"Most only have £500 of savings ",says Lloyds boss ,really ?
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For myself I think what is going to help me out most is not over extending on a house.
I would like one more house but do not want to extend the mortgage. But luckily I don't want a massive house. A 4 bed (1 more bed) in the country would be ideal. But I will not grow my mortgage. If I can't make up the difference in cash I won't move.
My mortgage is 800ppm and seeing interest rates go up and actually working out what it means for ppm payments it is shocking.
It makes me feel affordability checks aren't good enough.
Lloyd's would have leant us 310k.
I was shocked. I would not want to be leant that.
Really I think what TSB leant us for our first house was too much. On those salaries it really hits home now how vulnerable we would have been to this inflation scenario.
I had 1k cash in 2020 after buying house, it wasn't a nice feeling. I've built up to 15k now with some losses on stocks but just about overall gain. And same on crypto. But recently all. Loss. Taken a hit with remortgage fees and holiday. I feel very unsettled with no savings.
I would like one more house but do not want to extend the mortgage. But luckily I don't want a massive house. A 4 bed (1 more bed) in the country would be ideal. But I will not grow my mortgage. If I can't make up the difference in cash I won't move.
My mortgage is 800ppm and seeing interest rates go up and actually working out what it means for ppm payments it is shocking.
It makes me feel affordability checks aren't good enough.
Lloyd's would have leant us 310k.
I was shocked. I would not want to be leant that.
Really I think what TSB leant us for our first house was too much. On those salaries it really hits home now how vulnerable we would have been to this inflation scenario.
I had 1k cash in 2020 after buying house, it wasn't a nice feeling. I've built up to 15k now with some losses on stocks but just about overall gain. And same on crypto. But recently all. Loss. Taken a hit with remortgage fees and holiday. I feel very unsettled with no savings.
My theory is that people are now too removed from the last recession, had 10 years of a bull market and constant bombardment of easily available jobs etc.
Once that evaporates and if interest rates start killing of zombie companies then it might change.
Personally I'm quite frugal (OK relatively!), and the job I have (in the same vein of recognising the above) is certainly one that I don't take for granted and has given me enormous freedom in my life. Living normally would allow me to retire now. I sold a house recently but held off investing which I'm rather glad I did. Some good value out there in the market but not sure we have seen the bottom yet...
Once that evaporates and if interest rates start killing of zombie companies then it might change.
Personally I'm quite frugal (OK relatively!), and the job I have (in the same vein of recognising the above) is certainly one that I don't take for granted and has given me enormous freedom in my life. Living normally would allow me to retire now. I sold a house recently but held off investing which I'm rather glad I did. Some good value out there in the market but not sure we have seen the bottom yet...
The circumstances of the last recession were totally different though. How is now similar?
If you're thinking long term you're probably better putting as much as you can in stocks and shares.
The lower they go the more you should put in.
Soldato
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It is rather interesting in that we've devalued considerably without mentioning it, and we've borrowed to the hilt to fund covid, a vast amount of which was no doubt wasted, and we've absolutely no method of doing anything to get out of this recession. One we're not even admitting exists due to hyperinflation.
They claim wages are leaping massively, but I see little sign of this, as public sector has barely changed a jot, and minimum wage jobs haven't altered greatly either, business have borrowed to the hilt, yet house prices appear to continue to rocket.
Some parts simply don't add up, and I ponder if a further 'banking crisis' will land in the middle of the coming quake.
I'd hate to be planning to cash in a pension at the moment. Shares have been utterly shafted.
The whole thing is a house of cards, just waiting to fall. I recently took early 'retirement' but am living off savings and trying not to touch my pension. Hopefully I can leave that where it is to recover for the next ten years...
For people with debt and no savings the next few years are going to be very painful.
Soldato
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Aye longer you can leave that, the better. I know my FA had previously spoken of mitigation of such events by converting the shares to cash over a 5 or 10 year period prior to expected retirement.
The usual safe haven is bonds but even they've been hammered this time
Thing is, the government will always step in to prop people up when it gets bad enough. If enough people are struggling they will do what they have done over the past few years and bring the debt onto the public debt and push the responsibility onto the people who can still pay.
I genuinely fear for the future as things get more expensive and we desperately cling onto an unsustainable lifestyle that people have become accustomed to based on cheap debt and low cost of living. When you consider what even the poorer members of society can afford its amazing vs when I was a child. We weren't poor poor but we almost never bought new clothes, never had takeaway, went on cheap holidays once a year and had a single car. If you suggested that even the poorest of society shouldn't buy new clothes, eat takeaway or generally spend money on luxuries you would be accused of being a classist ****.
This winter is going to be carnage.
Good idea. Stop buying stocks whilst the prices are going down. Maybe start up buying again once the market recovers.
Soldato
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I'm struck by this too. We were pretty poor but had good quality of life - no smoking, no drinking, no name brand clothes or shoes, but plenty of fresh food and a decent present for Christmas. Mum always found a way to get what we needed even if it was old and second hand e.g. games consoles for me etc.
What surprises me is every single person down to about 10 years old has a smartphone. I know there are cheap options but generally, even people on very low incomes seem to have a flash iPhone or similar. Just wasn't a thing when I was a kid, there were always a few kids with none of the popular gadgets. I do appreciate it's an important life device now but still.
That whole dynamic has changed - for instance there are people who have flash cars on finance but struggle to afford anything more than a mid-terrace house and forgoing the flash car doesn't significantly change what they can afford house wise, while there are people whose income gets them into a nice house but doesn't leave much over for the car :s it can be a very weird situation and especially those who did alright for themselves in the 80s and 90s and got into a good position on the housing ladder then can't seem to understand it.
Agree, having recently retired I have no mortgage but coudnt afford a premium car. Its been a long time since I would have been able to afford my house.
Mind you I have a lot of savings. I don't think I'll spend it and inflation and inheritance tax will do for it.
Most people also struggle to get a deposit for a house and most people don’t own property. But you’d think with all the conspicuous wealth people display that we are surrounded by millionaires.
I can understand the savings point, no benefit to saving when you accrue no interest. (Yeah there is the possibility of investing but we are talking savings in the bank)
I can understand the savings point, no benefit to saving when you accrue no interest. (Yeah there is the possibility of investing but we are talking savings in the bank)
A third or houses are owned outright (no mortgage), a third are mortgaged and a third are in the rental sector (rough figures).
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