2022 Frugal Living Challenge

nmaria

So the bank of England had increased the interest rates by a massive 0.5.
how is this going to affect you?
we are on the other side now so hopefully our savings rates will increase as long as we can afford to save some pennies.

Primrose

Well today's Bank of England  interest rate rise from 1.25% to 1.75%, the biggest hike in over 20 years apparently, is certainly going to cause added pain to those with mortgages and debt of any kind.  Now more than st any time had it been important to live within yiur means and always try to have miney for emergencies.  

I recall the time when our mortgage interest rates rose to 15%. It seems unbelievable  now but my goodness. , did we have to learn how to tighten our belts then.   Somehow we managed - ( we certainly ate an awful lot of homemade soup during that period !), and when interest rates started dropping again we left our  mortgage payments at the higher level.  Enabled us to pay off the mortgage early, which  certainly proved a blessing when redundancy hit us again in later life.  So glad we planned for the longer term.  You never know what pressures may be around the corner even when your boat seems to be sailing on calm seas.    

missmoneywatch

We have locked into a five year mortgage at a low rate thankfully so at least that won't jump up straight away. At the moment we don't have any major debts which again I am grateful for, this is going to add a lot of pressure on people who are struggling already. 

florianatwobob

I locked in at 2.89% for 10 years about 4 years ago. Mostly because Brexit was causing uncertainty and I only had 10 years 9mths left on my mortgage. It did mean we were paying more at the time but actually only worked out as £10 p/m more than our previous payment. 

When I first took my mortgage out I worked for a mortgage provider and saw the horrific interest rates people had paid previously and the negative equity mortgages that they’d taken out just to move. 

RateTartExtraordinaire

Not much immediate direct effect with interest rate rise. I paid off my mortgage a few years ago but I can remember rates in 1992 which were painful. I survived on microwavable pizzas (like cardboard) and marmite as my sandwich filling! But I was younger and less health conscious back then. Don't think I would suggest that as a sensible diet now. 
My student loan is Plan 1. Both Plan 1 and Plan 2 the interest rate is set every August for the following year, but I will only pay back 9% of my income over the threshold. Interest rates are the LOWER of either the Bank of England base rate, plus 1% or the RPI (inflation). Martin Lewis is warning that some with student loans could face from 9% to 12% interest rate on their loans. I'm not too worried as I'm not earning enough at the moment as I've just gone self employed just over a year ago and my loan will get written off in about 8 years time or when I hit 65. If my earnings take off (I wish!), I will be happy to pay more!
  

I've just checked it again. For loans taken out between 1998-2005 The loan is wiped when you are 65. For loans taken out between 2006 and 2011, the loan is wiped 25 years from the first April of graduation. (when you were first due to repay).

Primrose

We had grilled fish today resting on a sheet of foil under the grill. When clearing up afterwards I found myself washing the foil and puttin it back under the still warm grill to dry and re-use.   Think my OH would probably just have chucked  it in the rubbish bin!  Every little saving helps!  

Living_proof

Primrose said:

We had grilled fish today resting on a sheet of foil under the grill. When clearing up afterwards aI found myself washing th foil and outing it back under the still warm grill to dry and re-use.   Think my OH would probably just have chucked  it in the rubbish bin!  Every little saving helps!  

I do this and also wash out and reuse decent plastic bags. I think I get three or four uses out of most foil and bags so good for the environment too. 

mumtoomany

Hi all. @Primrose, that explanation of recession was spot on. OH and I married in 1979. We bought a corner shop business. At that time it was one of around twenty shops in the row. Butcher, baker, newsagent, small supermarket, shoes, vegetables, fish and chips, wallpaper, everything was available. Then recession started to hit. Local manufacturing businesses closed, people had no money, shops started to close. We were the last but one to close down, because the shop came with a house and the total rent was only £400 a year! But was reliant on the shop being open. By the end OH was working full time, I was running the shop six days a week and working part time evenings and Sundays, and ploughing money into the shop just to keep our heads above water. By 1981, when we moved out, the street looked like a ghost town and many people had no work. We had found a house to rent, in 1982, but were both been made redundant that autumn and stayed out of work for a year. Recessions can be hard, don't think it won't happen to you, start saving now if you can. Hope you are all well, hugs, mumtoomany.xx

Jellytotts

The interest rate rise adds around £7 a month onto our mortgage (£25k remaining). Our mortgage is a tracker and portable (we know we will need to move again in the next few years) so it works for us.  We over pay by between £20/£50 a month depending on what’s available so if we need to we can stop that and still feel a difference at the moment.

1 years 0% interest loan left to pay for our solar panels which we can always clear with savings if required to up our monthly income a bit more and our help to save accounts have just had their final payments in so next month those payments and the final savings pots have been directed straight into premium bonds before we get used to having them.  Still got options but not liking where this is all heading.

Primrose

Hi @mumtoomany.  I recognise all this only too well how the same thing happened in the area where we lived. And already due to Covid and now the energy crisis history is repeating itself.   We older people have sadly learnt the lessons of history but for many young people who have only perhaps known more affluent times, I think the coming months will be a severe shock.   And for those who have become used to living on credit life will be very difficult.