Article in DT comments on the survey by HSBC.
6m households have less than a weeks money available.
www.telegraph.co.uk/finance/personalfinance/9003467/Six-million-households-have-only-five-days-savings.html
It's not just people unlucky to be out of work/suddenly taken ill at a young age.
I know of a couple 2 years away from retirement with zero cash - unable to meet £200 contribution to her mum's funeral expenses.
She and her husband worked all their lives, rented home, 2/3 x foreign holidays per year, new car every 2/3 years.............and they have not saved a penny towards their retirement, not even a pension in the last 20 years. They got a share of the mother's house sale, (£30K IIRC) 10/12 years ago but spent that as well
Irresponsible?
Lived for the day?
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>> Irresponsible?
>> Lived for the day?
Absolutely.
I know people like that. A minority of people at work are in the pension scheme (the company will put in double your contributions to a money purchase scheme). I have pointed out that it is no-lose, free money - you get the tax relief on your contribution, and you can take 25% of the fund tax free under current rules when you retire - which makes 75% of the fund virtually free. They still won't do it, because -
- you might die before you retire
- pensions schemes are a fiddle
- can't afford it
- I can't save enough to make me better off when they take it off my benefits (some truth in this one)
etc., etc.
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A significant pension - or home ownership - looks so far away for many the temptation is to not bother trying to achieve either.
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>>She and her husband worked all their lives, rented home, 2/3 x foreign holidays per year, new car every 2/3 years.............and they have not saved a penny towards their retirement, not even a pension in the last 20 years.<<
I know people in that position that haven't had the foreign holidays or the new cars, nor had wages high enough to save for retirement.
Pat
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I know a lot of people that have no cash savings, no home ownership, never had a foreign holiday and owe thousands to credit card companies, banks and utilities and then write their debts off and walk away from them.
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...and then write their debts off and walk away from them...
Lots of debt punters at the CAB office, I imagine.
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If there ever was a more shining example of the banks' irresponsible lending you see it there.
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...If there ever was a more shining example of the banks' irresponsible lending you see it there...
Takes two to tango, but I agree some pre-credit crunch lending was irresponsible.
I've been offered credit card limits which I'd have to sell Iffy Towers to repay.
Not so much recently, the Halifax reduced the limit on one of my cards because I never use it.
For what it's worth, that's mostly because of new regulation.
The credit card companies must now take the limit - not the balance - into account for their audit.
Thus my high unused limit is 'money' they cannot lend elsewhere.
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Most of the people at work are like that. I am forever being asked for loans, salary advances, £10 to tide someone over until pay day.
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...I am forever being asked for loans, salary advances, £10 to tide someone over until pay day...
Better to ask you than use Wonga or one of the other payday loan companies.
Sadly, I expect many of the people who ask you are doing both.
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>>the Halifax reduced the limit on one of my cards because I never use it.
>>For what it's worth, that's mostly because of new regulation.
>>The credit card companies must now take the limit - not the balance - into account for their audit.
>>
>>
One of my credit cards has a high limit created about 20 years ago when all my business expenses were loaded on it but rarely used since.
I have not had it targetted although it is an obvious almost dead account.
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>> I know people in that position that haven't had the foreign holidays or the new cars, nor had wages high enough to save for retirement.
2/3 foreign hols per year, new car(s) every 2/3 years, £30K inheritance
Surely an opportunity to save as the money WAS there.
I appreciate many who work scrape to get bye week after week and cannot save much for their old age but many others fritter their opportunities to save - holidays, pub/ciggies, bookies, cars, clothes/shoes..........
Last edited by: VxFan on Tue 10 Jan 12 at 10:25
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...but many others fritter their opportunities to save...
The unpleasant combination of low interest rates and inflation reduce the incentive to save even if the domestic budget allows it.
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>>and cannot save much for their old age but many others fritter their opportunities to save - holidays, pub/ciggies, bookies, cars, clothes/shoes..........<<
Many do FB, but on the other hand many do save for their old age but never live to enjoy it.
It's a gamble and one that many are not prepared to take.
Pat
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"It's a gamble and one that many are not prepared to take."
That's an option of course as long as, when they run out of money they don't come calling on the those who have prepared to put something aside or the current generation who are struggling economically.
Those lucky enough to have been working over the past thirty or forty years have worked through and enjoyed for the most part a period of relative prosperity and high employment. If they nave not taken the opportunity to put anything by for their old age I don't see the current generation, who may be facing years of recession and unemployment, being particularly sympathetic to their plight
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I think the lack of available cash is often as much down to peoples attitudes rather than the inability to aquire a few hundred quid for emergencies.
I see the way my BIL wasted thousands each month, the way his ex does now, but they have no pensions, no savings and mountains of debt - the funny thing is they have CCJs so its not like they dont know what can happen, but the way they spend their money, still in this gloomy time, beggars belielf.
My wife pays into a pension, a generous one, she also has a direct debit to a high interest ISA and in addition she also puts away anything over £50 in her account the day before payday. Now sure, this is indicative of her being married to me as she never had a savings account before we married, now she has 3, but now she has money, shes very attached to her balance.
People choose to be irresponsible in the main so its no real suprise, but they will only learn the hard way.
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I am not that surprised.It's the way of the world spend now and don't worry about tomorow.
Not easy to judge people if you are on a low wage bills to pay savings will be the last thing you can do.
A report this morning on the television for this area 30%of children live in poverty which isn't good.
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>> A report this morning on the television for this area 30%of children live in poverty
>> which isn't good.
A misleading set of words that. 30% dont have enough food to eat? 30% dont have clothes to wear or shoes on feet? 30% dont get medical care? 30% dont have a dry warm bed to sleep on at night? 30% dont go to school? 30% dont have a TV to watch?
No none of those things apply, Strange thing "poverty"
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Problaby all what you mentioned that is poverty.
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>> Problaby all what you mentioned that is poverty.
Indeed, And those 30% get all of those things.
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What wouldn't the average Kenyan (to name one country out of umpteen) give to live in "poverty" in the UK?
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I paid into pensions since I was 20, for over 30 years. Over the latter years I've increased my contributions. In man years the amount in the pot at the end of the year didn't even equal the amount at the start, let alone when you added my additional input (and my employers). And the value of what I can purchase is also going down. I'm currently not working but was contracting till recently on a good rate, and seriously thought about putting a lump into a pension pot, but nothing can persuade me that it'd be a good investment at the moment. Hence the solar panels and other not-insignificant expenditure.
Having said that, I do have savings which should cushion retirement (if I ever reach it. they keep moving the goalposts!!).
Last edited by: smokie on Tue 10 Jan 12 at 10:35
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My first mortage endowment is maturing later this year, after 25 years. I no longer need it to pay off a mortgage, which is just as well as it would cover about half of the intended sum due. My wife had an Equitable Life 'guaranteed' pension, which is no longer guaranteed. So you can understand why we are ever so sliightly sceptical when it comes to financial industry, pensions, etc. Property all the way for us.
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>> 30%of children live in poverty >>
live in relative poverty.
By definition you cannot eradicate "poverty" in the UK.
"Poverty is defined by the Government as ‘household income below 60 percent of median income’. The median is the income earned by the household in the middle of the income distribution."
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A friend of mine is probably fairly typical of many of the younger generation. He has a good job, a house on a 100% mortgage, a car on some sort of credit, and expensive contracts for iphone, cable TV etc. While interest rates were low, whereas us oldies would have been paying off the mortgage, he was using any surplus cash to to buy ipads and other toys.
So when someone has a good job but is always broke and has no emergency cash, what has gone wrong with the system? Bad example from parents or something wrong with the education system?
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>> Irresponsible? Lived for the day? >>
It is a culture thing, arguably fostered in the UK by the benefits system. In countries where there is no state "safety net", even the really poor (as opposed to UK "relative poor) try to save some money for a "rainy day".
See this academic paper from a few years ago:
www.niesr.ac.uk/pdf/241106_113149.pdf
"Means testing of state pensions has been criticised for discouraging individual savings and work effort, and thereby creating a dependence on the welfare state."
