UKC

http://www.bbc.co.uk/news/business-37504449

Just read this article about savings in the UK, apparently 16 million of us have less than £100 in savings.

Maybe its because I'm a natural saver but I find this quite shocking, how can a significant chunk of the adult population live so close to the edge all the time? And it's not even through poverty as such, apparently as it states:

"Roughly a quarter of adults with household incomes below £13,500 have more than £1,000 in savings."

So yes, some people are unemployed or only work part time on minimum wage, but this still doesn't account for all 16 million out there.

I find it crazy that people in full time jobs, and often on more than minimum wage live with nothing to their names. In my book if you work full time but spend all your money month to month just to get by in order to work again the next month then you're basically a modern slave. Yes living standards have improved a bit and you don't get whipped anymore but in principle a person in that situation is no different from a slave building the pyramids. In fact in a way they had it better, they worked but didn't even have to worry about being fed, clothed or housed in order to be able to keep working, where as these days the slave is expected to sort all that out themselves too.

Obviously not everyone can but it seems for those with the means to do so they should reel in their lifestyles a bit and start saving, it's the only way to escape the endless cycle and avoid the inevitable chains of debt when something big needs paying for. I just can't believe people are so drawn in by consumerism to such a degree that they put themselves in this financial hamster wheel so readily.

In reply to Lord_ash2000:

It's probably obvious, but I would imagine the increased cost of housing has a part to play (not dismissing the consumerism point you make which definitely plays a part) Also interest rates are so low that cash ISA's seem almost not worth it in the eyes of youngsters and there is very little education on personal finances. We are now seeing youngsters from the boomer generation who probably haven't had saving drummed into them from parents like the generation before, and loans are advertised like standard consumer goods, likewise credit cards.

In reply to Lord_ash2000:

Children? Child care costs? Mortgage? Commuting to work? Everyday bills?

There are plenty of other expenses, but those are just some that may contribute to the 16m not having any savings.

It is not necessarily only because of consumerism. Being a 40 something with all of the above, and more, we do not spend our disposable income lightly, but still find it tricky to maintain a reasonable buffer of savings in case of unemployment and unexpected costs etc. Paying for 2 funerals in less than 2 years certainly didn't help our savings.

In reply to Climber_Bill:

it's a lot ofthings that have all become more expensive. I expect this thread will turn in to old folks saying how the young folks splash all their money on new phones and cars and 3 holidays a year, while the younger folks say that's bollocks.

From my side I'd say it's bollocks. One night out a month skints me. Most friendsa re in the same boat. If they do go out or have a drink it rarely builds up to more than £50 a month or so, and you need something to keep you sane.

It's not just rent, it's car insurance/public transport which are both high unless you pay higher rent to live ni a city centre or get v lucky with job location, and a number of other things that have gone up over recent years.

And I'm not on minimum wage! Those I know who are have no hope of having their own place and unless they live with their partners in damp, tiny places they live with multiple extra people. And that generally means having to move more often due to groups not sticking together and that costs a fortune every time due to agent fees.

I now don't have to worry about child care costs but that's a major one. I'm amazed people consider being parents knowing what it costs now. It's one of the biggest economic issues we've got and gets worse year on year. Nopt just expensive but almost non existent outside of 8-4 so all the jobs available for part time workers tend to be impossible. Did you know it's now illegal to have a friend look after your kids while you work unless they're a registered child minder? Diffiocult to enforce but that's the level things are at.

In reply to Lord_ash2000:

I know a fair few people who live wage packet to wage packet and its probably a 50 / 50 split between genuinely skint people and people who feel entitled to a larger house than they need and a couple of holidays a year.

The worse one being my mate who is currently on his second 3 week holiday in China this year visiting his wife (don't ask) plus his week mountain biking in the alps in July and the week before he left on this latest trip his new 3k mountain bike arrived.
Yet he constantly moans that he can't get on the housing ladder and never has any money.

In reply to Lord_ash2000:
I'm sure you don't mean to sounds sanctimonious, but you do.

its not a case of just 'reeling in your lifestyle', what a ridiculous thing to say. you don't know peoples circumstances.
you are clearly lucky enough to be in a situation where its never 'either, or'. thats not the case for some of us, especially when 60% (or more) of wages can go on rent alone. how much do you think that leaves for 'lifestyle' at the end of the month? approximately f*ck all, saving anything is a distant dream.

In reply to Lord_ash2000:

I don't agree with comparing people who don't save to slaves, but I think you're right on the lifestyle issue.

People on low incomes often have to spend every penny they earn to get by, so that's understandable.

Some people on higher incomes still spend every penny they earn. I think some just have they attitude that they will buy what they can afford and just fit their lifestyle to their income. Consumerism has an effect of course, there are people who MUST have the latest trend. There is also the way little things add up, for example if you purchased 2 cups of coffee a day from a cafe, that's £5 a day, times that by 20 working days a month and that's £100 per month. Brew your own and you make a tidy saving each month.

In reply to Lord_ash2000:

Part of it could well be convenience and "spreading the cost options" that were not available 30 years ago.

Want a vacuum 10x the cost of a basic one - spread it with 20 monthly payments

Want a TV license? no need to save you can now pay monthly or weekly

Bills used to require saving as you only got one per quarter

If you wanted to book a holiday you needed to part with cash.... now it's a minimal deposit and just pay the rest before you go....

All of these things get people out of the habit of saving

In reply to Bjartur i Sumarhus:

i'm in the middle of a book called 'It's the economy stupid (Economics for voters)', and one thing I've picked up is that although employment is high again post the 2008 financial crisis, a lot of well paid jobs have been recycled into lower paid self-employed roles, and this sector has seen incomes reduce in real terms by 20% from pre- crisis levels.

Staggered! No wonder a big proportion of people have no savings.

In reply to Lord_ash2000:

I'd be happy with 10% back of what I spent on alcohol as a youth. Luckily I saw the light aged around 25 and stopped spending nearly everything.

Would agree with about the credit culture, 12mths 0% interest etc.. has killed the idea of saving for future purchases.

In reply to Lord_ash2000:

most of life goes in cycles and this stat does not surprise me.For about 8-9 years when we had young children and with care costs we just about scraped by ( we had fulltime jobs and childcare is not cheap), mortage etc.

Now its the reverse as we are older etc.

The trick was not to let it get (1) out of control and (2)earn more money.

In reply to Lord_ash2000:

Its possibly a bit more complicated than the picture you paint. Do you have any kids, or a mortgage, or student debts?

I once had a health amount saved, before we brought a house/had kids. Savings that I'd put aside while also paying off student debt. Then we brought a house and had kids, and my wife stopped working, and the ability to save anything essentially disappeared, despite cutting back where possible. No rampant consumerism here.

Now a few years down the line, I have plenty of equity in a house, and a reasonable pension pot, but almost no savings.

I can imagine there are plenty of people in similar situation.

In reply to Scarab9:

It is not that us oldies didn't waste money on expensive phones, they simply didn't exist. Having a computer in your hand, that could connect you to the rest of world wasn't a choice. Had they existed I'm sure we would have bought them.

In reply to Lord_ash2000:


I concur.

One only has to look through the windows of council estates to see the huge TV's adorning their living room walls to understand that consumerism has indeed gone mad. That's of course if you can see into the house through the rabble of unruly locals hanging around street corners glued to their mobile phones, all puffing away on cigarettes and sipping from cans of stella.

In reply to Climber_Bill:


No inheritance?

To answer the OP, I don't have any 'savings' per se, but I am paying extra into my pension trust to benefit from my employer's contribution, and have a wife and child to support whilst living in one of the most expensive places (housing & cost of living) in Britain (Guernsey). Historically, I overpaid into my mortgage because that saved more in interest costs than savings would accumulate. Now I can't afford to do that.

In reply to Lord_ash2000:




Maybe becasue some of us can barely afford rent and food, so can't save anything.

In reply to Lord_ash2000:

Life is expensive for sure....

I think another factor is the grounding people have as they grow up and whether they have been taught any sort of skills when it comes to looking after money.

I grew up in chaos with a parent who lived hand to mouth with next to no money and no grasp of budgeting or saving, so I never learned any of that growing up. It's only now that I've started to understand how to save a little or have a buffer and I'm 32.

The cycle goes on unless you break it.

It's very common for people to assume that others have had the grounding/life experience/life skills that you have. I work with young people day to day and believe me, that is not true. Some poor kids aren't even taught how to feed themselves properly and they tend to suffer a great deal for it.

In reply to Lord_ash2000:

It's so incredibly situational that it's hard to generalise. I'm lucky in that I have a reasonably well paid job in an uncompetitive jobs market in the North East. My OH and I can then rent a nice two bed house in an affluent part of town for <25% of combined wages. The same two jobs in London would net her a bit of a premium but I'd possibly face a pay cut as the market for my skills is very competitive there, our housing would more than double and transport costs would be significantly higher. We obviously have savings, my friends who're based in the southeast - by and large - don't. That's two well paid jobs with no dependants and reasonably austere lifestyles - add in a kid and almost any kind of social life which doesn't revolve around climbing and walking and you're quickly running short even then.

In reply to Lord_ash2000:

If you're lucky enough to have been able to save then bully for you but I think that you taking a very simplistic view of the financial affairs of other people.

All of my money is invested in a business and it's assets, if I sold up I would have plenty of savings but nowhere near enough income to survive on. If asked I would say that I have no savings, it would be foolish to have any amount of savings are earning less interest than I am paying on business borrowing

Everyone has different views on the purpose of earning money I guess. For me its about building something up, putting something aside each month until that pile builds up enough to enable you to break free of employment and walk your own path. Even if you stay in employment, you're not longer under the thumb of your superiors as much anymore because you've got the freedom to leave if you don't like it, take your time looking for somewhere else and work elsewhere. When you need that money at the end of the month or you can't pay the rent / feed your kids the power is very much in the employers hands as their threats become very real but when you've money in the bank all they can do in inconvenience you.

I guess for others it may be just a matter of working, getting paid, spending all that money to maintain the best lifestyle they can for the month then repeat. They'll never really get anywhere with regards to getting out of the system, they'll always be dependent on "the boss", selling their labour to each month to eat, but they are happy with that. I suppose that's what most people do regardless of income size but personally I just don't get it, never have.

The closet I got to that state was about 5 years ago when I was working full time, living alone and had effectively just had a 10% pay cut due to an alteration in the way bonuses were (not)paid. A combination of wage reductions and high living costs meant I was saving maybe £200 a month at most, and on months were I had a bill to pay (car tax, insurance etc) that could end up being nothing at all, then add in a random large expense and what pitiful amount I did save would be wiped out anyway. I was like "what's the even the point?" I could sign on the dole, still feed myself and end up with the same net wealth gain every month, basically £0. So after less than a year of that I quit my job and started working for myself and never looked back. Lucky I'd already saved up a decent amount beforehand in the better times to enable me to make that leap.

It worries me that a lot of people who haven't built anything up over their lives are all going to end up in poverty once they are old. And I'm not talking about the unemployed or low paid single parents here, their fate is not going to be a surprise to them, I'm talking about average middle of the road people, working in normal jobs on reasonable salaries who probably seem at least to be living reasonably affluent lifestyles. To maintain anything close to that they are going to have to keep bringing in that monthly wage right up until they are pretty much 70, month in, month out without fail. Those which can't do that are going to fall a long way and even those which do are going to wish they paid more into their pensions. By then (30-40 years time) it wouldn't surprise me if the state pension is means tested and basically like the dole for old people.

In reply to timjones:

You're right in terms of having vast sums in the bank. With interest rates so low it makes no sense to have many tens of thousands sat in the bank getting eroded by inflation so yes you'd be wise to have any significant sum invested in one way or another which is fine and that would be the case with myself. But everyone needs at least some buffer money, easily accessible , just in case of a hiccup which they can call upon. I'm sure you've got more than £100 to your name in a bank somewhere.

In reply to Lord_ash2000:


You have no idea what they have next to their names apart from the fact that they don't have much in their savings account. I suspect that this is more a factor low interest rates than anything. If you have a mortgage (for example) that allows overpayment, then you'd be a fool to keep any significant sum in a savings account.

I keep a small amount in a savings account for unexpected expenditure and the rest goes straight into the mortgage. In the long term, it will do me far more good there than earning a few pennies per year in an ISA.

In reply to Lord_ash2000:

I don't think the situation always relates to being poor/ not having enough money. What if you earn enough to just spend whatever you want, any time.

I know a few people like this. They don't have savings, but they also don't struggle for money.

In reply to Lord_ash2000:

I've just thought, does this include pensions?

Because i basically live on the breadline, have zero savings and little in the way of 'lifestyle' to cut back on, but i do put into a pension each month, as much as possible.

In reply to MarkJH:

As I just said to timjone, that's fine. It makes perfect sense to put your money into paying off mortgage or other debt or to put it in other investments (stock market, property, business, classic cars, etc etc) because like you said, interest rates are very low so having any significant sum in the bank is a waste of time.

But you'd be a fool to have all your money spent paying your mortgage down quicker and less than £100 in your bank at anyone time. As soon as washing machine breaks or car needs £500 spending on it and you need it to get to work you'd be screwed as you can't just take it out of your house overnight. So most people, including yourself quite sensibly keep a savings account on the side for such events.

What I'm worried about is that there are millions of working people out there who basically have no savings and are one minor hiccup away from a right nightmare and spiraling into debt. And those little hiccups will come, they come to us all sooner or later.

In reply to edunn:


I agree, most of those 16 million will be full time workers on more than the minimum wage, and that is what to me is so shocking.


Yes, I've no doubt there are a lot of people out there who earn pretty decent wages and live a great lifestyle with it. But they are pretty much just as vulnerable as someone on minimum wage and also no savings. Okay, they are likely more qualified and what not but they also have much bigger overheads. One day their company shuts down they are laid off , suddenly they have to find £1200 a month for the mortgage, £350 a month for the car, bills, cost of the kids and all the rest. If they din't find a compatibly paying job very quickly that lifestyle will crumble very quickly as there is no foundation, it needs a constant supply of new money to keep it propped up.

In reply to Lord_ash2000:


That may or may not be true. I can think of one occasion over the last 10 years where I had a genuinely necessary outlay that couldn't be postponed or absorbed into the monthly expenditure (a bill of about £1000).

