UK household debt versus assets

RenovationMan

Graham_Devon wrote: »

Read the OP again.

I did as you asked and I saw the following stats:

UK personal debt = 160% of income.

UK personal savings in financial assets alone are worth 450% of income.

UK housing equity is worth more than 400% of income.

Net worth per household is around 700% of income, on average.


A quote from a newspaper and the OP just says the following:

"Hardly a crushing burden then, for the country or economy as a whole.....;)

Although it's understandable a few whiny youngsters from the "me, me, me" generation want to complain about house prices, the reality is all housing wealth is ultimately passed on to future generations and always will be unless we find a way to abolish death."

Which bit of that are you taking issue with?

Do you think it's a crushing burden for the country or economy as a whole?

Do you think that housing wealth will not be passed on to future generations?

Do you think that we can abolish death?

Which is it??

Really2

I think one of the main points by the OP is answered by this.

Total UK personal debt at the end of August 2011 stood at £1,451bn.That includes mortgages

The value of deposit based savings has also more than quadrupled (328%) in real terms over the past 50 years; increasing from £269 billion in 1959 to £1,153 billion in 2009

So total deposits in savings nearly equates to total debt. EG as a nation debt is not that high in terms of leverage.

Graham_Devon

Really2 wrote: »

So total deposits in savings nearly equates to total debt. EG as a nation it is not that high in terms of leverage.

Great.

Unless you are one of those with the debt.

All this is so extremely simplistic to make things look rosier than they are.

RenovationMan

Graham_Devon wrote: »

Sell your car and you may not be able to work to pay your debts. That's the case for the majoroty. Therefore it's nonsensical to suggest your flippant response - though expected..

Well if the person has a job then he will be able to service his debts, even if he has to prioritise them, with some being paid in full (mortgage), some having £5 token payments (loans & credit cards).

wotsthat

Graham_Devon wrote: »

All I'm asking it what Hamish's point is.

I think this has been explained a number of times to you now.

Either:

a) you simply cannot comprehend the point being made

b) don't agree with the point and wish to argue although unlikely as you've not understood the point

c) You saw a post by Hamish started frothing and started saying things like selling a £300k house with a £100k was the stupidest thing you'd ever heard of. Or adding an apple and orange doesn't make a pineapple. (I think your definition of (c) is forumonics).

Really2

Graham_Devon wrote: »

Great.

Unless you are one of those with the debt.

All this is so extremely simplistic to make things look rosier than they are.

I don't make the data unfortunately, but the data does make up the averages.

RenovationMan

wotsthat wrote: »

I think this has been explained a number of times to you now.

Either:

a) you simply cannot comprehend the point being made

b) don't agree with the point and wish to argue although unlikely as you've not understood the point

c) You saw a post by Hamish started frothing and started saying things like selling a £300k house with a £100k was the stupidest thing you'd ever heard of. Or adding an apple and orange doesn't make a pineapple. (I think your definition of (c) is forumonics).

Looking back over the wreckage of this thread one would almost suggest that Graham has achieved his goal and halted all serious discussion.

Didn't someone once state that Graham wrecks threads by pretending he is confused over a certain aspect of it, then has various other posters tie themselves in knots trying to explain the simplest terms and clogging up the thread, while anyone who wanted to comment on the actual subject matter moves on.

Mission accomplished.

Graham_Devon

There is a D, wotsthat.

Right, let's discuss this properly.

So, the country has £1.15tn in despoits, but £1.45tn in debt.

The point of this thread, I believe, though this is why I was asking Hamish for his point before I got it wrong, was to suggest that therefore the debt isn't too bad a concern.

But, all this is looking at figures. It's not looking at those who make up the figures.

So, Mr Joe Bloggs is walking around with £200 in his current account, a 100k mortgage and 15k personal debt in the form of loans and credit cards.

Mr Rogers is walking around with no debts and £600,000 in his savings account.

Fantastic. Now, what you would be asking Mr Rogers to do, for this thread to actually make any sense, is give up his savings and pass them out to others with debts. Such as Mr Bloggs. Mr Bloggs then gets to pay off his debts, and they don't concern him anymore. Mr Rogers has handed over his wealth to do so.

Absolutely fantastic. Brilliant. Problems dissapeard (well most of it, we still have £0.3tn to find). Everyone who had savings in the country has passed them on to other who had debts. Bravo. The country is back on an even keel. Leverage this, leverage that.








Just one....slightly minor point here.

Mr Rogers isn't actually going to hand over any of his 600k. He might do when he dies, but as Mr Bloggs isn't a relative, he isn't going to get any. Neither are the millions of others in debt. Why? Because Mr Rogers estate is passed to those in his will. Unless of course Mr Rogers has been incredibly kind and suggested every adult in the UK gets a slice.

So, we appear to be back to square one. A situation whereby in a fantasy world, in theory, Mr Rogers could pay of Mr Bloggs debt. If enough people did this, then the debt situation isn't a problem. But that's all this is. Fantasy.

So what is the point of suggesting debt isn't such a burden, because collectively we have x amount in savings, and collectively x amount in debt?

Are people really suggesting that we are all going to give up our savings for others? Really suggesting that?

Or....is it more a case of trying to make things look better than they are by painting this picture of this fantasy world whereby figures suggest the debt could be paid off with ease?

You need to look at the holders of the debt and the holders of the wealth. YOu can't merely pretend under some fantasy guise that the two are the same.



Feel free to fall over yourselves to find a spelling mistoike or similar, or some other way to have a pop. We all know the above fantasy world just aint going to happen, we just don't want to admit it due to forum politics. So Hamish's point? Absolutely pointless.

Kennyboy66

RenovationMan wrote: »

Looking back over the wreckage of this thread one would almost suggest that Graham has achieved his goal and halted all serious discussion.

Didn't someone once state that Graham wrecks threads by pretending he is confused over a certain aspect of it, then has various other posters tie themselves in knots trying to explain the simplest terms and clogging up the thread, while anyone who wanted to comment on the actual subject matter moves on.

Mission accomplished.

Except on this occasion Graham is onto something.

It is fatuous to say the least to say that the household debt level is irrelevant because of household assets.
This has been the excuse of every bubble in history.

In addition people are now claiming pension assets, that for many will mean a retirement of relative penury, as a counter-weight to overly high debt levels.

Deluded doesn't do it justice.

Thrugelmir

Really2 wrote: »

So total deposits in savings nearly equates to total debt. EG as a nation debt is not that high in terms of leverage.

Interesting figures. Considering £600 billion of mortgage debt was added in a few years between 2003 and 2007.

Some party !