UK family debts increase by nearly 50% in a year

RenovationMan

nearlynew wrote: »

Believe it or not, but not every post is directed at you.

I didn't say it was. I meet the criteria though, surely?

wymondham

suburbanwifey wrote: »

I know someone exactly like this, they worry me!

Couple, one child, unmarried, house with mortgage of £142,000 on interest only mortgage, variable interest rate, sub-prime lender (nasty! and scary!) and when I ask if they have a savings vehicle to pay off their mortgage when it matures, I was told 'When her parents die, they will leave us the money and that will pay it off' (yet, they are not even married? would you pay off the joint mortgage of your daughter and her boyfriend ?? me thinks this scenario will not go as planned) AND he has around 20K on credit cards and last week (yes, last week) bought a new 50" Plasma, HD, 3D,2D TV (we needed one! the other plasma was 5 yrs old) etc. etc. :eek:

He also spends £5 a day on MacDonalds for his breaks at work, that's £30 a week on MacD's. When I said they could make cut-backs with not wasting money on crap like that I was told 'I like them' (then he complains about his expanding waistline )

Seriously, this guy works with my OH and he moans to him all day, every day about how 'skint' he is. Yet spends money like water on crap and says his mortgage will be paid off when someone dies ...

Despicable, stupid man, he really is.

Eating Maccys for breakfast everyday he'll be long gone before his parents!

shortchanged_2

If these figures are anywhere near correct, then things look a lot worse for the UK than thought. It's just highlighting that many households are still living far beyond their means. 2012 looks like a very dangerous year for many.

RenovationMan

My debt levels went up 650%, does that mean I'm living far beyond my means?

StevieJ

nearlynew wrote: »

I personally know dozens of people like this.

They are debt-junkies, pure and simple.

Another interesting thing is when you meet people with this attitude who have a mortgage, you can be 99% certain that it is interest only.

Don't believe me?
Try asking them and you'll see I'm right.

I have that attitude, I remember ringing up the old bank manager for an overdraft to go on holiday once, and yes I have an interest only mortgage (then again I have paid it down to £300 ). I have only current monthly balances on credit cards at the moment and no overdraft but I wouldn't have a psychological hang up about borrowing if I needed to or wanted to for neccessity or pleasure

pqrdef

Generali wrote: »

For want of a better word, I suspect this is balderdash.

Unsecured lending is falling at almost 1% per month according to the Bank of England who you'd hope would know!

That's only a total. It doesn't say who it is who's reducing their borrowing.

I suspect it's mostly people who aren't skint but are just reducing their leverage. I mean, if you don't pay cash for the new motor or the new extension, it's a struggle to find somewhere safe to put the cash.

The gap between the rich and the rest is a gulf now.

Graham_Devon

pqrdef wrote: »

That's only a total. It doesn't say who it is who's reducing their borrowing.

I suspect it's mostly people who aren't skint but are just reducing their leverage. I mean, if you don't pay cash for the new motor or the new extension, it's a struggle to find somewhere safe to put the cash.

The gap between the rich and the rest is a gulf now.

Yup. This is specifically aimed at families....of which they categorise families.

I still thought people were paying down their debt on the whole though. Families included.

shortchanged_2

RenovationMan wrote: »

My debt levels went up 650%, does that mean I'm living far beyond my means?

Yes but this is different RenoMan and you know it. Most of your debt is secured debt i.e a mortgage, on an asset that although it can depreciate as well as appreciate is likely to have some return on it.

Most of this debt being spoken about refers to non tangibles such as services and utilities and food etc. Basically stuff that you spend money on that offers you no return at all. Therefore once it's gone, it's gone.

quantic

nearlynew wrote: »

I personally know dozens of people like this.

They are debt-junkies, pure and simple.

Another interesting thing is when you meet people with this attitude who have a mortgage, you can be 99% certain that it is interest only.

Don't believe me?
Try asking them and you'll see I'm right.

Well its funny you say that actually, the person I was talking about does indeed have an interest only mortgage.

RenovationMan

shortchanged wrote: »

Yes but this is different RenoMan and you know it. Most of your debt is secured debt i.e a mortgage, on an asset that although it can depreciate as well as appreciate is likely to have some return on it.

Most of this debt being spoken about refers to non tangibles such as services and utilities and food etc. Basically stuff that you spend money on that offers you no return at all. Therefore once it's gone, it's gone.

Well the theory is the same, namely that just looking at debt in isolation is worthless unless you also look at what the debt was used for. In my case I have a large mortgage debt, which is secured landing as you mentioned. However I also often have anything upto £3k on my credit card due to company travel expenses, I have stoozed money on cards in the past, I have arranged 0% loans in order to keep our credit rating ticking over (keeping my savings in the bank), I have even borrowed money to buy cars (many years ago). In all of these cases my assets have exceeded my debts and all debts were used to increase my assets. I doubt that I am alone in this.

That said, I know that a lot of people are struggling, but let's temper our moral outrage and frothing by making sure we're not being manipulated too much my the press and various VI groups.