Gamston Posted December 22, 2015 Share Posted December 22, 2015 Hardly surprising when there is no incentive to save and credit is the cheapest it's ever been. The base rate should have gone back up long ago IMO. And what do you think is going to happen when the base rate goes up for those already struggling to get and pay for mortgages ? Link to comment Share on other sites More sharing options...
Mister M Posted December 22, 2015 Author Share Posted December 22, 2015 And what do you think is going to happen when the base rate goes up for those already struggling to get and pay for mortgages ? Interest rates have been incredibly low for years now, they can't be kept low indefinitely. Especially as the BofE governor did say that once unemployment fell below 7%, which I think they already have done. I don't doubt it will be a struggle for many people with high mortgage payments though....Times like this I'm glad I'm renting. Link to comment Share on other sites More sharing options...
pacifica Posted December 22, 2015 Share Posted December 22, 2015 British households were £70bn in the black five years ago. Now five years later, British families are £40bn in the red. Vince Cable said: "...growth being sustained by personal borrowing. Much of it is against an inflating housing stock. Taken together with other indicators like the very weak external deficit position, it suggests we’re getting back to the old and unhappily discredited forms of economic growth". http://www.independent.co.uk/news/uk/home-news/fears-of-new-economic-crash-as-british-families-run-40bn-deficit-a6782221.html Are we right to be concerned? What do they mean by debt? I don't see what they call debt as being debt. It is just the figure between earnings and spending. That isn't debt. I could spend £100K more than I earned next week and I wouldn't be in debt. That's because previously I've earned more than I've spent. It just looks like a meanigless load of mumbo jumbo to me. As folks have pointed out, interest rates don't make savings worthwhile. So it doesn't mean taking £80K out the bank to buy a '63 E Type has put someone in debt. It just means their priorities have changed somewhat. Link to comment Share on other sites More sharing options...
tzijlstra Posted December 22, 2015 Share Posted December 22, 2015 Without doubt. Credit is still incredibly cheap due to interest being so ridiculously low, add to that the increased role of the exploitative payday credit companies and you have a pretty volatile cocktail. Link to comment Share on other sites More sharing options...
Gamston Posted December 22, 2015 Share Posted December 22, 2015 Interest rates have been incredibly low for years now, they can't be kept low indefinitely. Especially as the BofE governor did say that once unemployment fell below 7%, which I think they already have done. I don't doubt it will be a struggle for many people with high mortgage payments though....Times like this I'm glad I'm renting. The America rate has just increased slightly, but their property prices for the average person are lower than the UK . I don't think the UK base rate will rise soon because the Bank of England governor knows it will be Armageddon for many struggling mortgage payers . Link to comment Share on other sites More sharing options...
Vague_Boy Posted December 23, 2015 Share Posted December 23, 2015 That figure is frequently bandied about, but is just meaningless scaremongering: it includes all future budgetary obligations and commitments that do not yet require budgeting for. No, the £1.56 trillion figure quoted is the official national debt figure [LINK]. The figures you refer to regarding unfunded obligations are much, much larger. Government urged to reveal 'true' national debt of £4.8 trillion The Institute of Economic Affairs (IEA) has calculated that the national debt is £4.8 trillion once state and public sector pension liabilities are included, or £78,000 for every person in the UK. LINK Note that that was written in 2010. So what is an unfunded liability. Put simply, it's something that the government is going to have to pay for but for which there is f*** all money in the kitty. The results showed the extraordinary sums that Britain has committed to pay its future retirees. In total, the UK is committed to paying £7.1 trillion in pensions to people who are currently either already retired or still in the workforce. This is equivalent to nearly five times the UK’s total economic output. LINK Put bluntly, the figures don't add up. Pensions worked when people died a few years after retirement. Quite a few didn't live that long. Now that they're living 25 or 30 years beyond that, the amount those of us in work contribute doesn't even begin to cover it. Try going up to someone who's about to retire and tell them that they don't exist, they're just a product of "meaningless scaremongering". Those people are out there. They're going to retire and they're not going to exist for 30 years on fresh air. They expect a pension. Link to comment Share on other sites More sharing options...
Dr Afzal Posted December 23, 2015 Share Posted December 23, 2015 16 or 18, of course. You don't seriously think the retirement age will still be 65, in 65 years' time, do you? It` not 65 now for me and I`ve less less than 20 years to go. 18 plus 65 will make the poor man/woman about 83 when they retire. My bones creak now Link to comment Share on other sites More sharing options...
I1L2T3 Posted December 23, 2015 Share Posted December 23, 2015 That figure is frequently bandied about, but is just meaningless scaremongering: it includes all future budgetary obligations and commitments that do not yet require budgeting for. E.g. state pension of all active workers, whether a day into their first job (and 65-odd years away from drawing it) or 20 years into their career(s) (and 45-odd years away from drawing it), etc. Seconded. Might be happening here soon though, now that the Fed has finally raised the US one. Popcorn is at the ready for when that happens You are wrong. £1.56tn is the debt now. It does not include future unfunded liabilities. Totally wrong on this one mate. Link to comment Share on other sites More sharing options...
L00b Posted December 23, 2015 Share Posted December 23, 2015 No, the £1.56 trillion figure quoted is the official national debt figureSo it is, my bad. You are wrong. £1.56tn is the debt now. It does not include future unfunded liabilities.So I am and it does not. Very obviously a good job that I don't plan on retiring in the UK, nor exist on a UK state pension: the UK is doomed. Good luck chaps, it'll have been fun while it lasted Link to comment Share on other sites More sharing options...
sgtkate Posted December 23, 2015 Share Posted December 23, 2015 So it is, my bad. So I am and it does not. Very obviously a good job that I don't plan on retiring in the UK, nor exist on a UK state pension: the UK is doomed. Good luck chaps, it'll have been fun while it lasted Merry Christmas to you too L00b! I would be interested to see the figures without standard mortgages included, buy to lets probably should be although thinking about it, I'm not sure why now! Many peoples mortgages are lower than equivalent rent so whilst it is 'debt' it's not really avoidable as you'd always need to pay to live somewhere and if you are going to include mortgages then you almost need to add lifetime rent to the pot as well. But as a standard measure to allow us to compare with similar countries. Link to comment Share on other sites More sharing options...
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