It is like a war

Pobby

Maybe it is because I have had a couple of beers----lol,but I have been trying to get my head around debt issues.It`s clear that many fall on hard times due to bad situations,however many,including people in my family that spend beyond there means.It seems to me that the U.K world has changed beyond my experience.

When i was a young man and bought a house it was maybe a little tough but certainly affordable.Prices soared but also wages grew at an heady pace.We drove old bangers,maybe had a cheapo holiday but as far as non mortgage debt was concerned that was pretty unlikely and certainly hard to obtain.We chucked a few quid in pensions and tried to get a few meagre savings to boot.

Was wondering what has changed.Imho we have moved into a strange debt culture,I see it all around.People dragging equity from their houses and day after day are encouraged to do so.Half witted ``celebs``being held up as role models,whst does that teach our kids?I see massive gaps in wages in a way that really doesn`t add up.It is almost as if the government is trying to create an under class that is reliant on benefits.I guess I am sort of middle aged middle Britain,but in fact feel worse off than when I was younger.Dodgy endowment,failing pension,think you know what I mean.

I feel very sorry for younger folks forced to rent from private landlords and thrown out if the landlord goes broke or sales up.What stability is that for new familys?And yet i know of so many youngsters falling for the spin and taking on debt.It`s almost like the the financial institutions are trying to trap people.

When we had the early 90`s crash I thought at long last we may take a different view on house prices,how wrong was that.Since 1999 my house has gone up 250%,how mad is that.Well a bit of a rant in a mad world.

LittleL_4

Really enjoyed reading that Pobby. You sound very wise (even after a few beers)

I hate the rat race and all that comes with it (DEBT being the biggy). I'm 37 and renting (£600 pcm) and feel really insecure. I think we need to start teaching how to handle money in schools etc...

xx

Big_O

Lol, and I normally rage at the baby-boomers for living the good life and expecting us young uns to clear it up! (environmental damage, large ageing population paid for by less working age people, priced out of housing market by older people hitting the buy-to-let option, etc, etc)... No seriously, I don't begrudge them one bit, you've got to make the most of the opportunites that come your way.

Anyway...

You're absolutely right about this bizarre debt culture - especially in a time when manufactured goods (electronics especially), clothes and food etc are cheaper in real prices than ever before - which should negate the need for more borrowing, surely? On the other hand, as Martin's pointed out before as long as the debt is sustainable then why not? But this then begs the question - just how much of the UK's debt IS sustainable? You've got to hope the banks know what they're doing lending all this money. As the saying goes (something like), owe the bank £10,000 and you're in trouble. Owe the bank £10,000,0000,000 and the bank's in trouble. And if the big banks are in trouble we're ALL in trouble.

Of course, this is all unlikely... It'd require some kind of horror scenario of stock market crash plus ridiculous oil price plus massive hike in interest rates (the old-fashioned three-percent-in-one-day kind) to cause that.

CLAPTON

Of course if the baby- boomers had done their duty and had loads of kids and those kids had loads of kids, there wouldn't be an 'aging population problem' but of course there would be a huge population problem (the kids and the kids of the kids) and of course it would be absolutely impossible for young people to buy any property because of the huge demand from all those extra people.
but there you go.

when Poppy was a young man, in reality only a small proportion of people could afford to buy (and no women of course because nobody would give them a mortgage because they left to have children didn't they)
but there you go


in reality we live in a golden age ...

dips_3

Pobby wrote:

Maybe it is because I have had a couple of beers----lol,but I have been trying to get my head around debt issues.It`s clear that many fall on hard times due to bad situations,however many,including people in my family that spend beyond there means.It seems to me that the U.K world has changed beyond my experience.

When i was a young man and bought a house it was maybe a little tough but certainly affordable.Prices soared but also wages grew at an heady pace.We drove old bangers,maybe had a cheapo holiday but as far as non mortgage debt was concerned that was pretty unlikely and certainly hard to obtain.We chucked a few quid in pensions and tried to get a few meagre savings to boot.

Was wondering what has changed.Imho we have moved into a strange debt culture,I see it all around.People dragging equity from their houses and day after day are encouraged to do so.Half witted ``celebs``being held up as role models,whst does that teach our kids?I see massive gaps in wages in a way that really doesn`t add up.It is almost as if the government is trying to create an under class that is reliant on benefits.I guess I am sort of middle aged middle Britain,but in fact feel worse off than when I was younger.Dodgy endowment,failing pension,think you know what I mean.

I feel very sorry for younger folks forced to rent from private landlords and thrown out if the landlord goes broke or sales up.What stability is that for new familys?And yet i know of so many youngsters falling for the spin and taking on debt.It`s almost like the the financial institutions are trying to trap people.

