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Half Of Families Are Struggling To Pay Their Debts: Bank Of England Chief Warns Of New Surge In The Cost Of Living

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http://www.dailymail.co.uk/news/article-1328355/Bank-England-chief-Mervyn-King-warns-new-surge-cost-living.html

More than half of families are struggling to pay back their debts, research reveals today.

It follows a warning yesterday from the Bank of England that the cost of living is set to soar – tightening the financial squeeze on a nation already in the grip of a household debt crisis.

The Bank’s Governor, Mervyn King, blamed soaring commodity prices, rising power bills and the planned VAT hike to 20 per cent on New Year’s Day for his warning on future price rises.

But the Bank also disclosed that more than one in two people who have unsecured debts, such as credit cards or personal loans, are already struggling to cope.

The new figure of those feeling the pinch - 51 per cent - is the highest logged by the Bank since records began 15 years ago.

The warnings over the £1,455billion personal debt time-bomb came as the Bank warned inflation will rise and remain ‘elevated’ for longer than it predicted just three months ago.

In its quarterly health check on the economy, Mr King admitted inflationary pressures could ‘push up ­further’ as businesses pass on soaring import costs to consumers. Inflation is currently 3.1 per cent.

Another study - by life insurance firm Bright Grey - warned that millions of people are ‘living beyond their means’.

This is because they are addicted to a lifestyle they do not want to give up.

Coalition's cuts will avert double-dip threat, says King

The report said women typically spent nearly £600 more than their take-home pay each month. The figure for men was £138.

In recent weeks, there has been a blizzard of statistics suggesting food price inflation is running at its highest level for 15 months.

Clothes prices are also up – thanks to a spike in the cost of raw cotton.

Rising power bills and the VAT hike mean inflation will not fall back to its 2 per cent target until at least 2012, the Bank believes. This will heap more pressure on cash-strapped households as pay rises are likely to be far below inflation for many years.

On debt, the Bank’s authoritative Inflation Report said people are ‘more concerned’ about their borrowings, and are finding it difficult to keep up with the repayments.

A record proportion of those surveyed – 51 per cent – admitted their debts were ‘somewhat’ of a burden or a ‘heavy’ burden.

The crisis is being fuelled by a toxic combination of people losing their jobs or having their income slashed, and credit card firms hiking their interest rates.

On average, a typical adult contacting a debt charity has unsecured debts of £23,000, which is more than most workers earn in a year. This does not even include mortgages.

Earlier this month the Mail told of fears that the millions of so-called ‘zombie households’ were teetering on the brink of financial collapse because they have been relying on historically low interest rates to pay their mortgage and stay afloat. Today a leading debt charity also warns of a ‘new type of homelessness’ – clients forced to sleep on a friend’s or family member’s sofa because they cannot afford their mortgage or rent.

The Consumer Credit Counselling Service said it is the first time in its 20-year history that it has spotted this trend, and predicts numbers will keep on climbing.

Some have had their home repossessed and some are deciding to rent out their property because they cannot afford the loan. Others are renting, but cannot afford the payments any more.

Around three million people with a mortgage are ‘constantly struggling’ to find the money for their monthly payments, the housing charity Shelter said yesterday.

Experts have raised fears about the impact of interest rates going up from their historic low of 0.5 per cent, although some say this will not happen for ­several years.

Labour MP Tom Watson found that Chancellor George Osborne’s office contains an £80,000 etching by the cross-dressing artist Grayson Perry depicting a battle between tribes labelled ‘provincials’, ‘agnostics’ and ‘homosexuals’, while Tory Party chairman Baroness Warsi has a carpet worth more than £3,000 hanging on her wall.

Only five Cabinet ministers – including Foreign Secretary William Hague and Home Secretary Theresa May – had not changed any artwork.

Edited by Pauly_Boy

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Debt porn?

While i'm sure our personal debt situation is extremel;y dire, some of this is clearly exagerated or is using a measurement method that is giving a false impression

The report said women typically spent nearly £600 more than their take-home pay each month. The figure for men was £138.

Now come on

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The report said women typically spent nearly £600 more than their take-home pay each month. The figure for men was £138.

Shoes. Bound to be shoes.

:)

But seriously ... we need a whole raft of tv programs on the BBC about economising, cutting back and learning to do without.

I think you need a production company to be able to put ideas to the BBC though don't you?

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Shoes. Bound to be shoes.

:)

But seriously, it isn't true is it? Do you even know any women who regularly overspend £600 a month? (doesn't have to all be on shoes) The article claims that these women are typical

Big track -

I remember big track from the early eighties and thought i was hallucinating or having a personality collapse when i saw the same thing being sold in an electrical store recently

what a weird world

Edited by Stars

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Debt porn?

While i'm sure our personal debt situation is extremel;y dire, some of this is clearly exagerated or is using a measurement method that is giving a false impression

The report said women typically spent nearly £600 more than their take-home pay each month. The figure for men was £138.

Now come on

Insurers who can't do simple statistical calculations. Still, can't do any harm I suppose.

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Inflation is gradually reducing the buying power of the average person, with no comparable rise in wages for most people, also Governments are actively working to make the general standard of living lower with their Corporate buddies in order to "compete" with third world economies.

Of course they can't come out and say that, far better to just go the "naughty people you are living beyond your means" sackcloth and ashes route, guilt trips work, the various religions have been using them for thousands of years.

