Savings down debt up

[Deleted User]

ONS figures for 2017 tell us that household debt exceeded savings for the first time since record began 30 years ago.
On average people saved just 4.9% of their incomes the lowest since records began in 1963.
Step change estimates that 1.4 million households used credit for basic living expenses.

Unsecured debt inc CC's, personal loans, and overdrafts jumped 9.4% to £209 billion last month. If you inc mortgage debt that rises to £1.58 trillion.

Non of this is good news, and the question must be how long can the UK go on living off tick? Are we heading for a disaster perhaps worse than the banking crisis of 10 years ago?

Thrugelmir

venison wrote: »

ONS figures for 2017 tell us that household debt exceeded savings for the first time since record began 30 years ago.
On average people saved just 4.9% of their incomes the lowest since records began in 1963.
Step change estimates that 1.4 million households used credit for basic living expenses.

Unsecured debt inc CC's, personal loans, and overdrafts jumped 9.4% to £209 billion last month. If you inc mortgage debt that rises to £1.58 trillion.

Non of this is good news, and the question must be how long can the UK go on living off tick? Are we heading for a disaster perhaps worse than the banking crisis of 10 years ago?

Being in debt doesn't appear to be the primary concern. It's more the concentration of debt. There are many people who have perfectly manageable levels of debt.

Much of the increase in unsecured debt relates to vehicle financing. Around 90% of Ford's retail sales are now finance driven. Dealers being incentivised to sell this option. Rather than offer discounts for cash.

The UK has been living off tick for years. From utility companies, ports, prime property, hotels, airports, etc. Assets have been sold to overseas investors. To fund the party.

economic

Oh statistics - why do you lie so much to us?

Cakeguts

Thrugelmir wrote: »

Being in debt doesn't appear to be the primary concern. It's more the concentration of debt. There are many people who have perfectly manageable levels of debt.

Much of the increase in unsecured debt relates to vehicle financing. Around 90% of Ford's retail sales are now finance driven. Dealers being incentivised to sell this option. Rather than offer discounts for cash.

The UK has been living off tick for years. From utility companies, ports, prime property, hotels, airports, etc. Assets have been sold to overseas investors. To fund the party.

Does it include student loans as well as car finance?

The problem with the car finance is that once you are in it you are stuck they have you for life. It is odd that there are so many people who think a new car is a good thing even if they can't actually afford to buy it without finance.

BikingBud

Cakeguts wrote: »

Does it include student loans as well as car finance?

The problem with the car finance is that once you are in it you are stuck they have you for life. It is odd that there are so many people who think a new car is a good thing even if they can't actually afford to buy it without finance.

Yet we absolutely and without question accept that excessive debt to buy a house is good

And yes i get the bit about appreciating and depreciating assets but those effects are temporal and we must assess wether the inflated price we pay will be covered by the growth. As it stands now that absolute assertion that property always goes up may need to be reassessed.

For many day-to-day debt on a credit card is about removing the need to carry cash and ease of payment. Certainly my use enables full visibility and easy reconciliation to keep track of the budget.

economic

BikingBud wrote: »

Yet we absolutely and without question accept that excessive debt to buy a house is good

And yes i get the bit about appreciating and depreciating assets but those effects are temporal and we must assess wether the inflated price we pay will be covered by the growth. As it stands now that absolute assertion that property always goes up may need to be reassessed.

For many day-to-day debt on a credit card is about removing the need to carry cash and ease of payment. Certainly my use enables full visibility and easy reconciliation to keep track of the budget.

Plus you get protection on credit cards. I always use credit cards to pay for things. I make sure i pay back in full before interest gets charged.

True about property - there is a cycle to everything and how do we know now is not the major top in prices? It could very well be for many decades.

norsefox

economic wrote: »

Plus you get protection on credit cards. I always use credit cards to pay for things. I make sure i pay back in full before interest gets charged.

True about property - there is a cycle to everything and how do we know now is not the major top in prices? It could very well be for many decades.

A good amount of the CC increases have been put to the proliferation of Contactless payments.

I for one put absolutely all my spending through my Contactless credit card, which was only given to me last year (having had the function available on debit cards for quite some time before).

Despite paying it off in full, my credit report will show £600-£1000 monthly costs on it. I suspect I!!!8217;m far from alone.

EDIT: The removal of charges against credit cards for bookings/flights etc will no doubt have a significant bearing on this too.

shirlgirl2004

economic wrote: »

Plus you get protection on credit cards. I always use credit cards to pay for things. I make sure i pay back in full before interest gets charged.

True about property - there is a cycle to everything and how do we know now is not the major top in prices? It could very well be for many decades.

That's not what the property cycle shows. After each crash the prices are still higher than after the last crash.

economic

shirlgirl2004 wrote: »

That's not what the property cycle shows. After each crash the prices are still higher than after the last crash.

Either you are looking at it too short term or you are only looking at nominal prices and not real prices.

Cakeguts

norsefox wrote: »

A good amount of the CC increases have been put to the proliferation of Contactless payments.

I for one put absolutely all my spending through my Contactless credit card, which was only given to me last year (having had the function available on debit cards for quite some time before).

Despite paying it off in full, my credit report will show £600-£1000 monthly costs on it. I suspect I!!!8217;m far from alone.

EDIT: The removal of charges against credit cards for bookings/flights etc will no doubt have a significant bearing on this too.

That is a different view I think to the people who are getting into debt. The old view was that you didn't buy anything on a credit card that you didn't already have the money to pay for in the bank and the use of the credit card was just for convenience rather than for credit.

I think the difference between that credit card use and the debt figures is that people are using the credit cards to buy things that they can't actually afford to buy. Most of the people who buy cars on finance buy them on finance because they can't actually afford to buy them with money that is in the bank.

The difference between buying a car and a house is that you have to pay to live somewhere. You don't have to have a car unless you made the choice to live somewhere where there isn't very much public transport and to work somewhere not local.

DiggerUK

venison wrote: »

........Non of this is good news.......

Really. What has brought on this attack of the drama queens.

Debts properly serviced are a good thing. Debts only become a problem when they cannot be serviced.
Where is the leveraging becoming a problem, a la 2007.

Please stop this nonsense, you will frighten the children..._