Household debt rises to highest level since 2008

chucknorris

CLAPTON wrote: »

consumer consumption is, of course, the sole purpose of economic activity;
sometimes one chooses to delay current consumption so one can consume more tomorrow.

There was a documentary on tv (quite a while ago), it looked at children (who are now adults). They offered the children an instant marshmallow, or two if they waited 15 mins. They then compared the results to how they turned out as adults, and there was a significant correlation between those who were patient and received a greater reward and those who were more successful later on in life.

I found a link:
https://en.wikipedia.org/wiki/Stanford_marshmallow_experiment

I will always remember one child who snatched the marshmallow and ate it, before the adult could even barely start asking, never mind finishing the question.

iantojones40

I wonder how much of that debt is pcp deals on cars?... People borrowing money to rent a car, utter insanity.

wotsthat

iantojones40 wrote: »

I wonder how much of that debt is pcp deals on cars?... People borrowing money to rent a car, utter insanity.

Interesting thought. I happen to think that now that it's a touch more difficult to get yourself in a mess with payday loans stupid people will move onto getting cars on PCP to impoverish themselves.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Well as the UK economy is substantially reliant on consumer spending that explains the economic "performance" seen this year.

You seemed to be celebrating it recently though when discussing Brexit....;)

Theres quite a difference between "celebration" and pointing out all of the many predictions didn't come through to fruition.

If anyone who disagreed with you can't now point out the facts since Brexit without it being assumed they therefore "celebrate" every part of the economic system, then I guess that shows the level the discussion has been bought down to.

kabayiri

wotsthat wrote: »

Interesting thought. I happen to think that now that it's a touch more difficult to get yourself in a mess with payday loans stupid people will move onto getting cars on PCP to impoverish themselves.

My relative has 2 very nice 4 wheel drive 2016 cars, without any obvious form of income from work.

I do know at least one of them is linked to Disability support payments.

This is not unusual. There are regular radio ads up here promoting cars financed by these support schemes.

What was interesting was how he was encouraged to upgrade the deal offered.

Is that good business practice, or a dubious way to get someone over extended?

steampowered

Graham_Devon wrote: »

The people in power have warned about high debt levels, but seem very reluctant to actually do anything about it other than make credit ever easier to get hold of.

I don't think you can blame "people in power".

Individuals are responsible for deciding how much debt they take on. If an individual takes on too much cheap credit and finds him or herself in trouble when interest rates rise, they have only themselves to blame.

Graham_Devon

steampowered wrote: »

I don't think you can blame "people in power".

Individuals are responsible for deciding how much debt they take on. If an individual takes on too much cheap credit and finds him or herself in trouble when interest rates rise, they have only themselves to blame.

Not strictly true though - debt has to be a regulated activity, which it is, but therein lies the problem. The regulators are giving lots of warnings and Mark Carney himself has been warning that househould debt is increasing for around a year now. One of his main concerns is household debt - as he said himself not too long back, it;s one of the biggest economic risks to the UK

A debt problem is not just a problem for those holding the debt. As we saw with the credit crisis, it's a problem for the lenders too. To be back at pre crisis levels quite so quickly, at the very least, should raise questions, especially so now, when we are still on emergency support through QE and interest rates are so low.

Warnings are absolutely fine. But they are only that. Warnings are not action to deal with a (growing) problem.

mayonnaise

steampowered wrote: »

I don't think you can blame "people in power".

Individuals are responsible for deciding how much debt they take on. If an individual takes on too much cheap credit and finds him or herself in trouble when interest rates rise, they have only themselves to blame.

The notion of personal responsibility has gone out of the window a long time ago in our Western society, I'm afraid.
When an idiot uses Apple FaceTime while driving and causes a crash, it's Apple's fault. https://www.theguardian.com/technology/2017/jan/03/apple-lawsuit-facetime-car-crash-iphone-patent
When an individual takes on too much credit it's the government's fault.
When one is poorly educated and unemployable, it's Europe's fault.

And so on...and so on...

wotsthat

Graham_Devon wrote: »

Warnings are absolutely fine. But they are only that. Warnings are not action to deal with a (growing) problem.

Them in charge have been doing more than warn though.

Mortgages are more difficult and complicated to get, the payday loan landscape has been changed and anyone wishing to borrow to buy a second home or BTL may well have been discouraged by recent tax changes.

Meanwhile, hopefully, any future bank failure costs will be paid by shareholders and depositors rather than the taxpayer.

Plus the regulators have warned and so has the BoE no less.

I think we should leave people to it. If they're engaging in problem lending or borrowing just what are we meant to do?

I've got a bee in my bonnet about PCP but, at the end of the day, stupid people will do what stupid people do.

kabayiri

wotsthat wrote: »

...
I've got a bee in my bonnet about PCP but, at the end of the day, stupid people will do what stupid people do.

Sometimes the lenders were less than diligent, especially when it came to brokerage businesses white-labelling car finance products.

I remember one case which involved a broker being defrauded out of 6 Ferraris !!

Well, I suppose if you are going to make off with a car, you might as well aim high :rotfl: