More increases in living costs to come yet..!!

iv-tecman · 28 Feb 2006 at 09:56

Don't know what to say about this really, but if the current trend to increase living costs like this continues then I'll soon be living in the red, despite being very frugal with my money.

http://news.bbc.co.uk/1/hi/business/4758032.stm

I try and save, only have the heating on when I need it, energy saving lights, turn off lights when not needed. I had to work a few hours extra this month to help pay for the winter gas bill, despite saving a few extra quid each month as I knew it would be high.

I gotta admit, even though I know fossil fuels are not endless, I'm now getting worried about how my mum is going to cope. She's already starting to live in colder conditions so she can eat. I'm now thinking about moving her into my home to try and make it more affordable.

I know this is a controversial statement, but why is this country getting so expensive, yet so horrid to live in? I'm slowly getting sick of the UK, and I used to be so proud of this country.

It's not just raising fuel prices; a lot of stuff is starting to bug me. But this latest news is no surprise I guess. But, ouch.!!

Sad news really, as I do try and save. But this is really going to hurt. Now, what leg can I sell, or perhaps I can give Power Gen an arm...

And I know there are reasons for this, but after hearing about some of the profits made, it does make you sick a little....

cleanbluesky · 28 Feb 2006 at 10:10

iv-tecman said:
I know this is a controversial statement, but why is this country getting so expensive, yet so horrid to live in? I'm slowly getting sick of the UK, and I used to be so proud of this country.

Tax culture and the idea that tax is being geared to be fairly manageable to the average person, yet there are meny people with individual circumstances who it may hit harder?

HEADRAT · 28 Feb 2006 at 10:13

Average Wage = £25,170 (many people can only dream of this salary)

Average House Price = £158,573

TAX = 40% (if you want enough money to buy the average house above)

VAT = 17.5% (so if you're earning enough to pay 40% TAX then that's 57.5% TAX before you start)

Interest Rates = We are told interest are low, well compared to Europe, Japan and the USA are interest rates are high.

This is just the tip of the iceberg, living in this country is very expensive IMHO.

HEADRAT

PsiFox · 28 Feb 2006 at 10:16

iirc Average house price has just topped the 200k

HEADRAT · 28 Feb 2006 at 10:18

PsiFox said:
iirc Average house price has just topped the 200k

http://www.forbes.com/markets/feeds/afx/2006/02/28/afx2557644.html

Not according to this report.

HEADRAT

iv-tecman · 28 Feb 2006 at 10:21

Well, I’m not going to profess to me knowing what the problem is, but there is something very wrong. I’m not advocating that EVERYONE has the right to afford a home, but just lately it appears no one can afford a first time home.

Owning a home is muted as a privilege and not a right. Heard this many times before, but even if you rent, with the increases in living costs, taxes etc, just how does anyone start to even save for a home.

I really do feel sorry for the less fortunate who are on much lower wages then me. I’ll speak with my mum tonight, and see if she wants to move into our house as I’m so concerned she is starting to skimp to try and save. I know she is already starting to struggle. She lives on her own, and I can’t bear to think she is starting to struggle paying for essentials.

Average house price in my area is now around 160K, the less desirable areas around 100k for a run down ex council shack, where if you leave your car outside, don’t expect to find it there the next morning…

I can’t afford either. Buying a house is the last thing on my mind, I’m more concerned about keeping us, and my mum warm and out of the red.

PsiFox · 28 Feb 2006 at 10:26

HEADRAT said:
http://www.forbes.com/markets/feeds/afx/2006/02/28/afx2557644.html

Not according to this report.

HEADRAT

but according to this

http://news.bbc.co.uk/1/hi/business/4724858.stm

tom_nieto · 28 Feb 2006 at 10:26

I've got to pay my house's gas bill today. Not too nice really, it was rather a lot. At least splitting it between 7 of us will ease the pain slightly.

afraser2k · 28 Feb 2006 at 10:30

iv-tecman said:
Well, I’m not going to profess to me knowing what the problem is, but there is something very wrong. I’m not advocating that EVERYONE has the right to afford a home, but just lately it appears no one can afford a first time home.

Everyone does have the right, as long as they can afford it.

