"Most only have £500 of savings ",says Lloyds boss ,really ?

[fez]

Good to see some gaslighting is alive and well in here.

The cost of living crisis is not the fault of the low paid. Some in here seem to think it's acceptable for people to exist rather than live - work your 40 hours a week, come home to your beans on toast and stare at 4 walls the rest of the time and, if the person doesn't like it, then it's their own fault.

They have to use Elec/gas, they have to use fuel to get to work, they have to eat food to live.

For clarity - I am referring to the people who have cut back as much as possible.

Please stop using gaslighting for anything you don't agree with. Thats not what gaslighting is.

And I don't think anyone is suggesting that people who have cut back as much as they can shouldn't get all the help they need. The issue is the people who shouldn't need help but will. Come Jan/Feb I think people will be shocked at the level of government intervention required to prop up far too many people that are not in the category above.

My issue is that when you are having to prop up people you shouldn't, you can't help those that do deserve the help as much as you should.

 

[robj20]

Good to see some gaslighting is alive and well in here.

The cost of living crisis is not the fault of the low paid. Some in here seem to think it's acceptable for people to exist rather than live - work your 40 hours a week, come home to your beans on toast and stare at 4 walls the rest of the time and, if the person doesn't like it, then it's their own fault.

They have to use Elec/gas, they have to use fuel to get to work, they have to eat food to live.

For clarity - I am referring to the people who have cut back as much as possible.

Surely they should have worked harder on school, to then get a better paying job.
So yes they're own fault. I don't earn silly money and I was pretty terrible in school but I worked hard to get a reasonable job that meant I want at the bottom of the pay ladder. You have no one but yourself to blame if you're on minimum wage.

 

[Freakbro]

Surely they should have worked harder on school, to then get a better paying job.
So yes they're own fault. I don't earn silly money and I was pretty terrible in school but I worked hard to get a reasonable job that meant I want at the bottom of the pay ladder. You have no one but yourself to blame if you're on minimum wage.

So everyone does well at school and gets that better paying job...

Who is going to do the minimum wage job that still needs doing?

 

[Devilman]

Surely they should have worked harder on school, to then get a better paying job.
So yes they're own fault. I don't earn silly money and I was pretty terrible in school but I worked hard to get a reasonable job that meant I want at the bottom of the pay ladder. You have no one but yourself to blame if you're on minimum wage.

This is what you call survivor bias. YOU made it, so you assume everyone else should / does / can.

The world does not work that way. There are countless people out there who are truly skilled, gifted even, within a given field and they NEVER get discovered because they DIDN'T happen to be fortunate enough to go through the same life experiences, opportunities and chances that you did.

Also as nicely pointed out by @Freakbro ...

So everyone does well at school and gets that better paying job...

Who is going to do the minimum wage job that still needs doing?

This is the reality people like BOJO didn't want to face with his nonsense "lets make the UK a high-skill, high-wage country". It's nothing but a stupid soundbite... The simple fact is there are literally hundreds of different job types that do not require high skill, but still require BEING DONE regardless. So surely we should at least be decent enough to not treat those who are in low-skill, minimum wage jobs like slaves with no chance to scratch together enough money to buy themselves a new toy?

 

[dlockers]

So older minimum wage workers are the true altruists? Like the angle. Keep going chaps.

 

[Building Candy]

I know people that, if they have some money left at the end of the month, they will literally look for something to buy for that price.

Your either a spender or a saver.

 

[fez]

"In theory" is a nice idea, but reality is often much different... In this greed driven capitalistic world, the prices are highly unlikely to drop much at all. As has been witnessed time and time again, for most people who are on minimum wage / stuck in the rent trap (or both) any "spare cash" they may gain from an increase to the NMW gets immediately "eaten up" by an increase in rent, an increase in fuel costs, an increase in food costs, absurd increases in electricity costs.

They will because as we are seeing, there is a large swath of the world that simply can't afford elevated prices for plenty of goods. The issue is supply and demand at the moment, largely driven by Russia being a bunch of *****. Once that is sorted out things should be more manageable. We should be looking at the cost of housing as a priority however. Allowing a small subset of society to profit from the misery of others who are forced to rent from them and pay off their debt is awful.

The flip-side of this argument is again the deliberate manipulation of the "free market" to limit housing stock to keep driving prices higher and higher, forcing people to "mortgage themselves up to their eyeballs" just to have any chance to step on the property ladder. Just imagine if the social housing stock that was sold-off under Thatcher's "Right-To-Buy" scheme had actually been replaced? The government(s) (Both Tory and Labour) are seeming unwilling to actually regulate the housing / rental market, but they're sure willing to manipulate it.

A lot of people have chosen to go for houses that are at the very edge of their means though. Whenever we have gone to the bank for a mortgage they have offered us an amount that would strain our finances if interest rates changed much or our circumstances changed for the worse. We didn't ever borrow the max because it was dangerous. Plenty just want to know "how much can I borrow" and will always max it out. Is that the fault of the bank or the fault of the individual? Bit of both probably.

The issue fundamentally is just how large the section of society has become who are struggling.. Food banks at an all time high etc.. For many people they will always strive to have what they don't have, it's human nature. While I agree there are some people out there that are terrible with finances regardless, but they are a small minority. For most the desire for a new car or a new phone (or dare I say it... a house they can own :O ) is a perfectly normal, natural and understandable one and to be entirely expected.

Thats maybe where we differ. I don't think that lusting after the latest phone or a new car is an acceptable reason not to have savings in case of things like the cost of living increasing. I also don't think its a small minority that are bad with money. I think that a lot of people have just been living close to the edge for years because there has been no danger. Interest rates have been historically low and debt has been cheap.

What is not acceptable however, is for people to have the vast majority of their monthly income eaten up by price hikes, suffer exploitative rental practices and borderline illegal price-fixing of the housing market while companies are continually making billions in profit every year.
The solution to this is not to point your finger and blame those who have a new Iphone (probably on a 2 year contract overall so what's that. £10 a month?) but to start to raise serious questions as to why such a large percentage of the wage of those least-well off is allowed to be "consumed" in this manner by greedy landlords and businesses.

I agree that there are larger evils at work in society that are stripping money from pretty much every level of society to funnel it to the top but that doesn't excuse people from poor financial planning completely.

p.s. You might want to look at how much a new iPhone costs on a monthly contract because it ain't £10 . Its about £42/month without any sort of actual contract. Most people with a new iPhone will be paying £60+ per month on a 24 month contract.

 

[dlockers]

I know people that, if they have some money left at the end of the month, they will literally look for something to buy for that price.

Your either a spender or a saver.

My savings strategy is like this - and it works really well for me. If my savings ever get "low" I just have a skint month and bank the money. I hate the periodic/recurring payments strategy as you feel poor 24x7 rather than extremely poor for 3 or 4 months of the year

 

[danlightbulb]

A lot of people have chosen to go for houses that are at the very edge of their means though. Whenever we have gone to the bank for a mortgage they have offered us an amount that would strain our finances if interest rates changed much or our circumstances changed for the worse. We didn't ever borrow the max because it was dangerous. Plenty just want to know "how much can I borrow" and will always max it out. Is that the fault of the bank or the fault of the individual? Bit of both probably.

Its the fault of what properties are available. When I was looking for a house in the last 3 months, my max was what I HAD TO PAY to get something because there was hardly anything cheaper that was any good.

 

[Devilman]

They will because as we are seeing, there is a large swath of the world that simply can't afford elevated prices for plenty of goods. The issue is supply and demand at the moment, largely driven by Russia being a bunch of *****. Once that is sorted out things should be more manageable. We should be looking at the cost of housing as a priority however. Allowing a small subset of society to profit from the misery of others who are forced to rent from them and pay off their debt is awful.

Perhaps I am just more cynical but I have my doubts that the prices will return to anything remotely like pre-Ukraine Invasion, It's the nature of the the beast, just look at the fuel prices and the 5p off... it was gone in seconds as the forecourts all hiked their prices to chow down on that extra profit. I 100% agree with what you're saying about housing though

A lot of people have chosen to go for houses that are at the very edge of their means though. Whenever we have gone to the bank for a mortgage they have offered us an amount that would strain our finances if interest rates changed much or our circumstances changed for the worse. We didn't ever borrow the max because it was dangerous. Plenty just want to know "how much can I borrow" and will always max it out. Is that the fault of the bank or the fault of the individual? Bit of both probably.

That is true and to some extent I think that cheap credit and easy to access lines of credit, combined with a fairly "stable" level of low interest rates for long time has led people to not correctly assess the risks should something change (like a sudden inflation spike). However there is also that "aspirational" aspect to things... I think it's fair to say that in the west, since the end of WW2, things have for the most part gotten more prosperous and seems as a consequence parents have for the last couple of generations been telling their kids constantly "you can do anything / you can have anything" and if you blow enough smoke up someone's butt, they're gonna keep setting their sights higher and higher - And that is no bad thing in my opinion. People should strive for better. I don't really see why in this day and age people who are on low-income jobs should have to be forced to "slum it" (cheap phones, banger cars, stuck in rental housing) because their finances are so pinched by the essentials they have nothing left for themselves.

