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30% Of Uk Households Completely Broke

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One in three UK households couldn't last a WEEK if they suddenly lost their income

12 Nov 2013 17:32

Research from HSBC reveals that 8.8million households have less than £250 in savings set aside as a financial safety net

A third of people, some 8.8 million households, would not be able to last a week if they suddenly lost their income.

The number of households with £250 or less set aside as a financial safety net has shot up by 800,000 since last October when it was eight million, according to research from HSBC.

Based on average monthly outgoings of £1,500 they would only last five days before running out of funds but, for a quarter of people, it would be almost immediate as they have no savings at all to fall back on.

It is difficult to find any spare cash to save in the current climate when incomes are dropping and bills keep rising but it is important to try and build up a fund as a financial cushion.

The general rule is to have a minimum of three months’ salary to see you through any unexpected financial glitches in life.

Getting into the habit of putting even small amounts into a regular saver account makes good financial sense and will mean you gradually build up a safety net – and don’t risk having to resort to building up debt.

What's £250 going to pay for? £40 on Sky, £40 on mobile phone, £50/wk groceries... feck all. Even more feck all if you smoke and drink regularly.

Once you've pawned the silver, kids guitar, golf clubs, etc...

Yet we're recovering?

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What's £250 going to pay for? £40 on Sky, £40 on mobile phone, £50/wk groceries... feck all. Even more feck all if you smoke and drink regularly.

Once you've pawned the silver, kids guitar, golf clubs, etc...

Yet we're recovering?

Most of their houses will be worth at least 250k, what`s the problem?

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Yet we're recovering?

What does it mean when one of the stronger banks starts highlighting that a significant number of households are broke?

Edited by ChairmanOfTheBored

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http://www.bloomberg...t-since-63.html

'The share of Japanese households with no financial assets rose to a record as falling incomes forced people to dig into their savings, highlighting the potential for widening disparities under Abenomics. The proportion reached 31 percent, according to a Bank of Japan survey released in Tokyo yesterday, up from 26 percent a year earlier and the highest since the poll began in 1963.'

Edited by Sancho Panza

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What does it mean when one of the stronger banks starts highlighting that a significant number of households are broke?

Some of the UK is recovering some isn't.

The bottom end is more screwed than last year (and the year before that)

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Surprise, surprise.

Organised crime business HSBC want people to deposit their savings with them, while they, other banks and the BoE move to be able to use saver's funds to bail-in banks that get into difficulty again.

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Dangerous things averages...

The HSBC stats give an interesting take on the distribution.

+10% increase YoY not far from trouble is quite a large increase.

HSBC numbers are usually very good.

But how do they know? People may well have a little bit of cash in accounts other than HSBC, or stashed at home in a teapot for that matter.

At best this must surely be an educated guess.

At any rate, I do wonder whether things have ever been much different. I would think that many people have always lived on the financial edge.

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It's a bank - for sure you can believe everything they say.

:rolleyes:

and you can always rely on newspapers like the Mirror to sift out the truth - paragons :lol:

Edited by billybong

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What does it mean when one of the stronger banks starts highlighting that a significant number of households are broke?

Means they have f*cked off all their good customers and they've gone elsewhere.

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Nah, just efficient households applying JIT.

And the black market must be 3, 4, 5 times the official estimates.

IMO if you're never going to earn a substantial wedge then it makes sense to have no (or off balance sheet....) savings, live for today, spend your money enjoy your holidays. If you lose your job then there's no problem with receiving means-tested benefits, when you retire you get a pension and later on all of your care home fees are paid.

Not for everybody but it's a perfectly rational strategy.

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Means they have f*cked off all their good customers and they've gone elsewhere.

Not sure on that. I think they're a bank that likes to lend big to 'good risks', high multiple, low LTV. Anecdotally of course.

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IMO if you're never going to earn a substantial wedge then it makes sense to have no (or off balance sheet....) savings, live for today, spend your money enjoy your holidays. If you lose your job then there's no problem with receiving means-tested benefits, when you retire you get a pension and later on all of your care home fees are paid.

Not for everybody but it's a perfectly rational strategy.

Yes. I would imagine most people would just shrug and say 'well the guvvament's gotta help me, innit.' The days of self-reliance and thrift are long gone. Nobody worries about poverty anymore - why should they? The only people who worry about money are the precarious, Daily Mail reading 'middle class' (who are really just the old fashioned upper working class) who have to keep up appearances.

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Yes. I would imagine most people would just shrug and say 'well the guvvament's gotta help me, innit.' The days of self-reliance and thrift are long gone. Nobody worries about poverty anymore - why should they? The only people who worry about money are the precarious, Daily Mail reading 'middle class' (who are really just the old fashioned upper working class) who have to keep up appearances.

+1.

Nothing lasts forever though,

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What's £250 going to pay for? £40 on Sky, £40 on mobile phone, £50/wk groceries... feck all. Even more feck all if you smoke and drink regularly.

Once you've pawned the silver, kids guitar, golf clubs, etc...

Yet we're recovering?

I wouldnt be surprised if this was a bit of a red herring and this lack of savings could be attributed to them depositing/investing elsewhere without HSBC's knowledge. While I believe there possibly would be this many families in such dire straits at present you have to consider that HSBC offer such p*ss poor saving products to plebs that there is no incentive to leave any more money than necessary in their grubby mits. I certainly dont!

I say 'plebs' because as a customer of HSBC since the days of Midland bank it has become obvious that they have moved very far away from their high street banking roots and are now only offering inflation beating IR's and other preferential services to high worth individuals, if you havent got 100k to deposit with them they turn their nose up at you.

