UK household finances stretched

doire_2

UK household finances still stretched, survey suggests

There's no light at the end of the tunnel for UK households yet

The annual poll of almost 2,000 homes for the Bank of England found more than half struggled to meet payments for credit card or other unsecured debts.

About 22% of people said they were put off spending because of concern that it was becoming harder to borrow, up from 16% a year ago.

The survey also found that 90% of respondents expect to be heavily affected by government austerity.

However, fewer than half had taken any steps in anticipation of the budget cuts, such as increasing savings, working longer hours or looking for a new job.

The annual survey, produced by NMG Consulting, was carried out in September.



Nearly half of households expressed concerns about their level of debt, with a majority saying they had become more worried over the last two years.



Borrowing was also said to be getting more difficult, particularly for those with big mortgages, 50% of whom said credit availability had got worse.

A quarter of households reported struggling to meet bill payments, up from last year, though still slightly below 2008 levels.

Reliance on credit cards and personal loans also appeared to be a growing problem.

"The burden of unsecured debt has risen this year, most likely reflecting a combination of weak earnings growth and the interest rates on unsecured debt remaining high over the past two years," noted the Bank in its report on the survey.

Spending habits

Those debt concerns have translated into a higher savings rate.

Over a fifth of households said they were saving or intended to save more, although that was slightly down from a year ago.

Most of the planned saving is to be done by those under 35 and - worryingly for the economy - by those in the highest income brackets, meaning the impact on overall spending may be magnified.

The report noted that the Bank of England had provided a fillip to many households by cutting base rates to a record low of 0.5%.

Unsurprisingly, the biggest impact was on the 23% of mortgage borrowers with base-rate tracker mortgages.

The 20% on standard variable rate loans benefited less, at least in part because banks have not fully passed through the rate cuts.

However, in the context of the other data, it suggests that if the Bank has to raise rates again, it could have a seriously detrimental effect on the ability of many borrowers to keep up with their payments.

I have to wonder at this though.........

About 22% of people said they were put off spending because of concern that it was becoming harder to borrow, up from 16% a year ago.

If i want something i save for it. I dont go looking to get into debt. Thats whats wrong with this country!


http://www.bbc.co.uk/news/business-11979894

Really2

doire wrote: »

If i want something i save for it. I dont go looking to get into debt. Thats whats wrong with this country!

That can hit some hurdles on cars and houses.

Orpheo

doire wrote: »

I have to wonder at this though.........


If i want something i save for it. I dont go looking to get into debt. Thats whats wrong with this country!


http://www.bbc.co.uk/news/business-11979894

Exactly. No savings also leaves people unprepared for the unforseen. Over the past 12 months I've had some serious unforseen expenses which would have been tough to handle without savings.

Orpheo

Really2 wrote: »

That can hit some hurdles on cars and houses.

1997-1998 saved money.
1998 bought a cheap used car outright.
1997-2003 saved money.
2003 bought a better used car outright.
2003-2009 saved money.
2009 bought an even better used car outright.

StevieJ

Interesting that low LTV mortgage holders are more worried about their situation than high LTV.

Really2

Orpheo wrote: »

1997-1998 saved money.
1998 bought a cheap used car outright.
1997-2003 saved money.
2003 bought a better used car outright.
2003-2009 saved money.
2009 bought an even better used car outright.

I have owned all cars outright from 2002 (also my first car as it was a banger), that does not mean every one can though.

Also some people get hit with expensive repairs, for the poorer that could mean borrowing also.

RenovationMan

Our household finances are stretched. We're having to have solid wood work surfaces in the kitchen instead of granite.

Damned recession.

Really2

RenovationMan wrote: »

Our household finances are stretched. We're having to have solid wood work surfaces in the kitchen instead of granite.

Damned recession.

Can't you get a reconstituted stone (corian etc) I always think wood is to much work maintenance it is fitted (stains, sanding back, oiling etc).

There are some very good alternatives real stone , some are arguably better (poreless)

PasturesNew

Many who say they're struggling have huge incomes. Huuuuge. Like £1000/month after housing costs.... and more!

I've been used to having £50-200/month in the past after housing/basic bills and I have no sympathy for those that would list in their expenditure any two of the following: £80/month mobile phones, £40 Sky, £1000 for Xmas, £1000 for a summer holiday, wine in their weekly shop, more than £30/person for the weekly shop (that's !!!!!! generous), gym membership ... and then say they're struggling. You're struggling when you have had 0 of those in your life ever or in the past 2 years and are eating gruel.

doire_2

Mmmmmmm gruel

StevieJ

doire wrote: »

Mmmmmmm gruel

Please sir, can I have some more :eek: