# Bank of Ireland suggesting people should move back to their parents to save the deposit?



## Brendan Burgess (24 Aug 2017)

Why has Bank of Ireland got such hassle over this? 

http://www.newstalk.com/Bank-sparks...ouraging-young-people-to-move-in-with-parents



Karl Deeter talking common sense as usual: 

"I understand the anger, and I've been writing about it for a long time... [But] there is no alternative. There's no white knight going to come over the hill and save you from the reality - which is sometimes you have to make choices that are difficult in order to get ahead.

"I don't think being angry is going to fix any of that. I actually commend people who make that choice and take the pain of it. And let's be honest - unless you live in a nightmare home, it's not exactly the most painful thing in the world to move home for a while and save."


Dr Ciara Kelly, however, suggested: "There is an inter-generational transfer of wealth from the young in this country - and in other countries - to the older generations who have the big pensions, who have the nice houses - and who are sitting fairly pretty, while young people are working in a gig economy with new security and no prospects."

So what? Complaining about this inter-generational transfer of wealth is not going to help people buy their first house.  I would guess that many of the parents who have become rich lived with their parents until they bought a house. 

Brendan


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## odyssey06 (24 Aug 2017)

In a statement, Bank of Ireland said:
_"The ad featured one couple's deposit saving experience, it wasn't intended to cause offence and wasn’t intended as advice for customers."_

Why does Bank of Ireland waste time and money on mor-ketting nonsense like this???

It's not really generally applicable advice is it... what if your parents don't live anywhere near where you work or study?
You have needlessly potentially annoyed them...

And BOI are quite clear it's not advice. So what was the point of this exercise?

Is there a single person who seeing this ad changed their mind and is now living at home and will look to BOI for a mortgage because of the ad?

Advice to Bank of Ireland. Start doing the stuff customers want you to do and not this nonsense. Cut our current account fees and halve your marketing budget, as it's clearly staffed by non essential idiots.


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## Protocol (24 Aug 2017)

Brendan Burgess said:


> Dr Ciara Kelly, however, suggested: "There is an inter-generational transfer of wealth from the young in this country - and in other countries - to the older generations who have the big pensions, who have the nice houses - and who are sitting fairly pretty, while young people are working in a gig economy with new security and no prospects."
> 
> So what? Complaining about this inter-generational transfer of wealth is not going to help people buy their first house.  I would guess that many of the parents who have become rich lived with their parents until they bought a house.
> 
> Brendan



I do agree that people must save hard and sacrifice to get a mortgage.

However, the intergenerational transfer of wealth is correct.

Every welfare payment was cut twice during the crisis EXCEPT the State Pension

My retired parents are undertaxed, they pay *less than 10% direct tax* on 49k income, and get:

two medical cards
two travel passes
35 pm / 420 pa off their elec bill
free TV licence

yet they have 400-500k in financial assets, excl their house!!


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## Gordon Gekko (24 Aug 2017)

Generation Snowflake strikes again...this was oversensitivity in the extreme. I'm surprised at Dr Ciara Kelly; there is a world beyond the "gig economy", but Generation Snowflake seem to believe that they can work as dolphin photographers and still be able to afford to buy a house in South Dublin. The world is a tough place, and getting tougher unless you earn a decent living (i.e. >€60k a year).


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## cremeegg (24 Aug 2017)

Excellent opening post.

There is a tendency for people to say the world is unfair and the sit on our hands until it becomes fair.

You need to deal with the unfairness now as best you can, and make your contribution to increasing fairness.


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## Delboy (24 Aug 2017)

cremeegg said:


> You need to deal with the unfairness now as best you can, and make your contribution to increasing fairness.


Euthanasia for over 65's


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## Brendan Burgess (24 Aug 2017)

Gordon Gekko said:


> Generation Snowflake strikes again...this was oversensitivity in the extreme. I'm surprised at Dr Ciara Kelly; there is a world beyond the "gig economy", but Generation Snowflake seem to believe that they can work as dolphin photographers and still be able to afford to buy a house in South Dublin. The world is a tough place, and getting tougher unless you earn a decent living (i.e. >€60k a year).



Gordon

I will be discussing this on Matt Cooper today at 4.40 pm. Don't be surprised if I plagiarise some of this.

Brendan


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## cremeegg (24 Aug 2017)

I am not sure that this "inter-generational transfer of wealth" thing is anything new.

When I was a trainee accountant the elderly partners captured most of the firms income. As I understand it today, those from the mid 30s to the mid 50s take much more than the older survivors.

It is true that the OAP has been well protected but I see that as a transfer from the productive to the non productive which is over done in this country at all levels.


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## Monbretia (24 Aug 2017)

Not all elderly are well off though, my father has just state contributory pension as income which is insufficient to pay the bills especially heating in his old not valuable house and live on.   Free travel useless to him, no public transport anywhere near him, yes he has the free tv licence and the electricity allowance but it's not a whole pile.  While he has a medical card we also pay for health insurance for him thankfully as he has already had a couple of 'trolley' experiences.

On the other hand I would not want my adult children moving in with me, selfish of me maybe but I've done my bit, time to make their own way.


