Britons '52 Days To Financial Disaster' - Yorkshire Bs

[MRMX9]

No this report from Yorkshire Building Society isn't heralding some major collapse in the economy in late September - just that most Britons have savings that would last just 52 days if they stopped working. Apparently average monthly outgoings total £1,445, while average accessible savings are £2,474. More than a third (36 per cent) would last just 11 days and 90% have no income protection plans in place.

http://www.moneynews.co.uk/5114/yorkshire-...cial-disaster-/

Scary really - the DWP are going to be busy with those benefit claims!

[Si1]

YBS are simply trying to drum up income insurance to sell in their branches to make up for their loss making mortgage business.

[Laura]

YBS are simply trying to drum up income insurance to sell in their branches to make up for their loss making mortgage business.

Are they?

I would have thought the pre-existing poor condition of many would disqualify them from making a claim?

[Prof]

I wonder how this survey was conducted. If the average Joe has say, savings of 1 month`s salary, then they should be able to "survive" for 1 month if they lost their income. What I`d like to know is when their savings have run out, how much debt would remain ? That`s the killer. While working, they are able to pay the bills and any debt repayments, but in the event of no job, it isn`t just the bills that stop being paid.

I would have thought that those with the lowest levels of savings are the ones with the highest levels of debt. Double whammy.

[Si1]

Are they?

I would have thought the pre-existing poor condition of many would disqualify them from making a claim?

sounds fair. Mind you, if YBS (and other mortgage companies) had such insightful thoughts they may have avoided this mess in the first place.

I'd suggest you are overestimating their intelligence. This bunch, and organisations like them, think the mess will all be over inside 6 months.

[Guest happy?]

sounds fair. Mind you, if YBS (and other mortgage companies) had such insightful thoughts they may have avoided this mess in the first place.

I'd suggest you are overestimating their intelligence. This bunch, and organisations like them, think the mess will all be over inside 6 months.

Silly - and Ill informed, YBS are a building society, a look at their annual report (on their website) shows that they have largely dodged the mess. Their exposure is mostly through brokerage - Fitch recently downgraded it from A+ to A - not startling but not a basket-case like the ex building societies.

[Si1]

Silly - and Ill informed, YBS are a building society, a look at their annual report (on their website) shows that they have largely dodged the mess. Their exposure is mostly through brokerage - Fitch recently downgraded it from A+ to A - not startling but not a basket-case like the ex building societies.

"Mr Cornish said: "That is not sustainable. Last year we grew our mortgage balance by 15pc [they grew their mortgage balance in thwe last year of the boom - good idea?]. This year it will be between zero and 5pc." He added that growth would likely be representative of the market as a whole, but some analysts remain sceptical.

"If the housing market slumps sharply, it will be far worse than that," said one.

Cornish, who concedes that the economy is "clearly softening", believes the different macro-economic environment to that of the last recession (in the early 1990s) allows for more of an upbeat assessment.

"Unemployment was far higher and interest rates were up at 15pc. Now rates are lower and appear set to fall further and the labour market looks more resilient," he said.

He claims that even a 20pc fall in house prices could be withstood "if it is gradual and not accompanied by big changes in the labour market".

"

http://www.telegraph.co.uk/money/main.jhtm...1/ccprof121.xml

accepted that the attached article can be quoted in a number of ways.

analysts are divided on the strength of buliding societies.

"

Bankers believe it unlikely that any building societies will go bust even with a sharp economic downturn, but mergers and takeovers are likely, they claim.

"The bigger players like Nationwide will be agents of consolidation," one banker said.

Yorkshire was thought to have studied a takeover of smaller rival Derbyshire Building Society - which saw profits slump nearly 50pc last year - but both lenders strenuously denied the rumours.

Cornish, who talks of the perils of talking down the sector's fortunes....

"

they claim they can stand a 20pc fall in house prices, providing it is not accompnaied by stress in the job market, for example.

edit to add: Ian Cornish is chairman of the building socs association as well as chief exec of the YBS

edit to add: further comment in main body

Edited July 27, 2008 by Si1

[19 year mortgage 8itch]

http://www.housepricecrash.co.uk/forum/ind...c=83008&hl=

moor sauces

http://www.dailymail.co.uk/news/article-10...ncial-ruin.html

Edited July 27, 2008 by daiking

[Guest happy?]

http://www.telegraph.co.uk/money/main.jhtm...1/ccprof121.xml

accepted that the attached article can be quoted in a number of ways.

analysts are divided on the strength of buliding societies.

they claim they can stand a 20pc fall in house prices, providing it is not accompnaied by stress in the job market, for example.

edit to add: Ian Cornish is chairman of the building socs association as well as chief exec of the YBS

edit to add: further comment in main body

There's discussion that a number of the smaller societies are ripe for consolidation/takeover (indeed the Catholic is merging with the Chelsea) the supposition is that this is more to deal with scale of economies/ long-term viability rather than serious flaws in their lending books.

[Si1]

There's discussion that a number of the smaller societies are ripe for consolidation/takeover (indeed the Catholic is merging with the Chelsea) the supposition is that this is more to deal with scale of economies/ long-term viability rather than serious flaws in their lending books.

time will tell I guess. thanks for your informative comment.

[mbga9pgf]

time will tell I guess. thanks for your informative comment.

With the 40K I have got saved, thats a LOT of families without any savings or certainly far less than 2K....

[jonpo]

they claim they can stand a 20pc fall in house prices, providing it is not accompnaied by stress in the job market, for example.

yeah thats fine then. because its a well known FACT that peoples ability to pay the mortage is completly uncorrelated to whether they have a job or not

100% correct guarenteed 'employment and mortgage arrears negativly correlated'

hahahaha

[Nicholas Cage]

Saving represents that part of disposable income (adjusted for the change in pension entitlements)

that is not spent on final consumption goods and services. It may be positive or negative depending

on whether disposable income exceeds final consumption expenditure, or vice versa. Assuming that

saving is positive, the unspent income must be used to acquire assets or reduce liabilities.

In so far as unspent income is not used deliberately to acquire various financial or non-financial assets,

or to reduce liabilities, it must materialize as an increase in cash, itself a financial asset. If saving is

negative, some financial or non-financial assets must have been liquidated, cash balances run down or

some liabilities increased

Currently at -4300 Million but that may be adjusted later on in the series. People are running on cash

and credit, not saving like the last crash. The low interest rates along with high inflation make saving

much less appealing than last time. It (NSSH) has never been negative since 1958, so either it will be adjusted

or there is something very wrong.

Edited July 27, 2008 by maxwell

[interestrateripoff]

YBS are simply trying to drum up income insurance to sell in their branches to make up for their loss making mortgage business.

Can't see that being right as there are a load of clauses before you can claim, like if you expect to get made redundant within the x couple of months the insurance wouldn't pay out.

[pepsi]

yeah thats fine then. because its a well known FACT that peoples ability to pay the mortage is completly uncorrelated to whether they have a job or not

100% correct guarenteed 'employment and mortgage arrears negativly correlated'

hahahaha

Not to worry, they all claimed to have multiple sources of income when they filled in those self-cert forms.

[eightiesgirly]

I think the YBS is highlighting the fact that an awful lot of people don't have any kind of mortage protection insurance and very little or no savings.

This can be a real problem if your company makes you redundant as the golden redundancy payments of years ago are no longer paid.

A lot of employers don't pay sick pay ,or, for only a short time. If you are only off a short time it isn't too much of a deal, but if anything longer term occurs then the state payment starts around £50 a week, not many mortgage payments coming out of that.