There are essentially two strategies I could have used over that 10 years:
1. Keep £1000 in savings and pay the bill immediately incurring no interest on the bill, but paying interest on £1000 extra mortgage.

2. Put the money in the mortgage (saving the mortgage interest) and arrange credit to cover the extra expense (and pay interest on that).

In my case, option 1 over 10 years would have been much more expensive, even compared to putting the bill on a credit card for a few months. Obviously the correct decision depends on many factors, but for someone earning a decent wage and with easy access to credit, savings might seem entirely unnecessary.

In reply to Lord_ash2000:
I have a vague feeling, with the rise in the use of foodbanks, and the increases in rent, and the rises in the costs of mortgages, and the stagnation in rises in wages, that a lot of people don't have a lot of choice about being so 'close to the edge' financially. There was a Shelter statistic recently which said several million are only one pay check away from losing their home.

Here it is, it's 8 million people.

http://england.shelter.org.uk/news/april_2013/8_million_people_one_paychequ...

In reply to Lord_ash2000:

"In my book..." ...WTF? Sure you aren't a real Lord?

In reply to Lord_ash2000:
"Roughly a quarter of adults with household incomes below £13,500 have more than £1,000 in savings."

I wonder if that quarter are pensioners. It makes no mention of age in the article.
I would imagine if you had no dependent kids, no mortgage, free buss pass, cheap car insurance etc etc, £13k might be far more manageable, than if you were younger with kids and a mortgage.

You also need to factor in the DSS, as a contributor to the don't save attitude. There is little point in people on low wages saving, as if they are made unemployed, the dole wont pay out or will be reduced. If someone inherits money, or receives redundancy, or simply wants to save for the future, then they are penalized.

It's a similar story with pensioners. If you do the right thing, save, pay off the mortgage and retire (after paying a life time of tax and NI), you are forced to pay for any care costs. The money that may have gone to your kids (who have no savings) wont go to them.

In reply to PeterM:
No I'm just another average guy with a seemingly odd view of the world.

Is it really that different to being a modern version of a slave though? Consider what a slaves life used to be like from a historical point of your choosing. Factor in our modern advancements, our increase in living standards across the board, our many technological advancements and the fact we live in a society that no longer uses corporeal punishments and what do you get?

Okay people aren't technically owned these days and the employees have rights and stuff. But in principle if you're in a situation where by you work as many hours as your employer needs you for each month and all that pays for are the basics of life; a roof over your head, food, clothing and ability to get to work then you're not really getting anything more out of your labor then a slave did. Even slaves of old had to be housed, fed and clothed in order to work for their master and it was the master who had to pay to keep them. These days, people in this situation are like freelance slaves, they do the work but have to sort out their own lodgings, meals and all the rest. It may be a bit extreme a comparison and obviously I don't wish to belittle the very real suffering that real slaves throughout history had to live through but the fundamental principle holds true. You work to live, only in order to work some more, you never progress your status. Some people seem happy with that if they can have a good enough lifestyle, I'm not.

In reply to Lord_ash2000:

I'd say you're very fortunate indeed if you can move beyond 'being on the treadmill'.

In reply to Lord_ash2000:

The fact that apparently 16 million people have no savings doesn't really surprise me, the bit that surprises me is the £100 bit. Can this really be true that 16 million people (about 40% of the working age population) couldn't find £100 if need be?
Personally I wouldn't consider £100 in the bank to be real savings, how far would £100 take you? a few weeks of really tight food shopping for a small family or a week or rent in a cheap town.
And if something happened leaving you reliant on the DSS you get nothing for the first 2 weeks so you'd be screwed from the start.

In reply to Timmd:


Am I? Mean yes I agree I could be a lot worse off in life but is it really that hard to progress beyond the treadmill, do so few make it?

Just to be clear, I'm not some multimillionaire or anything, I do still work for a living, but I packed in the day job and work for myself these days, so I still labor for money I just do so on my own terms and I answer to no one. I'm also a landlord and most of my money is tied up in properties which are gradually paying themselves off and when I accumulate a reasonable sum of cash, another property is normally where it'll go into.

So I'm not totally free of the treadmill, if I stopped working for long enough everything would start to crumble eventually. However I take satisfaction that I'm at least moving in the direction I want to be going in. Compared to many people I have many freedoms already. But I simply look at it as if I've just got a longer chain on me than most slaves, I'm not totally free yet but I'm getting there. For me, that's the goal, if I find myself where I'm not progressing towards that goal anymore then things need to change, as they did several years ago when I fell into a rut.

I just find it hard to believe that some people like being in the rut, don't wish to be 'free' and will just carry on until they are no longer useful.

In reply to subtle:



thing is...big tvs aren't very expensive now. £150 will get you a pretty huge NEW (if not high spec) tv from tesco. And when you're skint you spend a lot of time on your arse in front of one (well most do). A one off (or one every 10 years or whatever) payment for a tv to keep you entertained when bored at home with no contact 6 nights a week is a pretty good investment.
Some people do regularly throw away money on things they don't need, but people having a flat screen or a PS4 in the lounge is not the sign that they're not generally struggling. Consider maybe the cost of keeping the kids entertained without that tv...it would soon add up (example...dont' lets digress on to kids watching too much tv)

I think it's a big problem in these discussions that it's not understood that people do NEED some form of entertainment

In reply to Lord_ash2000:


With the easy availability of very low rate credit (0% credit cards for example) - many people are actually better off paying down mortgage or whatever rather than having an 'emergency fund' in the long term. As others have pointed out, the likelihood of unexpected big bills is quite low, so getting rid of mortgage debt quicker is often a smart choice.

In reply to Edradour:

The amount your saving here though is a matter of a few pounds with the hassle of monitoring cards and all the rest of it. It's worth keeping more than £100 in your bank just for not having to monitor everything so closely.

In reply to Lord_ash2000:

If you are 16m tall then I guess a huge amount of money is simply going to be spent on food and clothes.

To illustrate this if the average height of a person was 1.7m and they consumed about 2500kcal per day then a 16m person would need to consume 23,500kcal a day and a pair of trainers, size 94, would cost about £500!

No wonder they'd have little savings to spend on anything else

In reply to Lord_ash2000:


I think people just have a different view from you.

Personally, I find the argument that the 'system' is all some sort of oppressive 'treadmill' designed to keep us as 'modern slaves' is overly simplistic and a little facile. You (and any other worker) sell your labour in order to have money to spend on other things (made as a result of other people's labour) - while the trinkets involved vary it's a system as old as human society and, whilst it is far from perfect, employment conditions etc in the developed world are better now than at any point in history.

Some people (like you) choose to save some of the money they earn instead of spending it. Others don't - who cares? It's no-one's business but their own, assuming that things haven't spiralled to such an extent that it's a problem. Does it really matter if people don't have savings?

I assume that you charge your tenants only the rent you need to cover expenses so that they too can get out of 'rut' that you are so disparaging of? Alternatively perhaps you could save any profit you make from them and give it back to them as a lump sum when they move out so that they can learn all about saving?

In reply to Lord_ash2000:


Again, that's your opinion. Personally, I do have an emergency fund. My partner, who earns significantly more than me, doesn't. We'd both be able to find £500 if we needed to quickly but the method would be different.

In reply to Edradour:

It would be rude of me to snigger childishly at that, right?

In reply to Lemony:

I would be disappointed if you didn't...

In reply to ianstevens:


Yet your profile says you climb several times a week in the UK and Europe.
Maybe if you climbed less you could save a bit?

In reply to Lord_ash2000:


Some might argue you're making money from people paying rent while there's a shortage of affordable housing. Certainly, there are people who want to buy somewhere rather than pay rent and they can't do.



I think that a lot of people would really like to be free, but don't see any prospect of being able to be, or have the means to buy another property to become the landlord of. I think retirement is what a lot of people look towards, for their time to be free.

In reply to Lord_ash2000:


"I just find it hard to believe that some people like being in the rut, don't wish to be 'free' and will just carry on until they are no longer useful."

Maybe some people don't have any savings because they have chosen to do other more enjoyable things with their time rather than slogging away at work like you have?

If people with no savings made a decision to spend their time enjoying themselves instead of sitting in an office then I'd say they are more free than you are.

In reply to Static:

It depends on what one would call being free I guess?

In reply to Static:

I think if people really can't afford to save, that is one thing. If however they are simply profligate and have no cushion it seems rather irresponsible. If there is any disaster, or even small problem, they are basically expecting others to cover them.

Also 16m is a lot of people - if the numbers are correct this goes way beyond those with little income.

In reply to MG:
As a few others have said, with interest rates as they are, why would you save money? At least in the south the only really sensible thing to do with money is keep paying off a mortgage and watching the value of the property continue to escalate.
I fully appreciate that many of that large number of people don't have a mortgage and do live hand to mouth but there must be many who don't have large amounts of savings but see no point in saving if they can pay off a mortgage if their situation will allow them some flex in a crisis (ie extend the mortgage term and lower repayments etc.).

And I agree that comparing the trials of wage labour, which we almost all engage in to some extent, with slavery is indeed facile. Governments can (and should) try to ensure that workers aren't exploited by employers (and it's true that that is much harder to do in a globalised market place) but I think that is still categorically different being from being bonded in law.

In reply to Lord_ash2000:

16 million plus 1.
I have a conservative government and a conservative lifestyle with a good job.
Which 'bubble' did you write this from?

In reply to MG:


The UK adult population is around 50m, of which approaching 32m of working. The UK median income is £22,000, which means that about 16m people in work are earning less than £22,000, we then have another 18m made up of people of
who are are not working for some reason, so pensioners, students, people with caring responsibilities and the unemployed, sick and disabled. I don't think it would be unreasonable to say that there are more than 16m on low incomes.

In reply to Lord_ash2000:



Derrrrr what do you think the Welfare State is for?

In reply to Static:


I think the freest people are those who spend their time enjoying themselves without spending money. I've done this at times of both low and high income, and I see developing free ways of having fun as an equally important investment for retirement as saving money.

Observation: generally if you have to spend money to have fun you won't have enough money, from pauper to millionaire.

In reply to Lord_ash2000:

Having no savings but owning (to some degree) a house is a very different situation to having no savings. The statistic doesn't distinguish between these groups.
Someone who on encountering hard times can sell their home is in a much better position than someone who has no property.

In reply to Lord_ash2000:

Here's a different perspective on working and saving and stuff:

I used to work full-time in a job I didn't enjoy, putting away money every month, good pension, paying off the mortgage, and generally being a good boy. I was quite seriously depressed.

Then I left my job, took the redundancy money plus all my savings, plus borrowed a load more, and 'blew it all' on education - 3 years as a full-time student re-training for a different career. I had a brilliant 3 years of not going to work, learning really interesting stuff, going climbing loads, and having an amazing amount of freedom.

Now I'm employed again, doing something I really like (even if the current job is far from perfect, every day has loads of satisfaction and I'm constantly engaged in something that's clearly worthwhile). I could work as hard as I can, get the highest rate I can for my work, do loads of hours, pay off my debts and get back to the financial stability I had before I retrained. But I can't be arsed. In fact, I've just gone part time! What's important to me is living the way I want to live, now. I'm in my late 30s, and I want the next couple of decades to be pretty chilled. I don't want kids, I don't want a big house or a flash car, I just want plenty of free time to go climbing because that's what I find fun. It'll take me longer to pay off debts, I won't save much, but after a while I'll be able to build up enough to be OK.

Now, I go to work not just for money, I go to work because it's a meaningful way to spend my time. I need a good dose of that, enough money, and plenty of leisure time so I don't get utterly depressed. Saving so that one day I don't have to work doesn't motivate me. I want to go to work, because it's satisfying and interesting, and I put a lot into learning how to do my job (and I'll learn a lot more). But I don't want to be there all the time, doing exhausting long shifts, commuting, moving around for the best money, my whole life revolving around it. It's got to be just one part of the picture, and if that means being in debt, not having savings and having to borrow more money if I need a new washing machine, then so be it. I'm in a perfectly comfortable position compared to people who work flat out and can't afford to save, and I'm really lucky to do work that's fun and meaningful (once I forget about the peripheral BS).

There's a lot more to life for me than financial security (but I'm also very grateful not to be on the breadline).

In reply to Phil79:




Describes me perfectly. I have a tiny ISA, a growing pension and enough liquid for about 2 months if the shit hit the fan. I earn reasonably well but saving is tough and I have a foreign holiday every three years.

I'm far from ostentatious so those who are away all the time or eating out regularly without a decent wage must be in lots of debt or the beneficiary of a decent windfall.

I did buy a 16 Lagavulin today though so Im not completely innocent.

In reply to Harry Ellis:



Your right..... I'm always popping into Waitrose for the weekly shop and when it comes to paying the bill I just say my house is worth around £10.5 million and I then just walk out.

Or if I have an unexpected bill say £5000 I sell the house! Wonderful advice.

In reply to Lord_ash2000:

Go to university and the biggest lesson you'll come away with is how to live in debt.

Savings!!! Good one.

I've got some and I always have, but that doesn't mean I see people without them as failures.

I come from a time when education was free, we were encouraged to go as far as we could with education and to not be in debt. It's almost the mirror image today, kids are encouraged into debt as early as possible.

Besides that, savings are losing money month on month with the piss poor interest rates available.

In reply to Indy:

...and what's happening to the Welfare State at the moment? Nothing one might call positive in times of austerity.

In reply to Indy:



It's pretty obvious what they meant, you have some options.

In reply to Indy


I'm not offering any advice, I just struck me that there are a lot of different situations within that 16 million people and it would be interesting to have it broken down a bit.

Of course I think having some spare cash available is smart. I generally do, patlrticularly since I have no collateral to potentially borrow against in an emergency.

On a general note I think people have become unaccustomed to saving since hire purchase etc became common. Also peoples expenditure tends more these days to be a lot of monthly subscriptions - internet, Netflix, gym memberships etc so income is easily spent before its earned these days.
Im usually saving up for my next retirement and fully expect to die in happliy n poverty with skin like leather and knackered knees!

In reply to wintertree:


Too right! My happiest times and best experiences had nothing to do with money [yes yes I know I know I needed money to get there etc., but that's not the point].

Anyway I'm not in the 16 million. I've got 103 quid in the bank.

In reply to Lord_ash2000:

Once I've paid all my bills (including fuel), I'm left with £280 disposable income for the month. I'm not too sure how the OP thinks I can manage to save anything worthwhile out of that and not live miserably each month?

In reply to sg:


As I said, so you have some readily available cash for the unexpected. Most mortgages won't let borrow more at short notice.

In reply to Lord_ash2000:

If, after expenses, you can only manage to save a paltry amount per month - be that £20 or £100 - what is the point in saving at all? You are only foresaking things you might enjoy now so you can have an extra £10k in the bank account in 10 years time...by which time houses prices/desposits will have increased by many times that amount and that £10k will be largely pointless.

I suspect lack of savings is in large part a result of underlying despair. Things don't seem like they are going to be better in future, so why bother saving for i?

In reply to Dax H:

Ah yes, the classic judging of the under 30s because they want to do other things besides work, eat and sleep. We have hobbies to you know! Given that I can go climbing in under a 30 mile drive, and can walk to my local wall (which I have a second part time job at so don't pay) UK climbing is hardly a great expense to me.

I probably do one Euro trip a year, trying to keep costs to the bare minimum. Saving that £250/300 a year is hardly going to look after me if I ever get to retire, and is less than the rate house deposits increase each year - so what's the point saving it?

In reply to ianstevens:


1) As a buffer against resorting to credit come an unexpected problem. This saves more money - compared to the alternative of using credit.

2) Once the process of budgeting for saving becomes embedded in a person's mindset, they may will find their spending patterns change and they save more.

If it's only £250 a year what's the harm in not saving it?

In reply to wintertree:
As somebody living on benefits, I've found that once I started buying my fruit and veg from the green grocers after finding it cheaper, I've started thinking of other ways to start to allow my money to build up a little. I'm helped by the 'bank of dad' to some degree as well, but it's a good point about a mental shift happening. Small things like going to the budget shop down the road from the supermarket for cleaning products seem to help when it comes to living cost in the long term.

In reply to wintertree:


Spot the mistake: If it's only £250 a year what's the harm in saving it?

In reply to David Martin:


Because savings will help you buy something, or cover an unexpected bill. If you don't have the savings you end up borrowing and paying more. Saving and having a buffer you dip into keeps more money in your pocket and prevents lost money on fees or interest rates of loans. If people don't ever save, they never get to the point where they have a meaningful amount.

In reply to MG:


if you over pay a mortgage than you can take that over payment back as a payment holiday in the future. So whilst the building society won't give you the cash, you could have that money every month spare, or use it to help see you through a rough patch between jobs etc... But, if you don't use and it stays there, your loan will accrue less interest and you'll finish paying off your mortgage early. If you can afford to over pay, then you really can't lose out, especially if interest rates rise in a decade or so it will be one of those things you really wish you did.

In reply to summo:
But generally you can't use mortgages as a bank account like that - offset mortgages do offer this, which is a reasonable approach.

In reply to summo:

The argument being used here is that people are buying too many things, hence they have no savings.

So, presumably when you say "savings will help you buy something" you are referring to what are big important things (e.g. a house, sending the kids to university)?

The sad reality is the amount many people can afford to put aside, which would necessitate sacrificing most/all creature comforts, will never come close to putting down a deposit on a house or pay for their offspring's uni/living costs. And for every year you save, certainly the deposit on a house is even further out of reach. Its a pointless goal and I imagine anyone not already on the ladder realises that.

On the other hand, interest rates on loans, on the off-chance one is needed, aren't that excessive. So budgeting for an occasional loan, rather than forgoing any enjoyments during the year simply to ensure you have a few grand in the bank (earning no interest and being inflated away), isn't a bad option.

You talk about loan interest as "big" and savings as "useful". When you're at the lower end of the income scale its unlikely you're taking a loan out for conservatories, loft conversions or a fancy car. Rather, any loan you require is probably going to cover some relatively small immediate need, so the absolute amount spent on interest will likewise be small. At the same time, the kinds of savings they can realistically put aside are anything but useful.

Savings are very easy to advocate when you have your house, your car, a reasonable income and prospects on the horizon. If the future is bleak no matter what you attempt to save, if the amount your earn against your basic outgoings means the sacrifices required for any kinds of savings cut deep, its a bit patronising to accuse people of being short-sighted by not having any.

As much as you say tomorrow may bring unexpected expenses so best put something aside, its equally logical to spend what you having enjoying the here-and-the-now because tomorrow you are likely to have nothing anyway. Saved a load of cash and lose your job? Benefits won't kick in until you have spent your savings anyway. What did you gain from having that cash in the bank?

In reply to David Martin:

No, doesn't have to be a big spensd, washing machine packs in on Friday night on a family of 4, how quick can they replace it before the kids run out of clothes? £300 in savings (from saving the odd £5 or 10 here and there), brighthouse scam, payday loan.... you decide.


but you save progressively, many people once they start saving can start to save a little more as they progress. They get a pay rise, change job etc.. it all increases the pot, never starting saving because it's not worth it is an appalling attitude and makes you dependant on others for life.


the number of people who borrow at high rates to buy near essential white goods, or use payday loans would indicate any amount put aside monthly is worth the effort.

Most people who also only have a little spare money, won't be accessing their emergency credit at the kind of interest rates you talk about. Even only getting 0.5% on your savings, is better than paying between 10 and 30% on that 12mth installment loan. There is still a financial benefit there in not paying for the interest.

In reply to David Martin:
That's just defeatist nonsense. There are any number of reasons to save as outlined above. If you assume things are bad and will always be so, they probably will be. If you assume things will get better, and start behaving in ways that might make that happen, which includes developing a habit of saving something, they probably will improve. Taking house deposits as an example, prices are pretty static currently and mortgage rates at all time lows. Those who have saved over the last period will be in a position to take advantage of this, those who have taken the its-all-hopeless-lets-spend-it-now attitude, won't.

In reply to MG:


nationwide you can and they are one of the Uk's biggest. You don't even need to write or ask. If you don't pay in any given month, the payment is automatically taken from you over payment. You don't need a parallel savings or current account either. Each annual statement has a box showing the over paid total available. Obviously it is their interests that you let it run the full course.

In reply to MG:


So the old "just try and success will come", live the American Dream, those who aren't managing to get ahead only have themselves to blame?


I think that shows how out of touch you are with earnings V house prices.

In reply to MG:


Unless of course they haven't saved enough for a deposit, in which case they aren't. And given that an average first-time-buyer deposit in the UK is now in the region of £30,000 - or £95,000 in London and similar in quite a lot of the South East - quite a lot won't have done.

In reply to David Martin:


Obviously a lot of luck involved too, and social capital helps but generally successful people make good decisions and behave in sensible way, yes.


Not really. Round here, for example, there are plenty of decent houses at <£150k. So a deposit of £15k would be sufficient. That equates to saving £100/month for 12 years. Or 6 years for a couple. Hardly unrealistic even on modest salaries.

In reply to David Martin:


Or how out of touch you are with the regional variation? Round our way you can get a serviceable 2 bed mid terrace for £30k to £60k depending on the area and there are plenty of opportunities for people prepared to work.

It seems few people are willing to move far to find lower house prices and work.

In reply to wintertree:


But you're talking about the working poor, not the unemployed. if you've invested time and energy into a career why would you want to move? a lot of people don't have a choice where they live and/ or work for their chosen career.

id love to move near you and snap up several of those cheap-as-chips houses you mention. but it would be quite a commute into The City.

As others have said, why would anyone live a shite existence for 20 years to scrap together a modest amount that will never be enough to buy an aspirational thing like a house? If I cut back on everything and ate noodles every day while sitting in the dark i could probably put away £2-300 a month. so in 20-30 years id have enough for a mortgage deposit around me.... great. and you cant see a problem with that?

In reply to David Martin:



I agree with the comments above. Average earnings v average house prices are unfortunately a misleading measure, as if you are a first time buyers you will not be buying an average house, you'll be starting small. If you are not a first time buyer then you'll generally have a deposit from the sale of your previous house. In fact, average earning to house price ratio, as a practical measure, is nearly useless.

In terms of affordable houses, [checks rightmove] within a couple of miles of me (Birmingham) you can get a 3 bedroom semi for 25k. That appears to be a one off, but there's 50 results under 80k for a residential property, and will over 100 results for less than 100k.

A recent interview with an entitled young lady reported her bemoaning the fact that with house prices being so high she could only live where she wanted to by sharing with a friend, and that on her own she would have to move out to zones 3 or even possibly 4.

#firstworldproblems

In reply to La benya:

Which pretty much sums up in one sentence what I think is wrong with people like you (thank you for proving my point for me, much appreciated).

You've got the whole thing the wrong way round. One does not choose a career and then expect the rest of the world to reorganise itself around your earnings potential.

In reply to John_Hat:
So basically you're saying that the problem is feckless, irresponsible young people wanting to build sensible long term careers and contribute to the economy?

In reply to Ramblin dave:
No, I'm saying that young people wanting to build long term careers and contribute to the economy have to be realistic and practical.

Sometimes that means compromise and not getting what they want.

In reply to Dax H:

He is Lord_ash, what did you expect from the gentry?

In reply to Lord_ash2000:
This seems timely:



http://www.bbc.co.uk/news/business-37508968

(apologies if it's been posted)

In reply to Lemony:

Well in your 30's you are likely to have young children etc, so your wealth is likely to be lower. Its a statement of the obvious.

In reply to neilh:

re-read the post before everyone takes the piss!

In reply to Lemony:




are these real amounts or modern day equiv.? Given the interest rates and inflation between those times? Anyone born in the 80s will have had 10 years less working time etc.. so if you look at average earning in the era say £10-12k, that's soon accounts for why a 40+yr old might have more than 30+ yr old etc..

In reply to neilh:

Re-read the article. Actually, reread the first sentence of the article. Actually, reread the first sentence of the quote that I pasted from the article.

In reply to John_Hat:
So I should have chosen to become a coal miner (or whatever industry is prevalent around these £60k houses) instead? generally houses are that cheap in an area for a reason. lack of jobs being one of them, and while the poster suggested that there were jobs available to those willing, he doesn't say what type. and not every type of work is suitable to everyone (otherwise the area would be more affluent and thus house prices wouldn't be so low)
Rather than wanting to do something that interests me, plays to my strengths, allows me to live where i want to live (despite the crippling cost) and be near to my friends and family...?
I don't follow your argument, at all.

I don't expect the world to move around for me, however i would like a chance at the same things the previous generations had (of course, knowing full well that my generation has benefits not seen in the previous too, just we are specifically talking about finance, and homes).
Also phrases like 'people like you', no matter what your intended malice, or lack there of behind it, always make you come across as a wanker. You don't know me, do not presume that you do.

In reply to La benya:


Yes. Or failing that, at least not to be told that we're feckless spendthrifts who have only ourselves to blame when we point out that we don't have a chance at them.

In reply to La benya:


You are, unfortunately, continuing to prove my point.


My sincere apologies. Please replace with "people who come across as entitled, snobby and arrogant". Is that better?

In reply to John_Hat:
It strikes me that a slightly less judgemental way of looking at their post might be that, where there are cheap as chips houses, there aren't the jobs around in the areas to make a living feasible - at least not for all people, where as with the City being a magnet for people, there's a diversity of job opportunities, but also lots of people competing for housing, making housing harder to afford, meaning people can be caught between two stools.

In reply to Lemony:

OK....lol

In reply to Timmd:

OK, except we are talking - as I pointed out - Birmingham.

I'm well aware that to many Londoners this means "outside the M25" and hence terra incognita. But it's a big city about an hour north of Euston - about the same time you'd spend getting from Euston to Canary Wharf on the tube and DLR.

I'm not denying that there are more jobs in London - hey, it's a bigger city. But if you can't afford to live somewhere then, erm, don't take a job there.

In reply to John_Hat:

How have I come across as entitled, snobby and arrogant? Because i work in the city? Because I have aspirations to be able to buy a house one day? and why is it unfortunate that i'm proving your point? I'd love to be able to learn something from a debate/ conversation so i i were to prove your point it would be fortunate, however seeing as you're delivering your point with the finesse of a cabbage it seems unlikely

Again, just saying i'm proving your point doesn't really explain it. so please, elaborate.

why should i have picked a career based on where the cheapest real estate is rather than where i grew up, why my family ties are, where the industry that interests me and plays to my strengths is and where my cultural and social interests lie?

In reply to La benya:


I imagine proportionally your weekly food bill represents less of your wage than your parents, you own / use more labour saving devices in the house, spend more money and time on leisure activities and holidays, you probably eat out more, takeaways etc..

Lifestyles have changed and money now goes in more different direction. Most of our parents paid for only a BT phone line & 3 tv channels, now we have phone/s, computer or pads, mobile/sky/broadband contracts.

Life has changed and direct comparison are rarely a good example.

In reply to John_Hat:


actually, i replied to someone elses comment regarding an unspecified area. you bought up birmingham after the fact.

In reply to summo:

you would be wrong, i imagine.

you own / use more labour saving devices in the house, spend more money and time on leisure activities and holidays, you probably eat out more, takeaways etc..

again, wrong... what do you imagine my lifestyle to be?! all oyster bars and river punting?!



youre right, however comparisons of who could afford to buy a house, and from what salary/ job can be directly compared.

In reply to La benya:


Well I'm guessing from the person's favourite wall that they're talking about Sunderland or South Tyneside. Which is an easy commute to Newcastle. Obviously all we do here is mine coal, obviously, but I think there's a few folk who work in some supporting industries.

In reply to La benya:


Blue?

In reply to Lemony:

i didnt realise newcastle had been the location for Lloyds of london's next branch. ill move immediately.

if you can find a house in newcastle in a middle-of-the-road location for £60k ill move tomorrow

In reply to summo:


sorry, that's gone over my head.

In reply to La benya:

I'm sorry that your skills are so little in demand that you can't even move company, let alone city.

In reply to Lemony:

huh?

A) why are you trying to have a dig at me?
B) what are you basing that assumption on? being a lloyds broker is a specialised job, which can only be done in the london market. The complete inverse is true, the skills (and required qualifications) are quite in demand. Theres no shortage of places for me to work, however they are in one place.

people seems to have an illogical reaction to people living in london and working in the city....

In reply to John_Hat:



Hmmn, possibly fair points. Posting 'people like you' to strangers you don't know anything about is probably a bit off though, when you know diddly squat about them.

In reply to La benya:

Well there are plenty of insurance brokers jobs elsewhere in the country...its a very transferable skill. Knew a guy who was an aviation lloyds broker who moved to....Liverpool(!)..and he had a southern counties accent...did far better for himself- nice big house as well....

Hasten to add I do not work in that market.

In reply to wintertree:





Cheers for the condescending life lesson. I rent, so any "unexpected problems" there are covered by my landlord, and plan my budgets around when I need to pay large expenses such as car insurance/tax/servixing. Otherwise, a holiday to Europe every year is far better at allowing me to relax than a bank account with an increasingly worthless (given that inflation > interest) £250. Saving IMO is about big things (i.e. property and pension) not the small things.

In reply to La benya:

Take no notice of them, you have my sympathies. I have worked in the city all my working life and am fully aware of the problems of housing costs and savings. I moved house relatively recently (I moved out of M25 to a rural location by choice) but as it was my third move in 17 years so I have ridden the wave of rising house prices by pure luck.

My advice to anyone working in the square mile is to look at the overground train lines into Moorgate, Fenchurch St and Liverpool Street and look at the places about 45mins out. Or buy a motorbike and ride in from wherever (for the City anywhere along the M11, A10, A12, A13 and as far out as becomes affordable) I always hated coming in from South london and from the West? Forget it

In reply to La benya:

My partner worked for Aon for many years, from home living in the dales. Her head or base office which she rarely went to was the build next to London mayors.

Not everything, even in finance is or has to be London based, London living.

In reply to neilh:

And that's the plan. Once I've had the relevant time and experience (Maybe not Liverpool though).

In reply to summo:
She won't have been a lloyds broker then

In reply to La benya:

OK, I'll try and explain my view. Apologies for being sharp.

The way the world works is that you choose a career (most of the time). Unfortunately you have to accept that this career may result in a bad side as well as a good side.

e.g. Lady Blue, as an optician, has to accept that it is overwhelmingly likely she has to work Saturdays. That has a pretty major effect on our weekends.
e.g. I have to accept that if I want to do the best I can in my career (financial sector) I'll probably end up living in hotels or B&Bs during the week.

When we chose those jobs we accepted that downside. In fact, every choice you make in your life has a downside.

Where there's an issue for me is where someone states that they want something (e.g. living and working in London) but then doesn't accept the downside, or blames the downside on someone else, or another generation, or the government, and generally refuses to take ownership of the fact that choices have consequences. If it's your choice, it's your consequence too.

"Entitled and Arrogant" comes from the "we deserve" mentality - e.g. I deserve to live in London AND be able to buy a house AND have a good job AND have an exciting cultural and social life AND be near my family. Nope, you "deserve" none of that. You have to earn it. Most people don't ever achieve it.

The "snobby" bit was in response to your disparaging view of the kind of places where coal miners lived. Actually, that's some of the most beautiful and wonderful parts of Britain with fantastic scenary and great people..

Also, I know it's an oft-repeated refrain, but people like me (if you like) often are confused with attitudes of the generations that came after us. You mention that if you cut back on everything you might be able to save 200-300 quid a month.

Now to me that means that in 5 years you might have nearly 20k, and that's enough for a 10% deposit on a 200k house - or a 5% deposit on a 400k house - I've just done a quick run on moneysupermarket and come up with 35 FTB mortgages offering 95% mortgages on a 400k house at 2.5%, by the way. So, to me, if you cut back and saved for 5 years you could buy a house quite easily. It wouldn't be a fun five years, I'll admit that. But that's exactly what my generation had to do - spend years saving for a deposit, not fun years either.

So when someone comes along and says "I'll never be able to buy a house, other generations had it so much better, I'll have to eat pot noodles", then I think back to when I was eating kwiksave no-frills fish fingers (different generation, same vitamin content) for exactly the same reason and start wondering what the current generation's problem is... ESPECIALLY if they're bemoning that they can't find a place to buy in the most expensive part of the UK.

Hope that helps.

In reply to Bjartur i Sumarhus:

Eventually that will be the plan but for the time being I'd rather spend the money tha the train costs on rent and save myself 2 hours commuting (in the hopes that eventually I'll start earning a decent wage and can do what I want).

In reply to La benya:

Probably Mumbai is a better bet........

In reply to Timmd:


Fair point - have apologised.

In reply to John_Hat:

I started to reply in detail and realised we fundamentally disagree on almost everything and while I respect your point of view, I don't wish to engage with it. But I appreciate your reply none the less.

In reply to neilh:

I'm a redhead, couldn't take the sun

In reply to La benya:


Agree with that though

In reply to John_Hat:

But you have to admit that the compromises you have to make if you want to own a house have got quite a lot bigger. A couple of generations ago, you might have said that if you want to own your house then you have to accept that you probably won't be able to live in an area like Knightsbridge or South Kensington. These days it's more like London or a lot of the South East. This doesn't seem like a healthy direction to be going in, socially or economically, particularly in the absence of any effort to make long-term renting suck less.

In reply to Ramblin dave:

As I didn't buy my first house (in 1995) in London or the South East I can't comment. I did buy my first place in Leeds though, and plenty of places in Leeds were well out of my price bracket.

In reply to Lord_ash2000:

Given all the loans and credit cards people have been talking about, has anyone tried claiming PPI to get their savings pot off to a good start?

RRIC

In reply to ianstevens:


I tried very hard not to be condescending and just to explain my view.


Then you're luckier than me. I nearly got floored by an unexpected expense that had nothing to do with my rented accommodation when I had no cash. The open ended nature is implied by "unexpected".


That's where it ends up, but for many people - myself included - it started with the small things.

In reply to John_Hat:


The point is that as house price to earnings ratios go up, we're moving from "it's unrealistic to expect to buy your first house in an expensive neighbourhood" to "it's unrealistic to expect to buy your first house in an expensive region".[1] This doesn't seem like a healthy direction to be going in.

[1]Along with a bit of "stop whingeing, if you didn't have a £20 a month mobile phone contract, you'd have the £60,000 deposit for a house in the expensive region in no time."

In reply to La benya:


Yes, but the point is that there are options, even if people don't take them.


Of course they have a choice. It might not be one they want to make.


Well you'd have to quit working in the city. It's a choice. People can and do retrain to lower paid jobs, move north, own a house sooner and have more money.


So don't - almost anywhere in the world apart from South England is better. I got out rather than slog for nothing.

As it is, sounds like you could save over £100k in that time. That's enough to outright buy a house to retire to with your state and 2nd pension. Sorted.


Of course I can, but I see a bigger problem with doing the same slog and reaching 65 penniless.

In reply to La benya:


No, she made a conscious decision not to take London employment. She could earn much more there, but it would in the end disappear on housing and commuting. Better to earn a little less, but it goes twice as far out in the sticks. It does of course mean a little bit of flex in terms of what field or work she picked up, but that's life.

