Young people need a degree in financial forensics to detect what is being taken from them before they even get it
As a responsible member of the financial community, the Alchemist has long been campaigning for better personal financial education for children, starting with counting jelly beans for six year olds, and progressing to a calm but explicit explanation of the funding of university fees to teenagers, encompassing, along the way, the hazards of the unregulated credit cards. Far from avoiding the subject of money, little people are utterly bewitched by it and quickly appreciate its powers. Hear the case of a six year old who negotiates fixed, standard and variable pocket money rates on everything from stacking the dishwasher to bringing home class grades.
Hardly surprising then that young women choosing a mate look for a prospective financial heavyweight. This is nothing new. Twenty years ago, my dear cousin's wife, a sweetly diminutive but ruthless woman, accepted his proposal of marriage only on condition he retracted the small but perfectly formed gem offered as a token of his esteem and replaced it with something FAR bigger.
Now a Woolwich survey reveals that just 17% of women consider a ring a token of lasting commitment to a relationship; 30% said buying a house was a better indication. The average ring, the poll says, costs £300 in 1983, and would be worth some £1,100 today, a respectable increase. The average house deposit then was just under £2,500. Today, that is more like £25,000. Given the divorce rate, it is no wonder that partners are opting for share-of-house rather than the golden symbol of thralldom. And who wants shares? The FTSE 100 might have put on 22% since March, but it is 40% off its high of 6,950 at the end of 1999. Currently around 4,250, it needs to beat 6,000 just to plug the £55 billion pension funding gap that has opened up in the last three years.
After a moment of consolidation pre-holidays, property prices are moving up again. Institutional investors have been adding property investments to their portfolios for the last few years, helped by some imaginative securitisations. Most private investors are fully stretched owning their own homes, but the buy-to-let brigade is growing rapidly. This is slightly disconcerting even if rental demand is improving, for one big reason. The Government is itching to interfere in this market. Chancellor Gordon Brown has expressed open admiration for the Continental European property model.
Harmonisation with Europe, ahead of entry to the single currency, could justify intervention. In June one of the Government's tame think tanks came up with a proposal to tax property in new and astonishing ways. One was capital gains tax on the sale of people's homes, but there were several others. Concessions like, say, including residential property in pension provision, might be traded off for more immediate fiscal returns. Most analysts believe such moves would be met with massive resistance from the two thirds of UK voters and citizens who are homeowners. Of course the other third, obliged to pay rising rents or dependent on state support, would be cheering Labour's return to redistributive policies. That constituency might be enough to spur to action a government which has never been shy of pushing through unpopular policies. Our young citizens do indeed need financial education. But not just enough to make them comply with whatever scheme is handed down to them. Each child needs a degree in financial forensics to detect what is being taken from them, before they even get it.
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation