vacations and have enough to live on because they don't pay for healthcare and worry about saving for it.

We are ready to retire now but for the cost of healthcare.

Yes, college savings, retirement and healthcare are about 40% of our income and we aren’t even maxing out!

Granted not paying for healthcare is a savings...but nobody in the UK is not saving for retirement and expecting to live a qualify lifestyle on just the equivalent of SS. Also...only a fraction of UK students can attend Oxford or Cambridge or Edinburgh and there are hundreds of mediocre state colleges throughout the UK that kids attend that are really no different than attending a regional public university in the US.

The main difference in college is that there are few private universities in the UK (a total of 74 in the entire country), so nearly everyone is selecting an affordable public option.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

Why doesn’t it make sense? House prices are purely supply and demand.

It doesn't make sense that a population with smaller (often substantially smaller) incomes than their peers in the US is able to buy housing that is typically more expensive than their peers in the US. That's it on the face value, but I also know it's typical to get much larger mortgages and mortgage-income ratios are also higher than in the US. It wasn't uncommon to get mortgages up to five times your income. But it's also not a healthy way to approach real estate and there's been no shortage of commentaries observing that the entire UK economy seems propped up by high housing prices.

Many more people also get adjustable rate mortgages to get bigger loans, which is why when there's a recession, far more foreclosures happen.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

Why doesn’t it make sense? House prices are purely supply and demand.

It doesn't make sense that a population with smaller (often substantially smaller) incomes than their peers in the US is able to buy housing that is typically more expensive than their peers in the US. That's it on the face value, but I also know it's typical to get much larger mortgages and mortgage-income ratios are also higher than in the US. It wasn't uncommon to get mortgages up to five times your income. But it's also not a healthy way to approach real estate and there's been no shortage of commentaries observing that the entire UK economy seems propped up by high housing prices.

Many more people also get adjustable rate mortgages to get bigger loans, which is why when there's a recession, far more foreclosures happen.

There are substantial income disparities in the UK and a shortage of housing due to the lack of construction and increased demand. For most of the 20th century, the majority of people rented and that only changed as credit became more widely available from the 1960s. However, younger people and poorer people still largely rent. 31% of 18-44 year olds still live with their parents. Private rentals increased from below 10% of the market in the mid-1990s to over 20% now. 28% of adults own their homes outright and most didn’t buy their houses at the current high prices. They have simply seen their value appreciate over time. So fewer people can afford to buy now - hence the surge in renting and steep rent costs - and those that do buy simply have deeper pockets or are willing to take more risk. Despite the excesses of the lending market prior to the financial crisis, lenders are offering multiples of 4.5-5x income although the Bank of England limits this to no more than 15% of lending. Unlike the US, you can’t walk away from a property when its value is under water.

People are kind of screwed either way. They have to spend a large portion of their income on mortgage payments or on renting as there simply isn’t enough housing. Or stay at home with their parents.

[Anonymous]

For those who think uni in the UK is cheap or free, lol:

https://www.reddit.com/r/AskUK/comments/rd6s8c/so_does_anybody_actually_pay_off_their_student/

https://www.reddit.com/r/UKPersonalFinance/comments/scpya5/7_years_paying_off_student_loan_and_my_balance/

https://www.reddit.com/r/unitedkingdom/comments/14asb4q/student_loan_debt_in_england_surpasses_200bn_for/

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

Why doesn’t it make sense? House prices are purely supply and demand.

It doesn't make sense that a population with smaller (often substantially smaller) incomes than their peers in the US is able to buy housing that is typically more expensive than their peers in the US. That's it on the face value, but I also know it's typical to get much larger mortgages and mortgage-income ratios are also higher than in the US. It wasn't uncommon to get mortgages up to five times your income. But it's also not a healthy way to approach real estate and there's been no shortage of commentaries observing that the entire UK economy seems propped up by high housing prices.

Many more people also get adjustable rate mortgages to get bigger loans, which is why when there's a recession, far more foreclosures happen.

There are substantial income disparities in the UK and a shortage of housing due to the lack of construction and increased demand. For most of the 20th century, the majority of people rented and that only changed as credit became more widely available from the 1960s. However, younger people and poorer people still largely rent. 31% of 18-44 year olds still live with their parents. Private rentals increased from below 10% of the market in the mid-1990s to over 20% now. 28% of adults own their homes outright and most didn’t buy their houses at the current high prices. They have simply seen their value appreciate over time. So fewer people can afford to buy now - hence the surge in renting and steep rent costs - and those that do buy simply have deeper pockets or are willing to take more risk. Despite the excesses of the lending market prior to the financial crisis, lenders are offering multiples of 4.5-5x income although the Bank of England limits this to no more than 15% of lending. Unlike the US, you can’t walk away from a property when its value is under water.