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I wish pension advice made more noise on the impact of delaying contributions will make to your pension when you retire. Just a few years means the difference between a £50k pension and £35k or less.
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My friend has managed to get into around £30k debt since graduating. Her work pattern has been 20k job, dole for a few months, 20k job etc...
Most of that 30k debt is because she has been down right irresponsible. She cannot afford to pay any of it back. Its mostly pay day loans etc.
I have a bit of debt myself and not much money left at the end of the month and what savings I have the taxman will take off me, but at least I do save for that.
My parents got into debt problems because my dad had an accident and was unable to work for 6 months, meaning they had to take a out a high interest loan to live off for six months. Thankfully they will soon be in a position to pay of all their debts.
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The other side of the coin.
I know of a family who both Mother and Father have always worked in low paid, unskilled jobs but secure and much loved jobs nevertheless.
During the last 20 years their nett income has never exceeded £2250 per month, and they have brought up, very succesfully, three children on that as well.
They've had to have a car (of sorts) to get to work, but one takes the other addingto the length of the days and petrol costs.
Without a doubt this family would have been better off on benefits and not working but chose not to.
Should we begrudge them help in their twilight years for not claiming benefit when they could have done?
Should they be deprived in old age for producing three kids with a sound work ethic as well?
Pat
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£2250 per annum net is £27,500 per annum - Equivalent I would think to somewhere around £32,000 Gross. Not a shockingly low income. Now their children have grown up they should be putting some of that aside for their old age. The current generation, possibly earning a lot less than that, aren't going to be able or indeed willing to pay increased pensions or benefits to our generation.
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>> and what savings I have the taxman will take off me,
>>
How/why is HMRC going to take your savings? Or do you mean that you are saving up to pay your tax bill?
If so, that is the way it crumbles.
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If you're feckless the welfare state will look after you. If you save and are sensible it will take it off you first. Why bother saving at all?!
I'd rather find work/sources of money I can do until I snuff it. Then I don't need to waste money saving for a pension which is linked to what bankers and other idiots get up to. My dad had a pension. It was supposed to pay him a lot. It pays about 10% of what was projected. He should have enjoyed the money instead! His contributions would have paid for foreign holidays and new cars etc.
Jobs just aren't secure any more. You can be made redundant out of the blue and any money you have saved can be eaten away surprisingly quickly. Then you're in the same boat as those that didn't even try to save!
Having a sustainable existence that doesn't rely on one source of income ie a job seem to be the way to go to me.
No-one knows how long they will live for. You can easily be flattened by a bus or have a heart attack at 50 odd. May as well enjoy life now more rather than deny yourself everything for a future that may not even exist for you. That said, not having 3 - 6 months living costs tucked away is a bit dim!
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"If you're feckless the welfare state will look after you. If you save and are sensible it will take it off you first. Why bother saving at all?! "
Apart from any moral issues I rather suspect that there is going to be a sea change in what the state will provide and in what taxpayers will be prepared to cough up. You might die when your are 50, true. However its actually unlikely and the more likely scenario is that you will live into your eighties scrimping by on the state pension and wishing you had put by a bit of your income when you could.
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The state is unlikely to do any realistic rollback of the help that it provides. It may change criteria, but 'playing' the system is a profession in itself and those who know what they are doing will likely continue to.
The working tax credits are actually a little low really, they should certainly be higher, but in principle I quite like them as they recognise that the cost of living has for some time outstripped low end wages.
Its also for want of a better phrase, a genuine Robin Hood tax as it takes from the wealthy and redistributes it to people in work but who dont earn much by doing the right thing. It needs refinement as do most things, but its a useful top-up.
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>> Its also for want of a better phrase, a genuine Robin Hood tax as it
>> takes from the wealthy and redistributes it to people in work but who dont earn
>> much by doing the right thing. It needs refinement as do most things, but its
>> a useful top-up.
