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Mr & Mrs Average In Ni

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[quote name='2buyornot2buy' timestamp='1361181064' post='909261817']
Quite right, my wages may have gone up 10% but if they haven’t matched inflation then I have less money for the mortgage payments and have to pay more for other things. Lack of wage inflation obviously drives down prices.
[/quote]
Very true. But if the Average house price in 2007 was £200k or something north of it, and today the average house is £95k your 10% increased income should go alot further.

If the houses have fallen 5% then the mortgages are 50% lower too.

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[quote name='2buyornot2buy' timestamp='1361181339' post='909261825']
But But But.. Inflation errodes my massive mortgage debt.... :o
[/quote]

Only inflation in house prices will do that, in my opinion.

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[quote name='BelfastVI' timestamp='1361182631' post='909261845']
Very true. But if the Average house price in 2007 was £200k or something north of it, and today the average house is £95k your 10% increased income should go alot further.

If the houses have fallen 5% then the mortgages are 50% lower too.
[/quote]

But all the other things I spend money on have gone up 25%.I have less money. Edited by 2buyornot2buy

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Should have read the article :unsure:

[quote]What's more, wages haven't kept pace, climbing only 10% since the peak of the housing market bubble in August 2007 compared to 18.8% for the UK consumer price index.

[size="3"][b]In effect that means most people have taken a pay cut of 8.8%.[/b][/size]
[/quote]

Still, my guess was not far out B) Edited by Belfast Boy

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[quote name='Belfast Boy' timestamp='1361186598' post='909261906']
Should have read the article :unsure:


So wages have fallen 9% in real terms since the peak in 2007.

Still, my guess was not far out B)
[/quote]

Lots more if you use RPI

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[quote name='2buyornot2buy' timestamp='1361186894' post='909261913']
Lots more if you use RPI
[/quote]
RPI is generally higher. However, there was a massive dip in RPI in 2009. The only figures I can find suggest that RPI for the same period was around 20%.

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[quote name='Belfast Boy' timestamp='1361187189' post='909261918']
RPI is generally higher. However, there was a massive dip in RPI in 2009. The only figures I can find suggest that RPI for the same period was around 20%.
[/quote]

Ah yes of course. It dropped in 2009 as it reflected all those people on 0.18% + base rate trackers mortgage payments.

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[quote name='2buyornot2buy' timestamp='1361191275' post='909261976']
Or they have gotten 25% smaller. Yes
[/quote]
I make it to be an increase in CPI from 2007 to 2011 of 14%

2007 104.7
2008 108.5
2009 110.8
2010 114.5
2011 119.6


source http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/september-2011/new-component.html

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[quote name='BelfastVI' timestamp='1361192668' post='909261995']
I make it to be an increase in CPI from 2007 to 2011 of 14%

2007 104.7
2008 108.5
2009 110.8
2010 114.5
2011 119.6


source http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/september-2011/new-component.html
[/quote]

Grand but we were talking about RPI

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[quote name='BelfastVI' timestamp='1361192668' post='909261995']
I make it to be an increase in CPI from 2007 to 2011 of 14%

2007 104.7
2008 108.5
2009 110.8
2010 114.5
2011 119.6


source http://www.ons.gov.uk/ons/rel/cpi/consumer-price-indices/september-2011/new-component.html
[/quote]

Have you taken all of 2007 or since peak August 2007?

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[quote name='2buyornot2buy' timestamp='1361193060' post='909262002']
Have you taken all of 2007 or since peak August 2007?
[/quote]
OH, my mistake.

When you said '[i]But all the [u]other [/u]things I spend money on have gone up 25%[/i].' When we were talking about housing I assumed you were talking about the CPI which [u]excludes [/u]housing costs.

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[quote name='BelfastVI' timestamp='1361193671' post='909262017']
OH, my mistake.

When you said '[i]But all the [u]other [/u]things I spend money on have gone up 25%[/i].' When we were talking about housing I assumed you were talking about the CPI which [u]excludes [/u]housing costs.
[/quote]

I was actually talking about the essential that I actually buy going up 25%, you know like food and fuel as opposed to 52 inch LCDs T.V. and postage stamps.

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[quote name='2buyornot2buy' timestamp='1361194543' post='909262035']
I was actually talking about the essential that I actually buy going up 25%, you know like food and fuel as opposed to 52 inch LCDs T.V. and postage stamps.
[/quote]
I understood the main difference between RPI and CPI was housing costs. But perhaps, and judging from your reply I am incorrect.