YOU ARE ALL MISERABLE SINNERS! (said in very best Ian Paisley voice) :lol:

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But seriously, it isn't true is it? Do you even know any women who regularly overspend £600 a month? (doesn't have to all be on shoes) The article claims that these women are typical

Big track -

I remember big track from the early eighties and thought i was hallucinating or having a personality collapse when i saw the same thing being sold in an electrical store recently

what a weird world

Na, but it's not 600 a month, it;s an average. All they have to do is buy a new car and that's two years of over spending covered!

Whats the cause of this massive gap though, are women more materialist, can you blame it on women earning less than men?

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Whats the cause of this massive gap though, are women more materialist, can you blame it on women earning less than men?

I don't know any men who would list shopping as a hobby ... oh actually one but he buys "antiques" on ebay and then sells them on ebay. He's awful at is. Bankrupt recently but didn't make him change a single habit.

Women shop for fun. For pleasure. For a hobby. Someone at my mum's work place organises trips to shopping centres all over the country. They get a coach and go off and shop. Not just at Christmas, all year round.

I dislike shopping apart from a mooch in the charity shops, jumble sales, carboots, pound shops. I like to get a bargain. I don't go into town very often - and I hate shopping for clothes. I don't do designer labels.

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Someone at my mum's work place organises trips to shopping centres all over the country. They get a coach and go off and shop.

Is that a joke? It's totally pathetic.

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Na, but it's not 600 a month, it;s an average.

So you reckon an average overspend of 600 a month?

But then, the statement:

women typically spent nearly £600 more than their take-home pay each month

would be a gross distortion

All they have to do is buy a new car and that's two years of over spending covered!

600 a month is 7200 a year (this is pure net overspend, so we can assume the actual debt is maybe in the region of 8000 at the end of the year)

At that rate, someone on typical wages is going to run out of borrowing room pretty quick, no matter what they spend it on. They couldn't remain 'typical' for much more than a couple of years

Whats the cause of this massive gap though, are women more materialist, can you blame it on women earning less than men?

The gap is odd and not explained by what i have said.

The cult of shopping as a hobby? maybe some women need to find other interests

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But seriously ... we need a whole raft of tv programs on the BBC about economising, cutting back and learning to do without.

I think you need a production company to be able to put ideas to the BBC though don't you?

Didn't Krusy Allslopp do something recently?

I'm sure you can approach the BBC, as long as you have something well thought-out.

Or take the idea to a production company.

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So you reckon an average overspend of 600 a month?

But then, the statement:

women typically spent nearly £600 more than their take-home pay each month

would be a gross distortion

Could be (partly) covered by benefits.

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Why people continue to get dragged down by unsecured debt is beyond me. Recently had the pleasure of helping an elderly relative straighten out his finances and it was wonderful when he had that epiphany moment where he realised he didn't have to stress about the credit card debts. We wrote the letters to each of his credit card companies together, sent back the budget forms they sent us and then managed to take his payments down from several hundred to £50 a month. He'll never pay it all back. His credit rating is destroyed. But he's much happier now.

Maybe, if people woke up to this on masse and instead of sending in loan and CC payments one month instead cancelled their direct debits and sent letters saying they wanted to negotiate it could do some significant damage to the banks - after all that is effectively all it took to throw a spanner in the works of the CDO/CMO/sub-prime carousel in the states. People stopping paying. Then again the thought of losing their debt-funded lottery winner lifestyle might be a bit too much.

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Don't they realise that all the shops are the same wherever you go?

I have tried politely pointing this out... but get nowhere with them. They like going on days out to shopping centres.

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Didn't Krusy Allslopp do something recently?

her homespun stuff - I suspect it doesn't save money at all but there you go.

I don't know why I haven't watched it though...

I'm putting my ideas down now! :)

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I don't know any men who would list shopping as a hobby ... oh actually one but he buys "antiques" on ebay and then sells them on ebay. He's awful at is. Bankrupt recently but didn't make him change a single habit.

Women shop for fun. For pleasure. For a hobby. Someone at my mum's work place organises trips to shopping centres all over the country. They get a coach and go off and shop. Not just at Christmas, all year round.

I dislike shopping apart from a mooch in the charity shops, jumble sales, carboots, pound shops. I like to get a bargain. I don't go into town very often - and I hate shopping for clothes. I don't do designer labels.

+1 I dislike shopping centers so much they make me feel very depressed, I am sure I am not the only one?

Some of the high street stores with their polyester and acrylic clothes on offer look as if they wouldn't last a 40 degree wash. I have found clothing of far better quality in a decent charity shop. ;)

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I have found clothing of far better quality in a decent charity shop. ;)

I have volunteered in a charity shop in the past.

When primark opened we noticed that primark clothes were appearing in donations and that some of them weren't worth hanging up because of the quality - not a huge number though! What we did find though is pricing them is almost impossible within our pricing guidelines as we would almost be selling them for as much as they were brand new.

A lot though also came in with labels still on - perhaps because no one wanted to queue at their returns desk to take back a £3 top or pair of trousers.

Good quality clothing in charity shops needs good quality clothing to be bought from main stream shops.

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Good quality clothing in charity shops needs good quality clothing to be bought from main stream shops.

...I suppose location yet again counts for a lot.

We have a shop near that people can sell their quality clothes, the store takes a percentage of the sale price, most of the clothes have only been worn once, wedding and evening type stuff, some of it looks like something you might wear on a cruise ship, designer wear...not my cup of tea but could save someone who was after that kind of thing a fortune and the chances of someone having the same outfit is slim...the prices are very reasonable. ;)

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...I suppose location yet again counts for a lot.

We have a shop near that people can sell their quality clothes, the store takes a percentage of the sale price,

Ooo

where's that?

Sounds like a great idea.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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