>>
I agree with the principle, but my understanding is that when you talk about "people who are in work but don't earn much" we are talking about salaries (or household incomes if more than one earner) of up to £40k (down from almost £60k in the heyday of WTC). If we are 'redistributing' on such a large scale we are undoubdetdly taking with one hand and giving back with the other for a large swathe of people - why not just tax them less in the first place?
It's also not exclusively taking from the wealthy, it's taking from all households with taxpayers and no children. Wealth is being redistrubuted from those without children to those with :-)
Peter
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...Wealth is being redistrubuted from those without children to those with :-)...
Grrr!
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>>I agree with the principle, but my understanding is that when you talk about "people who are in work but don't earn much" we are talking about salaries (or household incomes if more than one earner) of up to £40k<<
Your understanding is wrong. The WTC is only available to households ( not individuals ) who's total income is less than £18,000. So you cant have a couple earning £16,000 each lets say claiming it - they also have a savings limit aswell for you to be eligible.
They are of course reducing the tax burden at the lower end of the pay scale through the income tax threshold so that certainly helps, esp the lower paid self-employed, its one of the few Lib Dem ideas I genuinely like.
>>It's also not exclusively taking from the wealthy, it's taking from all households with taxpayers and no children. Wealth is being redistrubuted from those without children to those with :-) <<
WTC is not dependant on having children, I think your confusing it with child tax credits which is a different benefit, although there is I think a bonus if you do have childre as it asks the question on the forms.
It takes from all taxpayers but its available to all in work below a certain income so those at the bottom end likely get more back than they put in.
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I would feel uncomfortabel if we did not have any money saved for emergencies.Some people don't seem to care live today worry about tomorrow.
Maybe they have a point I don't know.I don't like to count every penny we spend but I have been fortunate always in work.
I would be still working now if it wasn't for circumstances.
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I know of many people who don't save for pensions and live for the day - possibly comes with being involved first hand with Hospices.
Friend's mum and dad worked all their lives, died within 6 months of each other in their late 60s and the balance of the pension fund went back into Standard Life's coffers. Over £100k of a fund. Their dream was always to go on the Orient Express but couldn't afford it - as well as the house they left over 30k in cash. But their perception was that was needed for rainy day and not for treating! They had never taken a loan in their life, not even from a relative.
I am in my early 40s and I think many in my age group and younger have lived through Pension Fund fraud, have seen Pension Fund changes, have seen bank collapses and think well why should I contribute to that? Also, with the increasing of pension age there is also a feeling that by the time we get to late 60s, the goalposts will have moved again and in reality, we will probably never "retire".
And thats before I go onto mortgage endowments.......... :(
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That is a problem Bobby,lots of people feel conned and think what the hell.We took out endowment and we where short to pay off the morgage.Lucky I always saved in BP shares and this payed for the morgage.
I feel sorry for the people you mentioned live is very unpredictable.I look at myself and my brother we had a laugh the other day on the phone.My sister wasn't pleased taking the micky.
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>> we will probably never "retire".
I've been watching this thread with interest as it's evolved from personal liquidity to pensions, but I haven't had anything meaningful to contribute thus far. Ironically, it's my dad's birthday today - and it's the one when he's meant to retire. He's not, though - just cutting back by a day a week as he enjoys his work and is still fit and healthy.
Me, I've never been able to save for a pension, in much the same way as I've never had a hope of buying my own house. No point in worrying about it, that whole section of life is a closed door to me.
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It is not the end and be all owing your own house Dave.I was lucky regarding a pension BP payed for it.If your dad enjoys his work keep it going .My grandfather was still piloting ships into ports in his seventies he enjoyed the work.
Make the best of eveyday and live your own live not by others is my motto.
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There is real poverty - and I don't mean in the sense of the definition thought up by some well off fat academic - There is a perfect storm now of jobs going, benefits being slashed and household debt, compounded by increasing fuel costs and food costs - if you don't believe me volunteer for a job with your local CAB.
These payday loans are criminal and should be banned.
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....as I commented today, lots of people are one meal away from hunger and starvation.
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>> ....as I commented today, lots of people are one meal away from hunger and starvation. >>
So what is their typical weekly income/benefits and expenditure per head? What is the "vital stuff of life" that is so essential that they spend all their income/benefits on before food?