Thats maybe where we differ. I don't think that lusting after the latest phone or a new car is an acceptable reason not to have savings in case of things like the cost of living increasing. I also don't think its a small minority that are bad with money. I think that a lot of people have just been living close to the edge for years because there has been no danger. Interest rates have been historically low and debt has been cheap.

I certainly agree that I think a lot of people have been living "at the edge" for quite a while now due to easy access to finance, some reasonable stability in the economy (since 2008 and pre-brexit at least) and hence a lack of a sense of "risk". I'm not so sure that a large portion of society are bad with money, perhaps more that up until now and due to the previously mentioned points, they simply underestimated or doubted the risks, quite possibly because they had never experienced them themselves previously.

I agree that there are larger evils at work in society that are stripping money from pretty much every level of society to funnel it to the top but that doesn't excuse people from poor financial planning completely.

p.s. You might want to look at how much a new iPhone costs on a monthly contract because it ain't £10 . Its about £42/month without any sort of actual contract. Most people with a new iPhone will be paying £60+ per month on a 24 month contract.

Please excuse the early morning typo, It seems my brain and my fingers do not wish to co-operate . I meant to say £10 a week (I was just ballparking the price of a grand over 104weeks), true of course that a full contract would indeed cost more, but I see that as irrelevant since they would be paying the contract regardless of whether they had a Nokia brick from 2000 or the latest Iphone tbh.

 

[Andrew Moore]

I see a lot of value in this thread but can’t help think that we have two wage ranges here, the lowest to low incomes and then a bunch of upper mid incomes and higher so views are very one sided depending on which side of that fence you are on with those in the middle not posting because they’re comfortable enough to not bother.

I have peed money away like it’s gone out of fashion for a good decade+ of my working life. I then got divorced which was a real bummer too, does that count too?

I see a lot of people saying that people with pcps and living pay to pay are a problem in various forms and will be stuffed come a day when a job falls through and they have nothing.

I am currently one of those, on paper at least. Do I see it as a problem? Not at all.

I’ve got a mortgage, bills to pay and less than a months wage in the bank however there’s a reason for this.

1, Why have money sat in a bank doing nothing but devalue when I have a mortgage and a car on loan (not a pcp as it’s a loan to own) that I can and do chip away at in addition to the standard? Result - 30yr mortgage (after starting again from divorce a couple of years ago) is now down to 21yr3m. It’ll be gone in 10 years assuming the world doesn’t explode before then.

2, Who in their right mind doesn’t have income insurance, health insurance, life insurance etc when they have dependants and a mortgage to cover? You get knocked flat out financially, you have a constant stream of money for X months that should cover you enough to keep you going until you can get back on your feet.

If you don’t have the above and you are still splashing the credit and getting in to debt then you need a rethink and a reality check.

I feel that legislation or something need be in place that ensures that you have such means before you are allowed a mortgage in the first place. Once covered, you may or may not have the spare cash then to get a new car but you and your family are covered without the need to rely on the government to bail you out assuming you qualify for what ever is it to get that help.

I don’t think the problem is savings, savings these days in the traditional format are a waste of time. It’s only an issue for the bank as the money isn’t there for them to use in investments. Savings instead should be tied to something useful such as gold (old school) or traditional investments or perhaps overpayment to pension schemes and I can see a lot of people do just that.

Although everything points towards no one having money in the banks and millions sat a pay slip away from disaster, I think the biggest issue here is that the banks don’t have your money so cannot invest and the bank system as a result is the system truly at risk.

I’d far rather my house was half the price it was when buying it but my monthly payments were the same or even a little higher due to a massively higher interest rate than a low rate and a higher value house. Why? If I put a £10k lump sum on to a house that’s £400k I pay off 2.5% but it’s it’s £200k I pay off 5%. Ultimately I own it quicker but the bank earns the same if not more assuming the term doesn’t get changed.

As the banks earn more from you, they’re happier, you are happier because you can pay a home off quicker, everyone is happier to keep their money in the bank because alongside interest being higher on the mortgage, your savings account has a meaningful return too.

The banks should have stepped in and cranked up interest rates a long while back. We wouldn’t have the inflation we have now and we wouldn’t have all the fresh out of school living with mum and dad simpletons driving around in brand new cars that they can’t afford either.

If interest rates were more meaningful I feel people would be more inclined to think before spending but society has gotten so used to it now that I can’t see anything changing unless the worst that could happen does indeed happen.

