Understanding disparity around us

solidpro

Having a bit of an existential moment... bear with me. Also searched for the best 'category' to post this in and this is the best I could find.

I listen to talk radio a lot, twitter, talk to friends (albeit in similar bubbles to me) and I've absolutely first hand witnessed energy bills quaroupling, shops closing down, homelessness, foodbanks etc. However I live in Milton Keynes, which is a very 'retail' rich town and if I have to go to the shopping centre on a Tuesday morning, I am absolutely staggered at the amount of people with heavy shopping bags, getting their nails done, eating in restaurants (which in my recent experience is never less than £20 per person, if you're disciplined). I also see this in other places like Bournemouth, Southampton, London...  We ate out recently - 2 adults and 2 kids in a really low-rent pub and it was £100. Same a few days later (we were trying to have a holiday which meant eating out) and it was £120. We kept saying 'thats 10 day's food shopping we just spent'!

I've heard people crying on the radio because they're so desperate to even turn the cooker on. I'm just amazed that each end of the spectrum is so different and the gap in the middle seems so vast. Trying to put some meat on the bones of what I hear in my bubble, it seems to make sense that hundreds of thousands, if not, milltions of UK people in private and public jobs have seen massive real-term pay drops in the last few years and with fuel and energy skyrocketing, that can only be hugely crippling.

I thought of this when I saw the post threads in 'savings in investments' - so many starting with something like 'have a lump sum to invest' or 'easiest return on huge pot'.... Is it mainly people inheriting capital from old people dying in very very overpriced houses that get sold off?

I may be answering my own question - am I simply in a lucky bubble, in a bubble town in a bubble part of the UK or are the amount of people unable to afford a £4000 increase in their energy bills (for example) tiny, but we hear about it more so in the information age? Frankly, one minute I am amazed that there isn't rioting in the streets, and people smashing the windows of huge companies making huge profits whilst putting up a poor person's energy bill from £1000 P/A to £5000 P/A. And we essentially have had no functioning government for about a year now. And the next minute I'm thinking 'of course nobody is rioting - they're eating £50 lunches in Pizza Express!'

I try to invest every last penny I have left over each year, but right now it seems nothing makes sense. Do you lose 9% to inflation because you're waiting for some more certainty in investments or do you lose 9% investing too soon? If I was wealthier, the obvious thing to do is to put all our money somewhere very boring (like Switzerland!) for a while. 

Or....final thought is this simply the bitter ending of 'capitalism didn't win, it just failed last'?

Thoughts?

eskbanker

solidpro said:

I thought of this when I saw the post threads in 'savings in investments' - so many starting with something like 'have a lump sum to invest' or 'easiest return on huge pot'....

In terms of threads on this forum, it's worth bearing in mind that this board in particular isn't representative of the population as a whole, whereas one like the debt-free wannabe board paints an entirely different picture!

solidpro said:

I may be answering my own question - am I simply in a lucky bubble, in a bubble town in a bubble part of the UK or are the amount of people unable to afford a £4000 increase in their energy bills (for example) tiny, but we hear about it more so in the information age? Frankly, one minute I am amazed that there isn't rioting in the streets, and people smashing the windows of huge companies making huge profits whilst putting up a poor person's energy bill from £1000 P/A to £5000 P/A

There is certainly a fair bit of popular anger about energy company profitability, with calls for boycotts, etc, but I'm not aware of any window-smashing (yet)....

solidpro

eskbanker said:

solidpro said:

I thought of this when I saw the post threads in 'savings in investments' - so many starting with something like 'have a lump sum to invest' or 'easiest return on huge pot'....

In terms of threads on this forum, it's worth bearing in mind that this board in particular isn't representative of the population as a whole, whereas one like the debt-free wannabe board paints an entirely different picture!

I will go and have a dig around... Also, I'm not convinced in my own mind that if I drove anywhere in the UK which was listed as the most impoverished, I would notice anything different from, say 2006 or 2012. Except less libraries and police

Could it be, that it takes 50 years for this country to turn into the future shown in 'Children Of Men' than just 10?

Lastonestanding

The media seem to find people moaning about poverty. I look after a 95 year old relative that has £70k in the bank and it increases by £800 per month. Poor pensioners?
My ex wife has been on benefits for over 15 years, she gets more money than me, yet occasionally visits the food bank.
Some people are savers and some spend every last penny.
I believe the really poor are the ones that don't plan or save for the future, it may also be the case that people don't claim all the benefits they are entitled to.
I do a little gardening in my free time, there is always a way to earn more money. I am relatively poor, but I am a saver and a doer.

dunstonh

Frankly, one minute I am amazed that there isn't rioting in the streets, and people smashing the windows of huge companies making huge profits whilst putting up a poor person's energy bill from £1000 P/A to £5000 P/A. And we essentially have had no functioning government for about a year now.

Those energy companies with large profits this year has similar sized losses two years ago.  Their earnings are highly volatile and they need to average the loss periods out with the positive periods.  So, you should not look at one year in isolation.

whilst putting up a poor person's energy bill from £1000 P/A to £5000 P/A.

The early projections don't show figures going up that much.     If someone has suffered that level of increase it usually means that they were using more than they were paying for in the first place i.e. the £1000 a year was too low to begin with and got into usage arrears.  This means that not only will their monthly payment go up to cover the increased price but they also need to catch up and pay for that what they used but didn't pay for a year or two earlier.

If I was wealthier, the obvious thing to do is to put all our money somewhere very boring (like Switzerland!) for a while

Why would you do that?

Trying to put some meat on the bones of what I hear in my bubble, it seems to make sense that hundreds of thousands of people in private and public jobs have seen massive real-term pay drops in the last few years and with fuel and energy skyrocketing, that can only be hugely crippling.

The vast majority will come through it with relatively minor budget adjustments.   Those already tight on budget will suffer significantly.   The one positive is that there is a shortage of employees.   So, the wages for jobs will rise to attract them.   The problem is that a lot of people have become lazy and want to rely on the state and will prefer to suffer shortages rather than get a job.

Sea_Shell

I'll admit I'm "in a bubble" too.

However I do try and see things through others' eyes.

I know that within my extended family, there's quite a lot of denial going on at the moment...and I don't think the penny has really dropped yet ☹️


There was a BBC article recently about the "squeezed spenders" who are reluctant to cut down on their "little luxuries" as they feel they deserve them.

There will always be those genuinely unable to cut spending as they're already down to the bone, with real essentials.   These people will need help.

But I think there are a large section of "the middle" who don't want to face any reduction in their standard of living.


Nationally, I think we're still a long way from the likes of Sky TV going bust, or Costa coffee 😉 

Bobziz

Murdoch, Rothermere and the Barclay Bros would be very pleased with some of the comments so far. Lazy entitled poor people. Is this really where we're at ?

enthusiasticsaver

As others have said this board is not the typical UK consumer and yes I too still notice people shopping and eating out as indeed we do too.  Energy bills are due to go up but for the majority of middle and higher income people it will be a question of tightening the budget rather than giving up food or turning the cooker off.  As you say the poorest will be the ones to suffer most or those who have little leeway in their budget either through over extending on debt or who have costly lifestyles and frozen income.  For most of us though the higher bills have not yet kicked in and we are in summer where less fuel is used anyway.  I check my direct debit with British Gas every month and it has gone down four months in a row and we have almost £500 credit on our account even though we are on SVR. I am sure we are not the only ones. 

We have a vast section of people in this country who are either very good at putting their heads in the sand or who take the view that luxuries are essential and whether this continues when the autumn and winter higher bills start remains to be seen.  We will save less towards holidays probably and eat out less when the bills start to rise again.  We use the cars less too and are better at meal planning and food shopping now we are being more careful. 

Expotter

Sea_Shell said:

I'll admit I'm "in a bubble" too.

However I do try and see things through others' eyes.

I know that within my extended family, there's quite a lot of denial going on at the moment...and I don't think the penny has really dropped yet ☹️


There was a BBC article recently about the "squeezed spenders" who are reluctant to cut down on their "little luxuries" as they feel they deserve them.

There will always be those genuinely unable to cut spending as they're already down to the bone, with real essentials.   These people will need help.

But I think there are a large section of "the middle" who don't want to face any reduction in their standard of living.


Nationally, I think we're still a long way from the likes of Sky TV going bust, or Costa coffee 😉 

Exactly right, from that BBC article:

"according to new research by Grant Thornton, an accountancy firm, and Retail Economics, an economics consultancy.

The research revealed one in four adults in the UK feel they are financially stretched, but are still reluctant to let worrying about the rising cost of living impact their spending habits.

These "squeezed spenders" recognise the need to cut back some of their spending but generally prefer to borrow, dip into savings or use buy-now-pay-later schemes, rather than allow money worries to get in the way of purchases."

I've seen this first hand on several people I know, mostly in their late 20s or 30s. Saddled with debt, but refusing to cut back on holidays, days out, eating out, etc.

I would also add a disparity between perception vs. reality, mostly influenced be the media. What we normally see are  vastly exaggerated and sensationalist headlines in order to attract ratings or for clickbait. Add to this the massive bias of most media organisations, mainly driven by political affiliations, and we get presented with a distorted view of reality that suit their own agendas. Not to diminish the fact that there's real hardship out there, but things are not always as they are presented; just look at most TV programmes and adverts and their representation of British society, I certainly don't recognise it as my experiences.

molerat

Don't worry.  Some of those complaining they can't pay the energy bill will be the same ones you saw having their nails done etc.  Many can't break habits and see the bigger picture.  As the old saying goes .....Cut your coat according to your cloth.

One of my relatives was complaining on social media they could not afford to top up the gas meter, the previous evening they were out clubbing which was obviously more important than keeping the kids warm.

Nothing that is happening is "new", it is the same old situation in a different guise.  I remember back in the 70s there was one guy I worked with on the same pay as me in a reasonably well paid job paying ridiculously cheap rent who was always on the scrounge a week or two after pay day.  As soon as the money was in the bank they were off to the supermarket and filled the boot of the car, ate and drunk like pigs for a week and a half then cupboards empty and no money in the bank.  He also had a second job but still could not make ends meet.

Brie

A year back before all the energy thing kicked off and the struggle in the Ukraine all the whinging was about the "poor" young people who are working so hard but would never be able to save for a down payment to buy a house.  And all because they have the latest iPhone, have 3 Starbucks a day, and have avocados on toast very morning for breakfast.  And there are some people like that on the debt boards who do need the obvious pointed out - if you are in debt you can't eat out, you can't have the latest tech or a sky subscription.

I think the canny amongst us were already tightening their belts and the rest of us are following suit but in our own fashion.  Some will make more adjustments as it's MSE, others because it's that or insolvency.  I won't be surprised if there are protests but I also won't be surprised if they are relatively small as most of us just wouldn't bother.