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Sharp Decline In Uk Household Finances

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the salient point here is the increase in middle class unsecured borrowing.clearly people borrowing to live in the face of price inflation.

Maybe they are borrowing because they expect an economic bounce meaning they'll be able to pay back what is being borrowed.

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Bit of a mystery how they incurred it in the first place though, except in the exceptional cases of a large rise in income.


In the old days, to feed my excessive lifestyle, I'd call Guernsey from time to time and say, 'Send me over half a million will you,' and they would. But I'd have to pay tax of about 25 per cent.

Years ago my tax lawyer said this was madness and made a fairly obvious suggestion.

'If you're earning, say, 5 per cent on your money in Guernsey, instead of bringing it in and paying all that tax, why not borrow against it?

'You'll only pay 1 per cent, or less, over Bank of England base rate for your loan, so you'll only be losing 1 per cent or less each year, instead of giving the Inland Revenue 25 per cent of what you bring in.'

I didn't like the idea. I've always hated borrowing. I pay my bills within a week, so even if I'm sometimes a considerable nuisance, suppliers love me because they get their cash so quickly.

I doubt it's all like this but possible tax avoidance? Which also suggests it could go horrible wrong.

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Increase in demand for unsecured debt - my guess this is a new wave, people who wouldn't previously have considered debt to maintain their lifestyles.

The first wave has passed through, leaving 500,000 debt management plans in England & Wales. A typical DMP covers, say, £20k of debt spread across 8 different creditors (CC & personal loan). Not unusual to see a six figure sum. In reality the loans will never be repaid, and their entries in DMPs are proxies for CCJs that the creditors don't want to place on the record.

The best way of figuring out how quickly the middle class is crumbling may be to keep track of the growth in DMPs. The 500,000 figure I cited above comes from a R4 program on debt collection a few months ago. Any suggestions?

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  • 285 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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