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Rent, electricity, water rates, council tax and travel to work spring to mind.
Pat
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>> Rent, electricity, water rates, council tax and travel to work spring to mind.>>
You left out fags and booze, and maybe some weeds and all.
Rent, water, rates, and council tax are an avoidable cost in the UK if you are so poor that you don't know where your next meal is coming from.
Fuel for heating/cooking is included in your benefits.
Cost/distance of travel to work is a matter of personal choice - ask any Polish migrant who has decided to come to the farms of Lincolnshire to earn enough to avoid hunger and starvation. To know the meaning of hunger and starvation, you have to visit Africa or India.
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>>You left out fags and booze, and maybe some weeds and all.<<
In the world you clearly don't live in John H these are NOT possible for so many.
>>>Rent, water, rates, and council tax are an avoidable cost in the UK if you are so poor that you don't know where your next meal is coming from.
Fuel for heating/cooking is included in your benefits<<
Clearly you've never had the misfortune to try to survive on benefits.
>>Cost/distance of travel to work is a matter of personal choice - ask any Polish migrant who has decided to come to the farms of Lincolnshire to earn enough to avoid hunger and starvation.<<
The many Polish migrants who work for the firm I work for do so, to better their standard of living and not to avoid starvation.
What's more they would be offended to hear you say this.
Welcome to the real world John H, you are in denial.
Pat
Last edited by: pda on Tue 10 Jan 12 at 18:29
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>> Welcome to the real world John H, you are in denial. >>
Present your evidence. Real facts. Not anecdotes.
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Anecdotes are not what I get every week without fail referred to me by SSAFA on a lot of occasions.
They produce an income and expenditure sheet, something RP will be familiar with.
Help with rent and council tax may be 100% in some circumstances, but not always if you have a 3 bed house and only need a one bed house.
The remaining sum, which is alway less than £100, has to pay all the utility bills, TV licence and food. Not to mention contents insurance and any other life insurance the person may have. Telephone expenses ( which are essential for finding work and travel expenses to interviews whatever the mode of transport.
Now for example my gas and electricity is £126 per month and my water rates are £36 per month, TV licence around £12.......I live in a 3 bed house but only need one bedroom so my rent would come up £84 short per month.
Doesn't leave a lot for food, does it?
Booze, fags and whacky baccy are out of the window.
Now look at this another way, it's quite possible this person has just had a heart attack and has no prospects of returning to work in the near future but needs regular hospital appointments in another town, with the cost of parking etc.......
Do you really need all that worry at a time like that?
Stop lumping all benefit claimants as time wasters, some of them are and are work shy.
Most are not, just genuine people, who would give anything to go and do an honest weeks work to pay their bills.
Pat
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Nor me - I work for a nationally respected organisation which has ample hard evidence if you were bothered to do some research. As for Poles escaping starvation/hunger in their native country.....you've clearly not been there recently. They are the original "uppies" - upwardly mobile in a way their opposite numbers in the UK could only dream of.
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referred to me by SSAFA on a lot of occasions.
Is that the charity you work with pda?
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No it isn't, sooty.
It's a small charity for vocational licence holders but SSAFA don't give financial help. Their role is to find help for people so when they get a claim from someone with a history of lorry driving they always refer it to us.
In some ways it's good but in others, we tend to feel their funds are far greater than ours!
If it's a big item like a stair lift though, it means it can be funded by a number of charities instead of just one.
Pat
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>> No it isn't, sooty.
>> Pat
Right thanks, I didn't know they don't give financial help that's surprising to know. I didn't know they moved people on towards you, as like you say they have pretty big funds. I bet it's quite a high number as well. Do the SSAFA 'social' workers still stay in touch with the person after you start helping them with money? Sorry if I'm being nosey it's just me and a few others have had dealings with them.
Last edited by: VxFan on Wed 11 Jan 12 at 09:30
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Almost 75% of referrals come from them.
If you look very closely at their website it does state that they don't give financial help, but will search for other sources.