 

[Bear]

A lot of people have chosen to go for houses that are at the very edge of their means though. Whenever we have gone to the bank for a mortgage they have offered us an amount that would strain our finances if interest rates changed much or our circumstances changed for the worse. We didn't ever borrow the max because it was dangerous. Plenty just want to know "how much can I borrow" and will always max it out. Is that the fault of the bank or the fault of the individual? Bit of both probably.

Thats where we took a different route. The wife and I earn a very good wage between us, yet we live in an old mid terrace 2 up 2 down which we have paid for and have no debt between us. We decided early on to own a relatively modest home but have a very good standard of living, instead of stretching ourselves to own a more expensive home, and not have the money to do the things we would want to or buy anything we want within reason.

 

[Uther]

Thats where we took a different route. The wife and I earn a very good wage between us, yet we live in an old mid terrace 2 up 2 down which we have paid for and have no debt between us. We decided early on to own a relatively modest home but have a very good standard of living, instead of stretching ourselves to own a more expensive home, and not have the money to do the things we would want to or buy anything we want within reason.

Good plan. We've lived in the same 2 up 2 down end terrace since 1999.

 

[danlightbulb]

Thats where we took a different route. The wife and I earn a very good wage between us, yet we live in an old mid terrace 2 up 2 down which we have paid for and have no debt between us. We decided early on to own a relatively modest home but have a very good standard of living, instead of stretching ourselves to own a more expensive home, and not have the money to do the things we would want to or buy anything we want within reason.

And as I keep saying - even a old mid terrace 2 up 2 down is still 4x - 5x a good wage these days. What are people supposed to do then?

 

[Bear]

And as I keep saying - even a old mid terrace 2 up 2 down is still 4x - 5x a good wage these days. What are people supposed to do then?

No idea, I was only replying to Fez that we took a different route in not stretching ourselves with a large mortgage. I wasnt saying anything about houses being affordable or not because Im well aware that they arent for a large amount of people

 

[danlightbulb]

No idea, I was only replying to Fez that we took a different route in not stretching ourselves with a large mortgage. I wasnt saying anything about houses being affordable or not because Im well aware that they arent for a large amount of people

Right, and its great for you.

But there is always this undertone here that people are stretching themselves too much by buying extravagant houses instead of getting something cheaper, and that people could help themselves out by settling for less. That's complete rubbish though. Even basic houses now, that were built for slum working areas in the early 1900's, are stupid money.

Fez said that people "have chosen to go for houses that are at the very edge of their means" which is not true for most people, they simply did not have a choice in the matter.

 

[Deleted member 77746]

people could help themselves out by settling for less.

You know fine well it's human nature to want more, bigger, better, smarter things in life. This won't happen unless people are forced to.

I'm very happy to have less. It's less pressure to do well.

 

[Bear]

Right, and its great for you.

But there is always this undertone here that people are stretching themselves too much by buying extravagant houses instead of getting something cheaper, and that people could help themselves out by settling for less. That's complete rubbish though. Even basic houses now, that were built for slum working areas in the early 1900's, are stupid money.

Fez said that people "have chosen to go for houses that are at the very edge of their means" which is not true for most people, they simply did not have a choice in the matter.

Dont know why you are getting wound up and I think it says more about you than anything else. Im perfectly aware about the affordability of houses these days and I made no value judgement about other peoples choices or lack of, on the choice of homes they choose to buy. No undertone about peoples spending by me, thats on you.

 

[danlightbulb]

Dont know why you are getting wound up and I think it says more about you than anything else. Im perfectly aware about the affordability of houses these days and I made no value judgement about other peoples choices or lack of, on the choice of homes they choose to buy. No undertone about peoples spending by me, thats on you.

You certainly did continue the undertone by responding to Fez's assertion in the way that you did.

You know fine well it's human nature to want more, bigger, better, smarter things in life. This won't happen unless people are forced to.

I'm very happy to have less. It's less pressure to do well.

Not sure if you have misquoted me as you've only taken a snippet of my post?

Im also very happy to have less, but having less should cost less too i.e it should mean someone is less stretched. What I am saying quite clearly is that having less still stretches people at the moment.

 

[Deleted member 77746]

Not sure if you have misquoted me as you've only taken a snippet of my post?

No I only wanted to reply to that snippit.

What I am saying quite clearly is that having less still stretches people at the moment.

That depends on what people are buying and spending their money on. It also depends on if they are trying to save or still spending on things that isn't needed. I am aware bills have gone up. Maybe the gov need to re-think minimum wage and living wage again. If the bills are not going to go down anytime soon then wages need to increase.