People are kind of screwed either way. They have to spend a large portion of their income on mortgage payments or on renting as there simply isn’t enough housing. Or stay at home with their parents.

Mass migration of the last 20 years badly skewed the housing market by flooding the country with low wage workers all chasing after the same limited supply of housing, so this also plays a role.

The income disparity is real. If you manage to make it to the upper middle classes and above, life is pretty nice. But if you're just middle class or working, you're worse off than your American peers or EU peers. Frankly, the UK was better off 25 years ago notwithstanding the 1992 recession because housing was much more affordable for most people. Between New Labour of 1997-2010 and the Tories of 2010-present, I do scratch my head as they have not made Britain a better country for the next generation but made things worse.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

Why doesn’t it make sense? House prices are purely supply and demand.

It doesn't make sense that a population with smaller (often substantially smaller) incomes than their peers in the US is able to buy housing that is typically more expensive than their peers in the US. That's it on the face value, but I also know it's typical to get much larger mortgages and mortgage-income ratios are also higher than in the US. It wasn't uncommon to get mortgages up to five times your income. But it's also not a healthy way to approach real estate and there's been no shortage of commentaries observing that the entire UK economy seems propped up by high housing prices.

Many more people also get adjustable rate mortgages to get bigger loans, which is why when there's a recession, far more foreclosures happen.

There are substantial income disparities in the UK and a shortage of housing due to the lack of construction and increased demand. For most of the 20th century, the majority of people rented and that only changed as credit became more widely available from the 1960s. However, younger people and poorer people still largely rent. 31% of 18-44 year olds still live with their parents. Private rentals increased from below 10% of the market in the mid-1990s to over 20% now. 28% of adults own their homes outright and most didn’t buy their houses at the current high prices. They have simply seen their value appreciate over time. So fewer people can afford to buy now - hence the surge in renting and steep rent costs - and those that do buy simply have deeper pockets or are willing to take more risk. Despite the excesses of the lending market prior to the financial crisis, lenders are offering multiples of 4.5-5x income although the Bank of England limits this to no more than 15% of lending. Unlike the US, you can’t walk away from a property when its value is under water.

People are kind of screwed either way. They have to spend a large portion of their income on mortgage payments or on renting as there simply isn’t enough housing. Or stay at home with their parents.

Mass migration of the last 20 years badly skewed the housing market by flooding the country with low wage workers all chasing after the same limited supply of housing, so this also plays a role.

The income disparity is real. If you manage to make it to the upper middle classes and above, life is pretty nice. But if you're just middle class or working, you're worse off than your American peers or EU peers. Frankly, the UK was better off 25 years ago notwithstanding the 1992 recession because housing was much more affordable for most people. Between New Labour of 1997-2010 and the Tories of 2010-present, I do scratch my head as they have not made Britain a better country for the next generation but made things worse.

That’s true, but if you’re poor, you’re better off than your American peers.

As a Brit living in the US, I think the US offers a much better quality of life for almost everyone except the poorest. But people living in the UK generally have very different expectations of life than Americans, in terms of lifestyle, housing, etc

[Anonymous]

I think they save quite a bit of money by not taking care of their teeth, or bathing often.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

Why doesn’t it make sense? House prices are purely supply and demand.

It doesn't make sense that a population with smaller (often substantially smaller) incomes than their peers in the US is able to buy housing that is typically more expensive than their peers in the US. That's it on the face value, but I also know it's typical to get much larger mortgages and mortgage-income ratios are also higher than in the US. It wasn't uncommon to get mortgages up to five times your income. But it's also not a healthy way to approach real estate and there's been no shortage of commentaries observing that the entire UK economy seems propped up by high housing prices.

Many more people also get adjustable rate mortgages to get bigger loans, which is why when there's a recession, far more foreclosures happen.

There are substantial income disparities in the UK and a shortage of housing due to the lack of construction and increased demand. For most of the 20th century, the majority of people rented and that only changed as credit became more widely available from the 1960s. However, younger people and poorer people still largely rent. 31% of 18-44 year olds still live with their parents. Private rentals increased from below 10% of the market in the mid-1990s to over 20% now. 28% of adults own their homes outright and most didn’t buy their houses at the current high prices. They have simply seen their value appreciate over time. So fewer people can afford to buy now - hence the surge in renting and steep rent costs - and those that do buy simply have deeper pockets or are willing to take more risk. Despite the excesses of the lending market prior to the financial crisis, lenders are offering multiples of 4.5-5x income although the Bank of England limits this to no more than 15% of lending. Unlike the US, you can’t walk away from a property when its value is under water.

