Originally Posted by
Bob Viking
I knew I could rely on you. I hacked my watch to wonder how long your reply would take.
You’re absolutely right on pensions but that was not the main thrust of ES’s post and my vociferous agreement. I was more concerned with the UK housing market and the relative affordability of houses and mortgages now vs 30-40 years ago.
Just ask my brother and sister in law who are earning decent salaries but can neither afford to rent or buy anywhere near their home and work locations and are not eligible for social housing.
If you want to bring it back to RAF specifics then, as good as the pension currently is, you have to stay for a full career to get it and all that time you’ll struggle to get on the housing ladder anywhere. As a result more people will leave sooner and seek employment elsewhere. Which of course will lower the pensions bill significantly as a result of the increased staff turnover. Which does make you wonder if that’s not the true master plan.
BV
Glad to please, BV
I think again there is a flaw in that argument from an HM Forces perspective. The cost of SFA/SLA is hellishly cheap and so if you can’t afford to buy in your current posting location then use it and buy somewhere you can afford. Then you can rent it - as long as you get back in your pocket at least what you are paying for your SFA/SLA then you are good.
The average cost of SFA rent is around £350 a month. The average rent for a 3 bed property is between £1200-£1500 in most of the UK. If you can’t make that maths work then there is something wrong! As ever, service people want their cake and eat it - they get posted to Benson, Odiham, Northolt or similar and then moan they can’t afford a house in the local area. Well many could if they wanted to, but it wouldn’t be as good as SFA in all likelihood. So they either buy something, like the rest of the UK population, that is up to 90 mins commute away that they can afford or they live in a local rabbit hutch. Of course if you get posted to places like Lincolnshire, etc… then there are veritable palaces up for sale for very little money if you don’t mind living in the countryside.
If you choose wisely, then you may only have to live away from that choice for a couple of postings during a full career. That worked for me and there were more bases when I first joined.
What does an Air Specialist (Class 1) take home every month? About £2,200. A Corporal maybe £2,500 and a Sgt around £2,750.
A reasonable 3 bed semi in Sleaford might cost you £190k right now. With a 10% deposit that would be a ~£1,100 mortgage with a 6% repayment mortgage over 25 years. So roughly half an Air Specialist’s wage. If they don’t have an ‘other half’ helping pay bills then that will be tough and so the only other thing is to try renting a room out to a mate. For a Sgt, they would have £1650 a month left, plus anything their other half pays, which is manageable.
Transpose that to Benson then you’d probably be looking at house somewhere cheaper locally like Wantage. Average for the same house is £350k. So mortgage is now £2k with a £35k deposit at the same rate. That is fairly unaffordable without a decent second salary from an other half. So it’s time to go for SLA and buy somewhere where you may end up being posted to instead (like Sleaford) then rent it out or weekly commute and living in SLA.
Now let’s say that individual is a Corporal at EDP20/40 on AFPS15. They could leave at age 40 and get an EDP of £5k per year and a tax free lump sum of £33k. They could then get a job that pays £5k less, ie. £30k a year, and have £33k in the bank - and be on a slightly better pay than they were as a Cpl with their new pay and EDP combined. At state pension age they would see that become £15k a year AFPS15 pension, plus £11k of state pension. Total £26k per year in retirement, at 2023 value index linked up to what that is worth in retirement, unless they saved for another pension when they left to add to it. They would own their house in Sleaford without mortgage. That would be a fairly humble but comfortable existence and easily doable for most.
So, nope, not buying it. It isn’t impossible to get “on the ladder” (which is always a long term thing as prices do go up and down - which is why it’s called a ladder!) for even the lowest paid ranks in the Services. It will be hard, but not impossible.
Of course, as others have said, there is an issue of entitlement going on - wanting foreign holidays, flashy motors, modern 3 bed detached houses with landscaped gardens and brand new furniture throughout. But that is just an expectation reset that most of us go through as young people, regardless of generation.