The problem we're facing these days is that the UK has changed to having more people living alone rather than in the traditional family unit that governments like to believe in.

People don't want the government to build on "green-belt" land and they don't want to live in areas getting rebuilt unless they have luxury flats on offer, as it means sharing with "unsavoury" groups who are normally in cheaper housing.

Personally I think the current "crisis" is our own fault for being too snobbish.

Borris · 28 Feb 2006 at 10:39

HEADRAT said:
Average Wage = £25,170 (many people can only dream of this salary)

In fact, 50% can dream of this salary, the other 50% can achieve it. That's one of the great things about averages.

HEADRAT said:
Average House Price = £158,573

TAX = 40% (if you want enough money to buy the average house above)

Assuming you have no savings, and buying a 100% mortgage as a first time buyer.

HEADRAT said:
VAT = 17.5% (so if you're earning enough to pay 40% TAX then that's 57.5% TAX before you start)

Assuming you spend 100% of your disposable income on VATable items (ie. 17.5% on 60%), your effective rate would be 50.5% overall (not including NI etc.)

HEADRAT said:
Interest Rates = We are told interest are low, well compared to Europe, Japan and the USA are interest rates are high.

UK base rate = 4.5%
US base rate = 4.5%
EU base rate = 2.25%
Japan base rate = 0.1%

Whoever is doing the telling is lying to you.

HEADRAT said:
This is just the tip of the iceberg, living in this country is very expensive IMHO.

That's an extremely poorly researched iceberg you live on.

Why not have a look at other indicators - purchasing power parity, the big mac index, standard of living - there's plenty to go on.

HEADRAT · 28 Feb 2006 at 10:51

Well matey it was my post and all you've done is post "assuming", well yes they were my assumptions doesn't make it wrong though does it

Re: House Prices : Yes I was "assuming" a 100% mortgage as a first time buyer, so in this case my post is correct.

Re: Interest rates : US interest rates have historically been lower than ours in recent history, EU base rates are 2.25% and ours are 4.5%, our rates aren't exactly low then compared to Europe are they (so again my post is correct) !!

Re: VAT : Again yes I was "assuming", I must admit I didn't take NI into account as it was a quick post

(so yes I was 7% out, my bad)

Cheers

HEADRAT

kaiowas · 28 Feb 2006 at 11:03

Borris said:
In fact, 50% can dream of this salary, the other 50% can achieve it. That's one of the great things about averages.

Except it doesn't work like that.

if 75% of the people earned 15k and 25% earned 50k then only one in 4 people would earn above the £23,750 average.

Borris · 28 Feb 2006 at 11:06

My apologies, although I'm sure you can appreciate the confusion from arising from this sentence:

HEADRAT said:
We are told interest are low, well compared to Europe, Japan and the USA are interest rates are high

I couldn't make out whose rates you wre claiming were higher than others.

HEADRAT said:
historically been lower than ours in recent history

That's non-sequitur - surely you mean one or the other. For the benefit of other posters, the Fed has been raising the base rate by 25 basis points each month since October, whereas the BoE MPC has kep rates static since August (when the lowered them from 4.75%).

Insofar as monetary policy is concerned, I'm not sure that it has much relevance with regards the cost of living.

Any statistics need to be quoted in context, with any assumptions shown, otherwise they are liable to misinterpretation.

kaiowas said:
Except it doesn't work like that.

if 75% of the people earned 15k and 25% earned 50k then only one in 4 people would earn above the £23,750 average.

Depending, of course, on the methodology behind any average.

By and large, it would refer to an adjusted mean, where the top and bottom tails are ignored - either way, the distibution is skewed (massive high end wealth belonging to very few people) - and weighted according to density of earners - ie. far more relevance is given to the low end earners.

Rotty · 28 Feb 2006 at 11:13

kaiowas said:
Except it doesn't work like that.

if 75% of the people earned 15k and 25% earned 50k then only one in 4 people would earn above the £23,750 average.

correct , more will earn below the average than above because the scale is open ended at the top

Borris · 28 Feb 2006 at 11:15

Rotty said:
correct , more will earn below the average than above because the scale is open ended at the top

Which is why you would use a weighted average - it makes for a far more relevant number.