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[b]Incomes squeeze dashes optimism
[/b]
Households suffered another income squeeze in February as living costs rose at the sharpest pace since September 2011, causing hopes for the year ahead to darken.

http://www.telegraph.co.uk/finance/economics/9876275/Incomes-squeeze-dashes-optimism.html

The change in mood, after fresh optimism in January, will come as a disappointment to economists, following recent signs of rising confidence. A separate survey showing that footfall on the high street fell by 3.3pc in the worst January performance for three years will have underscored concerns.

According to Markit’s household finance index, 41pc of the survey’s 1,500 respondents expected their finances to worsen over the year ahead, compared with only 23pc predicting improvement.

Lower income earners were particularly hard hit in February, with those on incomes of £15,000-£23,000 experiencing the tightest financial squeeze in the survey’s four-year history.

Rising rents, food costs and energy bills have piled pressure on families, while average wages have risen at just 1.4pc – below the pace of inflation.

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[b]Households at the lower end of income scale suffering disproportionately from the financial squeeze[/b]

http://www.dailymail.co.uk/money/news/article-2280437/Households-lower-end-income-scale-suffering-disproportionately-financial-squeeze.html

British households at the lower end of the income scale are suffering disproportionately from the financial squeeze, a report showed today.

Those with incomes of £15,000-£23,000 are feeling in worse financial straits than they have at any time in the last four years, Markit's household finance index for February found.

Meanwhile, those earning below £15,000 recorded the sharpest deterioration in their budgets for 14 months.

The overall financial situation facing UK households deteriorated once again in the fourth quarter, according to a second study.

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[b]Eight million Britons have no savings, study reveals[/b] UK

Another 15 million 'making no effort' to save for the future according to research which also shows a rise in parental loans

http://www.guardian.co.uk/money/2013/feb/25/millions-britons-without-future-savings

The report's authors said families were increasingly "shouldering the burden". In this year's survey, 40% of those quizzed said they had given or loaned family members "substantial amounts of money" - up from 30% last year.

Children were the main recipients of this cash - a quarter of respondents said they had gifted or loaned a sizeable sum to their offspring. The average amount given to children has risen to £14,865, compared to £13,300 last year, and the top reason for the loans was to help meet essential costs, closely followed by helping with a deposit on a house and paying off debts. Edited by Shotoflight

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[b]Almost two out of three people rely on credit card debt to buy essentials like food or fuel [/b]

http://www.mirror.co.uk/news/uk-news/payday-loans-two-out-three-1740582

PAYDAY lenders should be forced to put health warnings on their loans to protect cash-strapped borrowers, say consumer watchdogs.

The call comes after a survey revealed that nearly two out of three people rely on credit card debt to buy essentials like food or fuel.

Consumer champion Which? commissioned the poll, which found that one in four people need payday loans to repay other kinds of credit.


[b]
Which? calls for crackdown on irresponsible lending[/b]

http://www.which.co.uk/news/2013/03/which-calls-for-crackdown-on-irresponsible-lending-312354/

Consumers are over-reliant on using credit to pay for essentials like food and rent, and are being exploited by irresponsible lenders, new research from Which? has revealed.

The new research paints a worrying picture of desperate and vulnerable consumers, caught in a debt trap as the long financial squeeze takes its toll in the UK.

It found that many consumers feel forced to use high-cost credit to pay for other debts. These people are, in turn, at risk from irresponsible lenders exploiting the situation.

Which? executive director, Richard Lloyd, said: ‘For an increasing number of people, using expensive credit to pay for essentials has become the norm. 'This has led to people being forced into a vicious cycle, taking out further, expensive credit to pay off existing debts.’

Over a quarter of credit users say they don’t like debt but see it as a necessary part of their lives, while more than half of people with credit card debt used their cards to pay for rent, bills, or essentials like food.

While credit is useful and necessary for a healthy economy, many households are becoming increasingly reliant on loans just to get by.

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[b]It's getting worse: Brits near the bottom of living standards table[/b]

http://www.mirror.co.uk/news/uk-news/britain-near-bottom-eu-living-1740475

Skint Brits have suffered one of Europe’s worst drops in living standards.

The value of UK wages has plunged by 3 per cent since Chancellor George Osborne embarked on huge spending cuts in 2010.