I don't know if they follow them up or not but we had a feeling they didn't, so we had to have a re-think on how we dealt with the referrals some time ago.
We felt that donations we made were not made clear to the recipient who they were from (rightly or wrongly), so we now insist upon the claimant contacting us directly so that we can stay in touch and offer ongoing support and advice and in some cases, alternative re-training to get back into work and off benefits.
Pat
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Edit to add: We do feel peeved in some ways by SSAFA because none of us are paid a wage, none of us ever claim any expenses from our charity and we all do what we do around our full time jobs.
We enjoy doing it, but at times it does take up a lot of your life, but a thank you letter always makes that worthwhile.
Trying to choose my words carefully here!
Pat
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no problem pda. The case worker should stay in touch that's their job. Normally they are pretty good sounds like you might have a bit of a duff branch of ssafa.
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It's not a local branch, it is local to the claimant so we deal with a lot of them.
Pat
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Do you do any stuff with the CAB Pat ?
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No, not often, just once they have rang to see if we could help....we did:)
Pat
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If you are well incredibly organised self-disciplined and reasonably well educated you can indeed live on very low income. Your life won't be very exciting but you can survive.
Unfortunately very few of us are like that. The shear tedium and desire to be like others takes over. The temptation to buy a new coat instead of going to the charity shop, Some steak instead of mince, a packet of cigarettes or a night out for once with your mates, a new bike for your kids for their birthday and before you know it your in debt. Not much at first but you are in debt. You borrow some money, well everyone does don't they? The gas bill comes in and its more than you thought. You borrow some more. Before long you owe more in interest each week than you receive as income. You are in a sort of living hell.
Very difficult to escape
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>>Unfortunately very few of us are like that.<<
Unfortunate indeed.
>>The shear tedium and desire to be like others takes over.<<
And there's the problem illustrated - the very notion that tedium can only be relieved by some sort of spending. Watching that C4 prog Living with the Amish was certainly a lesson in consumerism for me, I felt quite guilty about turning a light on - im not about to buy a horse and buggy but when one considers what you actually need in material terms to be happy, actually we have convinced ourselves we need far more bits of tinsel than is actually the case - and we pay the price.
>>You borrow some money, well everyone does don't they?<<
You can borrow in a measured, careful way with repayments you can not just afford but easily afford. When we bought my wifes car, our budget for the finance was £200 a month - we eventually went for the option which cost us £134 pcm because even though we could afford the higher amount, its just plain common sense to assume your eyes are bigger than your financial stomach and so aim lower than you instincts tell you, then you have a buffer.
>>You are in a sort of living hell. <<
Of your own making.
My generation, maybe that a bit older too, have been told relentlessly to spend spend spend and never think of tomorrow. Now its coming to bite us on the backside and so few people seem to either value prudence or saving for the future. Im glad that I feel less and less inclined to give in to the spending desire.
Last edited by: FoR on Tue 10 Jan 12 at 18:56
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I'm sure what to say is true FoR. Unfortunately it doesn't correspond with human nature.
You can live cheaply, you can reject material goods like the Amish, you can if you understand finance use credit wisely. Unfortunately if you are poorly educated and trying to
make ends meet and living in a society where material wealth is all you are unlikely to do any of these things.
George Orwell wrote in the 'Road to Wigan Pier' talking of the poor
"The basis of their diet is white bread and margarine, corned beef, sugared tea, and potatoes—an appalling diet. Would it not be better if they spent more money on wholesome things like oranges and wholemeal bread, or if they … ate their carrots raw? Yes it would, but the point is, no ordinary human being is ever going to do such a thing…"
Last edited by: CGNorwich on Tue 10 Jan 12 at 19:49
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>>Unfortunately it doesn't correspond with human nature.Unfortunately if you are poorly educated and trying to make ends meet and living in a society where material wealth is all you are unlikely to do any of these things.<<
Im not sure its human nature to feel yourself in poverty if you dont have a iphone, although to hear some people you might think it was.
I think society as a whole, the collective attitude, is where the problem lays, consumerism is an animal which must be fed. I was never educated about money except from my father and grandfather, both of whom were prodigious savers throughout their lives, so maybe its an inherited idea.