HEADRAT · 28 Feb 2006 at 11:15

Borris said:
Any statistics need to be quoted in context, with any assumptions shown, otherwise they are liable to misinterpretation.

Mate I'm posting to a group not writing an essay for Uni!

In terms of interest rates,

Europe = They are lower
Japan = They are lower

as for "non-sequitur", LOL very flash mate but see the below:-

http://www.hbosplc.com/media/pressreleases/articles/halifax/2006-02-04-00.asp

Over the past ten years the Bank of England's base rate has been on average 1.4 percentage points higher than the US Federal Funds rate. For this period the base rate has averaged a level of 5.3% against a US average of 3.8%.

I agree that rates are now in parity but historically ours have been high

I found your post both pendantic and pseudo intellectual.

Cheers

HEADRAT

kaiowas · 28 Feb 2006 at 11:17

Borris said:
Which is why you would use a weighted average - it makes for a far more relevant number.

Or you could just use a median instead of trying to fudge a mean.

iv-tecman · 28 Feb 2006 at 11:21

I merely posted this to point out that again, that living costs in the UK are increasing by large margins, and the topic has now started to talk about housing, BoE rates, VAT etc..

Which is good, as this is a debate. I think the point where we have made it worse for ourselves by being snobbish is valid in someway. I myself would rather rent in a “nice” area then buy in an area where I might get mugged or have my car stolen.

However, I can’t even afford this now. And with the increases in fuel charges, water charges, taxes etc it is now getting harder to save for your first home. I have done no studies into the affect of house prices v living costs to help sustain any argument by me, so I perhaps cannot make comments on this topic.

However, buying a home for me at the moment is something neither me nor my partner have any say in, as we simply know that with our combined earnings we stand little to no chance of buying. We have very little in savings, but renting has never bothered either of us, as we have a dry roof over our heads, and this is more important then being the “owner” or paying a mortgage on a property.

But I do feel this country is escalating out of control with living costs. A point that has already been made with some of your figures already quoted. And this bothers me, as I have chosen not to buy, as I know I can’t afford it, but I do need to keep warm, and I do all I can to save energy, and yet prices are increasing. I don’t know what else I can do to try and help the problem. They save try and save 20%, and I did this towards the end of last year where I calculated average usage from the previous year. And by me attempting to save, my units consumed has gone down, but bills are not decreasing.

Anyhow, I wasn’t looking to create arguments just feel there is a “little” greed by energy companies going on here.

Errol · 28 Feb 2006 at 11:25

Put simply, wages are not rising inline with the extraordinary increases in utility bills and other 'unavoidable' costs (like council tax - which has doubled in 10yrs).

As a result, people will have less disposable income and the highstreet will suffer. America is due a massive recession (akin to the 1930s depression) and when (not if) this hits our economy will be taken down with it.

Quickly.

Borris · 28 Feb 2006 at 11:26

HEADRAT said:
Mate I'm posting to a group not writing an essay for Uni!

In terms of interest rates,

Europe = They are lower
Japan = They are lower

as for "non-sequitur", LOL very flash mate but see the below:-

http://www.hbosplc.com/media/pressreleases/articles/halifax/2006-02-04-00.asp

I agree that rates are now in parity but historically ours have been high

I found you post pendantic and pseudo intellectual.

Cheers

HEADRAT

Nice to see the tendency towards passive agression is aloive and well.

Confusion still reigns supreme in your posts - you call me mate, then you insult me. What's it to be, sweetpea?

I'm trying to figure out why you are posting arguementatively when we are agreeing the same thing.

As to my erudition - are you upset that you had to look up non-sequitur in your ladybird dictionary?

For the record, if you want to make claims about anything, you should use references as close to the source as possible (ie. the Fed or MPC), not some press release from a high street bank.

I found your post brainless, childish, ill-concieved, poorly executed, and ultimately a waste of space.

Unfortunately, I also found it on my monitor.

Not any more.

kaiowas said:
Or you could just use a median instead of trying to fudge a mean.

Using a median would have made my post correct though - can't be having that.

Besides, when you use a fudged mean you can make stats do anything you want.