The drop is revealed in new research, which puts Britain in 24th place out of all 27 EU nations in a study of rising and falling pay packets. The figures, which take into account inflation, show we are the fourth hardest-hit nation in Europe. Only Greece, Cyprus and the Netherlands have had bigger drops in pay.

Food prices in the UK soared by 5 per cent in the past year while millions of workers endure a pay freeze. Meat is likely to get even more expensive as the industry cleans up after the horse-meat scandal. The price of petrol has soared and heating bills have also rocketed.

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[b]British workers' real wages fall by 4.5pc[/b]

Workers in the UK have seen the biggest fall in real wages than anywhere in the world's top 10 developed economies, according to a new study.

http://www.telegraph.co.uk/finance/jobs/9915434/British-workers-real-wages-fall-by-4.5pc.html

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[b]Britons expect falling living standards[/b]

The British public is braced for another year of declining living standards as inflation outstrips pay rises once again.

http://www.telegraph.co.uk/finance/economics/9917301/Britons-expect-falling-living-standards.html

Inflation expectations for the year ahead hit 3.6pc in February, the highest level since last May, according to a quarterly survey from the Bank of England. Expectations for five years ahead were also 3.6pc, the highest since GfK NOP began compiling the data for the Bank in 2009.

“Separate surveys and ONS data show that the elevated level of inflation expectations is not translating into higher wage gains. Rather, consumers expect their living standards to fall,” Michael Saunders, Citi’s UK economist, said.

Inflation held steady for a fourth month running in January at 2.7pc, but is expected to rise above 3pc shortly as university tuition fees, higher energy bills, and the effect of the weak pound drive up prices.

Creeping inflation fears came as weak construction figures for January resurrected the threat of a triple dip recession. The construction sector suffered a 6.3pc plunge in activity during January, according to the Office for National Statistics. Output was down 7.9pc in January against a year earlier.

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[b]
'Mummy Tax': Benefit Changes Criticised[/b]

http://news.sky.com/story/1062582/mummy-tax-benefit-changes-criticised

David Cameron will have a Mother's Day card delivered to his door by campaigners for new mums whose benefits are about to be capped.

Labour has accused the Government of imposing a "mummy tax" and said the welfare reforms are part of a series of austerity measures which unfairly target mothers.

Shadow minister for women Yvette Cooper MP told Sky News: "It's like David Cameron and George Osborne have a blindspot about women because they're paying three times more than men in tax and benefit and pay and pension changes.

"That is so unfair when women earn less and own less than men.

"It shows that the Prime Minister and the Chancellor just don't get it and it's outrageous that new mums are hurt hardest."

The criticism came as the Archbishop of Canterbury was among 43 bishops who have written an open letter condemning the Government's plans to change the benefits system, saying it will have a "deeply disproportionate" effect on children.

The Most Rev Justin Welby has warned that "children and families will pay the price" if plans to change the system go ahead in their current form.

Around 340,000 women claim either statutory maternity pay or maternity allowance every year.

Until now their benefits have gone up in line with inflation, which currently stands at 2.7%, according to the Consumer Price Index.

But from next month new mothers' benefits will go up by just 1% every year as part of a three-year cap on welfare increases.

So by 2015 critics have calculated the benefits will be effectively cut by £180 because they will not increase by as much as the cost of living will.

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UK - things are tight on an average £37k
[b]
Dropping shopping[/b]

Britain’s squeezed households largely explain the country’s flatlining economy

http://www.economist.com/news/britain/21573132-britains-squeezed-households-largely-explain-countrys-flatlining-economy-dropping-shopping?fsrc=scn/tw/te/pe/droppingshopping

During the boom years income and outgoings moved in ways that made household finances glow. Average weekly earnings grew at 4% a year between 2001 and 2007, while prices went up by just 2% a year. Workers’ buying power increased steadily and strong private consumption underpinned rising GDP. But in 2008 the numbers flipped. Since then pay increases have been 2% a year, price increases above 3%. Workers’ cash buys less and less.

A glance at Britain’s strong employment figures might suggest that wages should recover some of their old vigour soon: surely firms hiring more must pay more? But strong jobs numbers do not always translate into better pay. Over the long run wages tend to move in line with productivity. In Britain, growth in output per worker is low relative to other countries and to other recessions. Whereas the productivity slump is puzzling, the puny wage increases are not.

That makes the prospect of rising prices all the more painful.

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