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I wouldnt be surprised if this was a bit of a red herring and this lack of savings could be attributed to them depositing/investing elsewhere without HSBC's knowledge. While I believe there possibly would be this many families in such dire straits at present you have to consider that HSBC offer such p*ss poor saving products to plebs that there is no incentive to leave any more money than necessary in their grubby mits. I certainly dont!

I say 'plebs' because as a customer of HSBC since the days of Midland bank it has become obvious that they have moved very far away from their high street banking roots and are now only offering inflation beating IR's and other preferential services to high worth individuals, if you havent got 100k to deposit with them they turn their nose up at you.

True! :D

I actively make a point of not leaving cash in my bank accounts because when I used to keep a substantial sum in there they tried to sell me savings products every time I used the counter service and would regularly phone me at home.

My bank did actually have some decent fixed interest bonds about five years ago so I took those out but that's the only time I've done any investing through them since a couple of share transactions in the early 90s before I had a trading account.

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But how do they know? People may well have a little bit of cash in accounts other than HSBC, or stashed at home in a teapot for that matter.

At best this must surely be an educated guess.

At any rate, I do wonder whether things have ever been much different. I would think that many people have always lived on the financial edge.

Yep, me for one. Until recently never had much more than about £100 in 'savings' so am quite used to budgeting, robbing Peter to pay Paul, making do and mending things.

More by choice really as I preferred to be a part time freelance worker/part time stay at home mum, having said that my son was chronically ill with asthma when growing up so it would have been difficult to hold down a full time job as he was often hospitalised. I really appreciate the fact that it was a time when one person could afford a mortage, I had a fairly small one so was able to support us ok.

These days, with housing costs being so high, I would expect I'd have had to claim disability benefits for him as I certainly couldn't do it now. Never crossed my mind in those days that he was disabled through it but looking back and comparing things with today I think he would have been classed as such.

Also and probably more importantly I did have quite a few options open to me so the situation never felt hopeless.

It's one bit of advice worth noting. Always have options, otherwise you can get boxed in and that can seriously affect your sanity.

Anyway things much easier now and savings are in the £1000's and growing, house paid for, so although it was tough and stressful at times, we survived.

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What's £250 going to pay for? £40 on Sky, £40 on mobile phone, £50/wk groceries... feck all. Even more feck all if you smoke and drink regularly.

Once you've pawned the silver, kids guitar, golf clubs, etc...

Yet we're recovering?

From being 24 to 25 I did a year on the dole at a rate of under £250/month, hb paid the rent and there was no council tax to pay, so about £500 or so a month if you include them.

In that time I bough a cheap silver chain, a ukelele and a driver. Somehow managed to smoke and drink too. No Sky or expensive phone though. And I don't think £50/month on groceries let alone £50/week.

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I wouldnt be surprised if this was a bit of a red herring and this lack of savings could be attributed to them depositing/investing elsewhere without HSBC's knowledge. While I believe there possibly would be this many families in such dire straits at present you have to consider that HSBC offer such p*ss poor saving products to plebs that there is no incentive to leave any more money than necessary in their grubby mits. I certainly dont!

I say 'plebs' because as a customer of HSBC since the days of Midland bank it has become obvious that they have moved very far away from their high street banking roots and are now only offering inflation beating IR's and other preferential services to high worth individuals, if you havent got 100k to deposit with them they turn their nose up at you.

+1 (I have a business account with them opened a few years back when they plastered the papers with their FREE INTERNET BUSINESS BANKING spiel. Of course, they're now doing away with it and charging me for the privilege of banking with them. Bar stewards.).

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Yep, me for one. Until recently never had much more than about £100 in 'savings' so am quite used to budgeting, robbing Peter to pay Paul, making do and mending things.

More by choice really as I preferred to be a part time freelance worker/part time stay at home mum, having said that my son was chronically ill with asthma when growing up so it would have been difficult to hold down a full time job as he was often hospitalised. I really appreciate the fact that it was a time when one person could afford a mortage, I had a fairly small one so was able to support us ok.

These days, with housing costs being so high, I would expect I'd have had to claim disability benefits for him as I certainly couldn't do it now. Never crossed my mind in those days that he was disabled through it but looking back and comparing things with today I think he would have been classed as such.

Also and probably more importantly I did have quite a few options open to me so the situation never felt hopeless.

It's one bit of advice worth noting. Always have options, otherwise you can get boxed in and that can seriously affect your sanity.

Anyway things much easier now and savings are in the £1000's and growing, house paid for, so although it was tough and stressful at times, we survived.

Amen to that. Too many people are happy to splurge all they have and more to get on the ladder, putting themselves on a knife edge regarding redundancy/rate rises/arrival of children/unexpected factors like health scares etc.

Having the cash cushion, or the flexibility to move somewhere cheaper/better at short notice, is a sorely underrated advantage.

Buffett's grandfather's letter to Buffet's parents:

http://www.lettersofnote.com/2011/10/everyone-should-have-reserve.html

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From being 24 to 25 I did a year on the dole at a rate of under £250/month, hb paid the rent and there was no council tax to pay, so about £500 or so a month if you include them.

In that time I bough a cheap silver chain, a ukelele and a driver. Somehow managed to smoke and drink too. No Sky or expensive phone though. And I don't think £50/month on groceries let alone £50/week.

Isn't is amazing how parsimonious we can be if required, but if you are on benefits this claim by HSBC is mooted anyway.

But good efforts for getting by on so little. It's no way to live... but not having to live a lie to impress your friends will get you better sleep and keep your spirits up; versus GAP clothing, Starbucks, new iphones and all the rest of the yuppie crap that so many sacrifice their futures for with unbelievably bad credit deals.

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