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## Steven Barrett (24 Aug 2017)

Don't see what the fuss is all about, loads of couples are doing this, I come across it all the time. It's almost normal for 1st time buyers with no equity. With the price of rent these days and the low supply of houses for sale, 1st time buyers can't rent and save enough. Neither of these issues are the banks fault. I do have some sympathy with the parents though. They have their kids moving back in, then they might be providing a creche service for another who can't afford their mortgage and childcare costs. So while they may have more wealth, they don't have as much time to spend it as they are still helping out their adult children. 

Generation X are the first generation to be poorer than the previous one. There are plenty of reasons for this: 


Debt - we have much more debt than before. The cost of housing in this country is off the charts and the debt that goes with it too usually means both people need to work. 
Childcare - the cost of a second mortgage. Successive governments have ignored this costs and refused to help young couples with kids. 
Pensions - The mandatory pension scheme is gone in a lot of places. There is always a demand on money so it is easy to put off saving for retirement. 
Education - education is key now. The days of finishing school and starting in a job the next day paying decent wages and a DB pension scheme is gone. Those types of jobs are either automated or in China. They have been replaced with zero hour contracts in the retail sector, paying minimum wage. So if you want a job in a factory, you have to be the person who knows how to fix the robot that has replaced people. And that needs a college education. 

Steven 
www.bluewaterfp.ie


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## cremeegg (24 Aug 2017)

SBarrett said:


> Education - education is key now. The days of finishing school and starting in a job the next day paying decent wages and a DB pension scheme is gone. Those types of jobs are either automated or in China. They have been replaced with zero hour contracts in the retail sector, paying minimum wage. So if you want a job in a factory, you have to be the person who knows how to fix the robot that has replaced people. And that needs a college education.


And that is where the current generation are being let down in a big way.

When you leave school you cannot speak a foreign language, even if you did well in it at school.

If you did well at maths your knowledge of Calculus or Algebra is less than those who left school 10 years ago.

If you didn't do well at languages or maths and don't go to college the apprenticeship scheme, which was fairly good 30 years ago, is almost unchanged. It has completely failed to keep up with a changing world.  You can train in construction or hair dressing but little else.


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## Marion (24 Aug 2017)

Hairdressers can attend QQI Level 5 and Level 6 courses in Further education colleges.

There are also engineering courses at QQI level 5 and 6 in further education colleges.

Marion


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## fidelcastro (24 Aug 2017)

With all due respect theres no such thing as a level 5 "engineering" course, a pre requisite for engineering in my engineering company is Masters Level, which is a level 9 degree or level 8 with experience. Other levels simply don't have enough ability to compete with international graduates which are competing with the local pool. The standard of mathematics has been lowered to boost enrollment, much to detriment of third level quality of graduate standards.
Fidel.


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## Marion (24 Aug 2017)

That's hilarious, with all due respect.

I have just seen my timetable today and I have an "engineering" class at Level 5. 5M 2061

Marion


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## elcato (25 Aug 2017)

SBarrett said:


> The days of finishing school and starting in a job the next day paying decent wages and a DB pension scheme is gone.


What era was this ? certainly not in my day.


SBarrett said:


> The cost of housing in this country is off the charts and the debt that goes with it too usually means both people need to work.


Again in my era both generally had to work - alternative was to move to somewhere you could afford like the shticks.


SBarrett said:


> Childcare - the cost of a second mortgage. Successive governments have ignored this costs and refused to help young couples with kids.


Or perhaps a bit of family planning to get priorities right ?


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## Steven Barrett (25 Aug 2017)

elcato said:


> Or perhaps a bit of family planning to get priorities right ?



For most young couples, having a family is the most important thing. And they pay for the massive childcare costs too. But having to pay €2,000 a month in childcare fees is not a good way of building wealth. It is a factor in why this generation is poorer than the previous one. 


Steven 
www.bluewaterfp.ie


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## elcato (25 Aug 2017)

SBarrett said:


> But having to pay €2,000 a month in childcare fees is not a good way of building wealth.


But conversely, saving €2000 a month by having one working parent is just as prudent ?


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## cremeegg (25 Aug 2017)

Marion said:


> That's hilarious, with all due respect.
> 
> I have just seen my timetable today and I have an "engineering" class at Level 5. 5M 2061
> 
> Marion



There are engineers and "engineers". The person who comes to fix the photocopier is an "engineer", the person who designs bridges is an engineer.

To put it another way the Institute of Engineers as far as I know requires a level 8 degree for associate membership.

The difference is the maths.


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## fidelcastro (25 Aug 2017)

There is a big difference between using a computer and designing the integrated circuits , to writing the code & algorithms which enable the computer to work. 

Similarly between fixing an engine and designing the engine, or pouring concrete to working out the loadings, stresses and safety criteria in critical systems. 

5M 2061 ? ...that's clever marketing by the universities and "further" education "institutes" which is the root of a lot of let down young graduates compared to the international pool available, thanks to so called STEM initiatives and use of IPads rather than concentrating on the basics

The Berlin wall fell in 1989.We can hire from the 28EU and more countries now who thankfully do teach  log tables, probability, statistics, integration, not found in 5M 2061 
Fidel.


