Household finances at breaking point

Loughton_Monkey

N1AK wrote: »

It's a shame that there isn't better, less obviously skewed research out there and known about this. Sure plenty of people would try and rubbish the source, no matter what it is, if they don't like the message but it's also true that shelter has made a habit of setting out to get the answer it wants and stacking its surveys in a way that gets them.

We know that some proportion of benefit claimants who claim to be struggling are struggling because of their own behaviour and not the amount they receive. What we don't know is whether it is 5% or 50%.. However, it's also extremely likely that a large number, probably the majority imo, of people struggling on benefits aren't struggling because they are wasteful.

Yes. Shelter are bad enough, but I think the Rowntree Foundation take the biscuit. When you study it [links below], you get their "Minimum" incomes to provide only for need and not want [their words], we find that a couple with 2 young kids 'need' net income of £37,160 which equates to a salary of just over £52,000. And even more ridiculous is the assertion that a single parent with 1 baby 'needs' £27,278, which equates to an earned income of £36,000.

It appears that they measure anyone below this as "In Poverty" which explains why they think over 13 million of us are in poverty! Who needs professional comedians when we have thinking like this?

Arguably everybody "struggles" moneywise for a significant part of their lives. I did. Sometimes with no choice, other times by choice [for my own future benefit]. Reasonable benefits should be there for the sick, frail, and old. Not because benefits give us a certain income for 'nothing' which exceeds what we could achieve by our own efforts.

grizzly1911

Loughton_Monkey wrote: »

It appears that they measure anyone below this as "In Poverty" which explains why they think over 13 million of us are in poverty! Who needs professional comedians when we have thinking like this?

Their definition suggests:-
"
Low income (or poverty) is defined as people living in households with income below 60 per cent of the median for that year. In the last two years, median income has fallen substantially, a fall that itself affects the number of people in poverty."

What proportion of the headline income needs you hilighted was attributable for housing costs and children?

If median pay is falling then this is potentially concealing even bigger numbers.

MFW_ASAP

Loughton_Monkey wrote: »

It appears that they measure anyone below this as "In Poverty" which explains why they think over 13 million of us are in poverty! Who needs professional comedians when we have thinking like this?

It's astonishing if they only look at income and don't include outgoings. It's the same argument I had many times with the guys on here who said we should use salary multiples for calculating mortgage lending.

It forgets that someone earning £1M could have a £1.2M lifestyle and someone earning £20k could have a £10k lifestyle. Bonkers.

Loughton_Monkey

MFW_ASAP wrote: »

It's astonishing if they only look at income and don't include outgoings. It's the same argument I had many times with the guys on here who said we should use salary multiples for calculating mortgage lending.

It forgets that someone earning £1M could have a £1.2M lifestyle and someone earning £20k could have a £10k lifestyle. Bonkers.

Well the Rowntree stuff does build up the "Minimum Standard Income" by detailing what expenditure is considered 'reasonable' for the 'needs. However, the problem is that they are in cloud cuckoo land if they think that this "nice" standard of living should be given to every one of these £13 million, whether they choose to work or not..... It is simply laughable (at best) and downright ignorant (at worst).

The other point is a good one, but it tends to apply to mortgage applicants. My understanding is that mortgage applications, these days, do ask for details of the applicant's outgoings including, for example, loan interest on cars etc. If you have ever had a Wonga (PDL) loan then I think you are declined anyway.

The difficulty, though, is in how long and thorough do you want to make the mortgage underwriting process? I was a founder director of a mortgage company in the 1990's but things were a lot different in those days....

...but if I was still there, I would consider this type of thorough underwriting. I think there's room to be literally the 'cheapest' in the market on rate, with a reasonable 'fee'. That fee would cover perhaps a whole day of 'financial going over' of the couple concerned. Full details going back to their first job. How much they earned, saved, spent, and what they spent it on... A bit intrusive maybe, but I think it might be possible to cherry pick the really 'good' risks. Any hint of profligacy would decline them - or put them on a more standard product.

gazter

Loughton_Monkey wrote: »

...but if I was still there, I would consider this type of thorough underwriting. I think there's room to be literally the 'cheapest' in the market on rate, with a reasonable 'fee'. That fee would cover perhaps a whole day of 'financial going over' of the couple concerned. Full details going back to their first job. How much they earned, saved, spent, and what they spent it on... A bit intrusive maybe, but I think it might be possible to cherry pick the really 'good' risks. Any hint of profligacy would decline them - or put them on a more standard product.

HSBC probably operate pretty close to that policy also. If you want their best rates any evidence of anything other than exemplary behaviour and it's goodbye...