I dont think material wealth itself hurts, but its how you manage that wealth which not only includes adding to it by work, but by preserving a portion of it for future needs by way of prudence.
Im not sure how you could educate an entire nation about being careful with money without making them so poor they had no choice - my nan and grandfather's first house had no electric or running water and with my grandfather only doing farm work, they had very little spare money with which to feed themselves so they grew their own veg and only ate meat on weekends. So for me hearing that, I feel intensely privileged to live in such a bountiful age, the lesson isnt lost on me.
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I think the argument goes that if you ban payday loans, which are regulated, the desperate will turn to unlicenced money lenders who are infinitely worse.
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You have a point there which I didn't consider. Real people are in funding gaps. I'd give real examples if I could..
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I couldn't agree more RP.
The cases that come to us (as a charity) for help break your heart sometimes.
One of our rules are that we cannot help anyone financially who has fallen on hard times through any fault of their own, as well.
Pat
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>> These payday loans are criminal and should be banned.
No. If you're so poor you need to borrow, you can't afford to borrow. But while I agree that payday loans are bad for people on the whole, at least they are regulated. If they were banned, then it would simply play in to the hands of illegal loan sharks.
The interest rates, whilst they are horrendous, are unfortunately the rates for the job. I can remember when Shopacheck's minimum loan was £20, and they would call at your door weekly for 29 weeks to collect a pound back. The APR if you work it out is 295% - but would you do it for less?
It's an absolute tragedy that so many people don't save, almost regardless of how poor they are. It's expensive to live from hand to mouth, it just makes the poor poorer, and getting in front is both economic sense and brings peace of mind.
When I was a child, our family of five lived on one weekly wage which my father supplemented by 'scotching' at weekends and waitering in the local pub. There's no doubt we were poor, certainly by today's standards, and with no more income than the neighbours, but Dad always had money in hand, while they were always skint. Money was budgeted, and went from his wage packets into a tin box with compartments for different expenses (later it was just saved and written in a book). When the coalman came, or the gas bill, the money was already there, as it also was for two weeks holiday at Morecambe or Scarborough.
Explaining how to manage money then is one thing I really thank my father for. When I got married, everything in the house except the cooker and the sitting room carpet (the floor was concrete) was second hand, but from that day on we have never had less than three months pay in the bank - the point being that we could have spent it on new furniture and a TV, but we didn't - the TV came four years later.
Sadly the majority just doesn't 'get' money and managing it. I went to work for a bank, in a branch, in 1973. I have never got over my surprise at the number of people who needed an overdraft to pay an "unexpected" gas or electricity bill.
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No chance of getting 'on the council' then Dave?
Both my and 'the wife's' parents were council tenants, FiL still puffing the weed at 87 and has had double glazing and central heating installed by them in his 2 bed ground floor flat with garden in Brentwood,
He's got the council decorators in this week as well!
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>> No chance of getting 'on the council' then Dave?
I already am. I was lucky enough to be assigned a Housing Assoc house five years ago suitable for a couple plus children. It's only me and one child here now, although my other two nippers come to stay regularly so we're not under-occupying.
I earn enough income to cover our outgoings, but not much else.
Last edited by: Dave_TDCi on Tue 10 Jan 12 at 17:38
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>>I earn enough income to cover our outgoings, but not much else<<
So you wouldn't be able to buy the house then - that's how we started back in 87, we had a council flat at Bankside next to The Tate Mod. in London, bought it for about £56k and sold it after just 6 months for about £96k - best thing we ever did really, a lot of people said we were mad selling so soon as we had to pay part of the discount back being we didn't stay there for 3 years, but shortly after we bought n' sold, the market crashed, and anyway - we just wanted to get out of the smoke so we bought a 3 bed detached house in St Leonards on Sea which was like a mansion (to us) coming from a 1 bedroom flat in sowf lunden (Thanks Maggie!)
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>> I earn enough income to cover our outgoings, but not much else.
>>
I'm the same.
I use Microsoft Money almost on a daily basis, to check whether my wages will stretch to the next payday.