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## Marion (26 Aug 2017)

Rather than looking at that course as an end in itself, we should, perhaps, look at it as a starting point for some.

If it enables talented people to get a chance to return to education or those straight out of school to use it as a stepping point to enable them progress on to Level 8 and 9 in the colleges and universities then it serves a great purpose, and getting back on track provides them hopefully with good jobs and coresponding good salaries so that they can have a decent standard of living and be able to save for a mortgage if so desired.

Marion


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## MrEarl (26 Aug 2017)

Hello,

I could not believe this when I heard about it first, it's complete nonsense.

Simple fact of life - if you want to buy something expensive, you work hard and make sacrifices, to save and get it.

It's obvious that if you can move back in with your parents and live with them at a lower cost than living away from home, then that's what you should do.  I'd imagine it's what a large percentage of home owners in the country did before they got their first step on the ladder.

It's probably the same group of people that are out drinking gins that I've never heard of out of goldfish bowls with various pieces of fruit and veg floating around in them at €10-€15 per drink, that are crying about this advert.

I really wish someone would silence the whingers


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## Gordon Gekko (26 Aug 2017)

I listened back to Brendan's appearance on The Last Word; I have never heard such rubbish in my life (from the other contributor).

So moving back in with one's parents is a good idea but it's politically incorrect to suggest it because not everyone can do it?

The world has gone utterly mad...Generation Snowflake!


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## Brendan Burgess (26 Aug 2017)

Gordon Gekko said:


> I listened back to Brendan's appearance on The Last Word; I have never heard such rubbish in my life (from the other contributor).



Thanks for the clarification.

Some of these views are so illogical, that it's hard to know where to start arguing against them.

I had planned to ask her if she thought it was a bad idea to move back in, but before I could do so, she had commended the woman for doing so. 

The newspapers were just as bad: Here is what the Indo said: 


> Bank of Ireland has come under fire for promoting questionable financial advice online.




Brendan


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## PMU (26 Aug 2017)

Protocol said:


> However, the intergenerational transfer of wealth is correct.
> 
> Every welfare payment was cut twice during the crisis EXCEPT the State Pension



No. It's not correct. 'Wealth' is your net worth of tangible assets (i.e. total assets minus total liabilities). Transfer payments are not wealth transfers.

Of course there are intergenerational wealth transfers in Ireland.   They are called inheritance. There are significant intergenerational wealth transfers (i.e. assets) but they are from the older generation (i.e. when they die) to their descendants and these transfers are increasing. And it's not just direct descendants that benefit. According to Revenue, inheritance tax receipts, i.e. transfers from the deceased to the exchequer, are up about 23% in the past 9 years. http://www.revenue.ie/en/corporate/documents/statistics/receipts/cat-receipts.pdf.



Protocol said:


> My retired parents are undertaxed, yet they have 400-500k in financial assets, excl their house!!



Without being morbid on it, you and your siblings will get that wealth as an intergenerational transfer when your parents pass away, and society as a whole will benefit through inheritance taxation.


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## Gordon Gekko (26 Aug 2017)

"Walking is a good idea"

"How dare you suggest that people should walk; what about people with no legs?"


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## Protocol (28 Aug 2017)

PMU,

no CAT payable on 750 k assets as three children.


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## Protocol (28 Aug 2017)

PMU,

what I meant about the State Pension was it is an example of how the older were treated better than the younger during the crisis.

All welfare payments were cut twice, except the State Pension.

So transfers to pensioners were protected, at the expense of all non-pensioners.

Similarly, cuts to PS worker pay were more than the cuts to PS pensioners.


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## PMU (28 Aug 2017)

Protocol said:


> PMU,
> 
> no CAT payable on 750 k assets as three children.


  Great.  Isn't it just great that you can inherit this amount in an intergenerational wealth transfer without paying CAT?



Protocol said:


> PMU,
> 
> what I meant about the State Pension was it is an example of how the older were treated better than the younger during the crisis.
> 
> ...



While I've no real experience in this area, and what you say is correct, it would appear that Ireland's state pensions are generous, particularly for low earners where the pension replaces 70% of average incomes. Occupational pensions just don't do this. But for average earners it's rather low at 42%. http://www.oecd.org/els/public-pensions/pensionsataglance.htm. But I think this is symptomatic of faults in the Irish welfare state, where benefits appear to be excessively skewed those at the bottom at the expense of those at the middle.

But let's not get too worked up about state pensions. In Ireland, according to the above OECD source, public expenditure on state pensions is 5.3% of GDP; i.e. about the same as in the UK and less than the OECD average of 7.9%. By no reasonable standard can this be regarded as a massive inter-generational transfer of funds from the non-retired to retirees, at this point in time.

Again, my basic point is that intergenerational wealth transfers do occur but they go from retirees when they die to the next (i.e. younger) generation, when their estates (typically the family home) are inherited by their descendants.  Prudent management of inheritances can lead to a cascade of wealth falling down through future generations.


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