People are kind of screwed either way. They have to spend a large portion of their income on mortgage payments or on renting as there simply isn’t enough housing. Or stay at home with their parents.

Mass migration of the last 20 years badly skewed the housing market by flooding the country with low wage workers all chasing after the same limited supply of housing, so this also plays a role.

The income disparity is real. If you manage to make it to the upper middle classes and above, life is pretty nice. But if you're just middle class or working, you're worse off than your American peers or EU peers. Frankly, the UK was better off 25 years ago notwithstanding the 1992 recession because housing was much more affordable for most people. Between New Labour of 1997-2010 and the Tories of 2010-present, I do scratch my head as they have not made Britain a better country for the next generation but made things worse.

That’s true, but if you’re poor, you’re better off than your American peers.

As a Brit living in the US, I think the US offers a much better quality of life for almost everyone except the poorest. But people living in the UK generally have very different expectations of life than Americans, in terms of lifestyle, housing, etc

I disagree. Subsidies in the US are generous. Free healthcare, public housing, etc. It seems pretty similar to me really. Drive around a dumpy part of the UK and it’s pretty similar to around a public housing development somewhere in the US.

[Anonymous]

Anonymous wrote:I think they save quite a bit of money by not taking care of their teeth, or bathing often.

Uh, what?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Houses are smaller than their peers in the US, even houses for the upper middle classes are smaller. No sprawling McMansions. But they're 1) not cheaper, 2) often more expensive than their peers in the US, which never made sense given incomes are also smaller.

How it all works is a bit of a mystery.

Why doesn’t it make sense? House prices are purely supply and demand.

It doesn't make sense that a population with smaller (often substantially smaller) incomes than their peers in the US is able to buy housing that is typically more expensive than their peers in the US. That's it on the face value, but I also know it's typical to get much larger mortgages and mortgage-income ratios are also higher than in the US. It wasn't uncommon to get mortgages up to five times your income. But it's also not a healthy way to approach real estate and there's been no shortage of commentaries observing that the entire UK economy seems propped up by high housing prices.

Many more people also get adjustable rate mortgages to get bigger loans, which is why when there's a recession, far more foreclosures happen.

There are substantial income disparities in the UK and a shortage of housing due to the lack of construction and increased demand. For most of the 20th century, the majority of people rented and that only changed as credit became more widely available from the 1960s. However, younger people and poorer people still largely rent. 31% of 18-44 year olds still live with their parents. Private rentals increased from below 10% of the market in the mid-1990s to over 20% now. 28% of adults own their homes outright and most didn’t buy their houses at the current high prices. They have simply seen their value appreciate over time. So fewer people can afford to buy now - hence the surge in renting and steep rent costs - and those that do buy simply have deeper pockets or are willing to take more risk. Despite the excesses of the lending market prior to the financial crisis, lenders are offering multiples of 4.5-5x income although the Bank of England limits this to no more than 15% of lending. Unlike the US, you can’t walk away from a property when its value is under water.

People are kind of screwed either way. They have to spend a large portion of their income on mortgage payments or on renting as there simply isn’t enough housing. Or stay at home with their parents.

Mass migration of the last 20 years badly skewed the housing market by flooding the country with low wage workers all chasing after the same limited supply of housing, so this also plays a role.

The income disparity is real. If you manage to make it to the upper middle classes and above, life is pretty nice. But if you're just middle class or working, you're worse off than your American peers or EU peers. Frankly, the UK was better off 25 years ago notwithstanding the 1992 recession because housing was much more affordable for most people. Between New Labour of 1997-2010 and the Tories of 2010-present, I do scratch my head as they have not made Britain a better country for the next generation but made things worse.

That’s true, but if you’re poor, you’re better off than your American peers.

As a Brit living in the US, I think the US offers a much better quality of life for almost everyone except the poorest. But people living in the UK generally have very different expectations of life than Americans, in terms of lifestyle, housing, etc

I disagree. Subsidies in the US are generous. Free healthcare, public housing, etc. It seems pretty similar to me really. Drive around a dumpy part of the UK and it’s pretty similar to around a public housing development somewhere in the US.

Thank you for this exhaustive analysis.