50% of my wage goes on rent.
I tried to get social housing and couldn't - I had to put a roof over my 2 teenage daughters and myself - the girls were homeless. So I ended up in private rent (which the landlord lets me have at under market price, as he knows my daughters and the circumstances that got us where we are..
I have made as many savings as is humanly possible, I do not drink, smoke, or take drugs.
The only 'fun' I have, is the internet, and my motorcycle.
The motorcycle, I got cheap from a friend, I insure it TPF&T. and 90% of its use is getting to and from work.
I don't have a car ( I did have one, which was given to me FREE! by another friend, that went last year -head gasket failure no funds to repair ) so the bike is my only transport.
The bus service starts after I need to be at work.
We shop at Asda, and mostly buy own brand stuff.
Benefits? Don't make me laugh - they stopped the second the girls left school!
Loans? I did take out a Provident loan - I had to to pay some bills - that will be paid up this April.... I'm hoping I dont have to take out another one, but if the cash flow goes bad, then I will have to.
When that's paid up, I'm hoping to put the equivalent of the payments up into a saving account, but more than likely inflation will prevent that from happening.
One of the girls has moved out, but I couldn't get a smaller place around here, for less than I'm paying for rent now... plus I haven't got a deposit!
Catch 22 there......
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>> died within 6 months of each other in their late 60s and the balance of the pension fund went back into Standard Life's coffers. >>
conversely, many people lived and are living beyond original estimates on life expectancy, and are a drain on the pension funds. Annuities are based on the assumptions of average life expectancy and therefore some will lose and some will gain; but because people are living way beyond estimates made just 10 years ago, pension funds are on a loser.
(of course you have to make different choices based on life expectancy if you live in Glasgow rather than Kensington
www.bbc.co.uk/news/business-15372869
With Glasgow men now living to 71.6 years and women to 78 years, men lagged their more fortunate counterparts in Kensington and Chelsea by 13.5 years and women by 11.8 years. )
>> Pension Fund fraud >>
Only one I know of was Robert Maxwell looting the Mirror Group. can you name any others?
>> And thats before I go onto mortgage endowments.. >>
The assumptions were given in the literature for the product, and no guarantees were given for the "with profits" except by the Equitable. The Equitable disaster was due to them thinking the future income of their funds was such that Equitable could guarantee future payments at a sustained high rate.
Last edited by: John H on Tue 10 Jan 12 at 18:33
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Also a lot of people have had a poor returns in the stock market in the last and turned to housing. One of the reasons why prices have short up in recent years.
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I am happy to report that I have an Equitable Life guaranteed pension!
When the time to collect arrived, they were desperate to get me to convert it to an ordinary annuity, but I politely declined - well, you would, wouldn't you?
It's not a lot, only about £750 per annum, but every quarter when it arrives, I feel smug at having beaten their system!
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I had a £11,000 with Equitable and bought an annuity which paid me about £100 a month; then there was trouble and Prudential took over the funds and I am now getting £45 a month which is not marvelous. However I am inlLine for sum unspecified compensation some time this year. Well done Roger BTW!
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>> I had a £11,000 with Equitable and bought an annuity which paid me about £100
>> a month; then there was trouble and Prudential took over the funds and I am
>> now getting £45 a month which is not marvelous. However I am inlLine for sum
>> unspecified compensation some time this year. Well done Roger BTW!
>>
Equitable promised Annuity rates of say 11-13% - i.e every £100K would give say a 65 yr old man £11,000-£13,000 / year. Rates fell and now £100K will give £6,000 / year.
When I started a PP in 1993 growth would produce £120K from £100K in 12 years IIRC.
The £100K went in but out came <£100K
Annuity rate fell from 9+% to 6+% so
£120K fund @ 9% = £10,800 / year became £90K @ 6% = £5,400 per year.
Therefore in 2006 the exorbitant insurance company charges, fall in fund values, fall in annuity rates costs me £5,400 / year from the THEORY in 1993 - good job I had other irons in other fires.
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Many in UK have little or no cash! - Manatee