When we had the early 90`s crash I thought at long last we may take a different view on house prices,how wrong was that.Since 1999 my house has gone up 250%,how mad is that.Well a bit of a rant in a mad world.

Excellent post and bang on. The last few years have all been a con. The government have told us all everything is fine and we are all 'rich..i tell ya rich'. We are not. If you take away all the credit (debt) our standard of living is actually going down.

Try living on a normal wage now without using any credit. It's like living in the 1970's again - I know - I have no debt just live of wages.

The whole economy has been kept afloat by credit. the reason it is so easy to get credit is no accident. It is deliberate. It is this credit that has stopped this country going into recession.

If you are in debt and struggling you are one of the casualities of this policy.

If you want more convincing have a look at how detached things really are.

1) How can house prices rise 200% when wages have not risen anywhere near that?

2) If fuel, utilities, house prices, council tax etc have all risen by somewhere between 10-30% why does the government say inflation is between 2-3%

3) Why did the government change the laws on insolvency/bankruptcy? Did it know what was coming?

4) Why are relactively highly paid professionals coming under the tax credit 'radar'?

5) If everything is ok and we are all better off than before why are websites like this growing? Why are debt collection agencies growing?

Its all a con. We are no better off. We (as a country) have just mortgaged our futures. Our kids will pay the price for this.

furndire

Unfortunately we are in a throw away society - no-one makes do with second-hand. If people have a problem they throw money at it - no time to spend with kids. Sunday shopping doesn't help - and I'm not religious - but it was the one day of the week were as a families could be together.

southernscouser

LittleL wrote:

Really enjoyed reading that Pobby. You sound very wise (even after a few beers)

If he's anything like me he sounds wise because he's had a few beers! :beer:

Pobby

Nice one SS!Seriously I see so many valid points raised here.Sometimes I thought that I was the only one that thought this way!LittleL £600 per month,I know that is the going rate in lots of places but it also means that you have to earn over £800 per month pre income tax just to provide a roof over your head.Where I live,Devon,that would account for a lot of peoples monthly wage.At 37 I find it deplorable that you should feel insecure.

In actual fact a lot of folks in the 70s were able to buy.My first house,purchased in 1974 just after a boom{yep I always get it wrong}was £9,900,a 3 bed semi.I was earning £1,750 per year and my wife £!,500
in 6 years my income went to £10,000.Inflation blew away the debt.

Great point by dips regarding inflation,the government will tell us what they want us to believe,if you measure inflation by the cost of dvd players and bogoffs from Morrisons you are going to get a pretty low figure.How can you leave out of the equation housing costs,council tax,utilities,last time I looked these things were pretty compulsory.

Furndire talks about our throw away society,how true is that.Perfectly good stuff chucked away to make way for the latest geegaw.Dips talks about tax credits{don`t get me started----lol}but I find it amazing that families with an household income of around £60,000 can receive family tax credits.I don`t have young kids at home but my wife and I certainly don`t earn a combined £60,000 per annum.Can`t really see why I should subsidise those that do.

I come from a long line of Labour party activists.I left in the mid 80s when I saw,on a local level,how the power base was moving toward a middle class debating society.I am afraid that Nu Labour has no real substance and may I be cynical and say that what they are about is some sort personal gratification.Not to mention the fiscal rewards.Imho they are as bad as the Thatcher years.

To allow debt to rise to this level is scandalous,previous governments had measures to control it.Debt has to be paid back and boy,is that going to take some doing.Imho a resession is long over due,probally saved by the Fed dropping interest rates due to 9/11.I would hate to scare people but the fact is that historically interest rates sit at an average of about 8%.Imagine what would happen if we returned to that sort of figure.

How do I tell my 18 year old Godson that borrowing £15,000 to buy a new car is pretty dumb.How do I tell my niece that on £10,000 a year 3 continental holidays a year is a bit excessive.Maybe it`s not my business but I do feel a bit concerned.

Once again a bit of a rant.Think I might just lay down in a darken room.

Tr@cker

What better way of having control over people than encouraging them into debt ? They have you by the 'curlies'

Kevicho

The aim of credit is to choke peoples monthly cashflow so that the majority is going to debt repayment, thus making the banks rich.

That way overpayments cant be made and it means people are in debt longer, thus paying more interest.

HairyHandofDartmoor

Why do you feel abnormal if you don't go on holiday every year, have a widescreen tv, flat screen monitor for your computer, flashy looking car, decking for your garden, etc. People are made to feel like a failure if they don't have these things, and so they go into debt to get them. The pressure from society and the easy availability of credit makes temptation to buy what you can't afford almost overwhelming.