In reply to summo:

LOL, my wife is a director at Willis.....something in common

In reply to wintertree:


You're just swapping one compromise for another then. I think mine and others argument is that it wasn't and should be that you have to make this choice of either living piss poor or leaving an entire geographical location.


I quite like living here though, what a shit choice to have to choose between where you grew up and being close to the people you love, and affording to live.

I'm not sure your maths works out there, and of course in 20years time 100k wouldn't equate to the same % of a deposit on a house as it does now. Just as it doesn't now compared to 15 years ago.



As I said earlier, I pay into a pension, it's everything after this I am considering 'savings' in the sense of being accessible.

In reply to Lord_ash2000:








I agree with you, unfortunately we have built and economy where having savings doesn't even make financial sense, the interest rates are so low, they just lose value.
Basically you're much better off getting the biggest mortgage you can afford. If you lose your job, you'll get benefits, and possibly your local authority will help you with the mortgage, and at the end of the day, you have a valuable asset.
If you built up savings instead you won't be entitled to benefits, and you'll be expected to live off those savings.

And that's where the story gets better, when the whole system collapses, and people can't pay their mortgages, the central banks bails out the banks, inject billions in the economy, lowering the real value of those savings, and reduce further interest rates.

So basically if like me you save most of your income, you are getting shafted. I realise now that I would have been much more wealthy had I spent all my money in a big ass house and bought stuff on credit cards, instead of living modestly and putting money away for a rainy day.

In reply to La benya:


It's less bad than the choices many people in the world face. Problem is, if you ask for more money other people are prepared to live in house shares and work for less. What to do? Stop people migrating to work in the UK? Not popular in these parts as suggestions go. Unless there's less surplass labour you're on a hiding to nowhere. Export more people, import fewer people, create more jobs (automation somewhat makes this unlikely), retire people younger (hard to do with a culture of not saving). Something has to change.


Yes. I didn't like doing it 18 years ago. I got over it.


I'm assuming you can invest it to match inflation, give or take. Despite moaning about savings rates there are better things to be had out there. As house prices here start at £30k and aren't really inflating in that part of the market it's not such an issue anyhow. None of us can forecast 30 years ahead mind.


Fair dos. I don't trust my pension fund... Tinned food and shotguns is where it's at.

In reply to La benya:

as my dad taught me" life is just not fair, so get on with it and stop moaning!"

In reply to La benya:




Hardly. No where in the UK is more than a few hours from London. If you choose to live there fine, but don't then complain about housing costs!

In reply to Lord_ash2000: I think the OP, despite his belief he's a ruthless entrepreneur has led a bit of a charmed life, and also has opted not to have kids, which makes things a fair bit easier.

While the principal rant here seems to be youthful fecklessness, I can assure you it's pretty easy to be middle aged and 'stressed'. A combination of rough trading conditions, a divorce, meaning splitting the properties and a reasonably large child maintenance bill monthly can soon hammer your savings.

I wouldn't get cocky - saving money can soon seem a luxury

In reply to Lord_ash2000:

some folks gave all their savings to Sir Philip Green so he could have extra...pretty thoughtful if you ask me

In reply to wintertree:


Fair enough - I guess its hard to try and not sound condescending in this situation, especially in the written form. Sorry for my mis-interpretation!


I suppose that's true - however I do attempt to do as much as possible to mitigate these, but like you say, that's somewhat against the definition of "unexpected"

In reply to doz:


Explain.

In reply to wbo:
You make you're own luck/charm. I'm simply doing things in the right order and when the time is right. If and when I have kids it'll be when me and my parter are ready, both in terms of our relationship and financial situation. And yes, even then no one can guarantee a lifetime of stability but you can certainly stack the odds in your favor.

If I'd have had a handful of kids back in my early 20's with some random girl I hardly knew then found myself by 35, separated and permently skint having never had the chance to accumulate anything then it would be my own fault for rushing into it all before things were suitabley in place.

It's very easy to make poor life choices then accuse those who havn't of just being lucky or having a charmed life. There are countless paths my life could have taken some better, many worse I am where I am becuase of the choices I've made in life and the choices of those before me. Just as the path of any of my future children will be decided partly by my choices now and again by thier own choices.

We're all delt diffrent hands in life,but you have to play that hand the best you can. I was born and raised in one of the most deprived towns in the country to poorly educated parents from working class backgrounds, one of which I lost when I was only 6. I'm also dyslexic and can't spell to save my life oh poor me! I could have just sat there working on my sob story as to why I've never got anywhere in life or I can get up and make the best of what I've got. I decided on the latter and havn't looked back.

In reply to Lord_ash2000:

Heard this morning that, in all probability, I will need to drop everything and come back to the UK at short notice in the coming weeks. "Luckily" we have enough in our savings to cover the flights, car hire, and other expenses that will be entailed.

In reply to neilh:


There's nice parts of Liverpool.

In reply to Timmd:

Job wise I was referring to. Liverpool easily a better city.

In reply to Lord_ash2000:

No sooner do I speak than I'm spending a few thousand on flights and car hire and other stuff.

Lucky we have the cushion available.

In reply to John_Hat:

But the flaw in your agument is that you'd need to be earning more then twice the national average wage to service a £400,000 mortgage. If it rook 5 years to save up your £20,000 deposit then I think it unlikely you'd get a £400,000 mortgage

In reply to Lord_ash2000:

My parents had one of those fake signs put up in our kitchen. It read "Teenagers. Leave home now whilst you still know everything."

It seems applicable here.

In reply to Lord_ash2000:

Ive been on that hamster wheel for a long time. Its purely a case of telling yourself you need this/this looks like fun/we should go do this/this bit of kit is going to be essential and so on.

I dont make a large amount as a chef, but with a few slight changes ive collected quite a bit, but for what im not too sure. Had to tell myself the first 2k is for a rainy day fund (not having this has caught me out a good couple of times in the last decade) and the saving after that is just going to be for the sake of saving.

All i can add is that now my hobbies are paid for - full rack and a reasonable bike, that my hobbies are pretty cheap

In reply to Indy:


1) Person concerned is working as a lloyds broker. They are, (I presume, as they live in the city) already paying rent, and a significant amount of rent at that, and can still afford to save 200-300 a month.

I appreciate that in order to know this you'd have to read the whole thread.

2) 35yr mortgage at 2.5% on 380k is around £1400. Average salary in london is around 48k, nationally 27k. Take home for the former is approximately £2900, the latter £1800. It's doable. On the London average wage, entirely doable.

So no flaw. Also, how long it took you to save up the deposit is utterly irrelevent to a bank when loaning you a mortgage.

In reply to John_Hat:

My son and his wife bought an OK house in Twickenham last year - their first. They had scraped together a deposit from here and there but their mortgage repayments are comparable - or less - than they would have had to pay for a comparable rental property.

Granted they have reasonably well paid jobs, though my son is public sector, and daughter in law is a buyer, so neither are in finance or law, but yes, it does seem to be doable.

In reply to John_Hat:

In the current climate would a bank lend you that amount?

Are you likely to get a 2.5% rate with a 5% deposit?

In reply to Rob Exile Ward:


Twickers!!! and what's your average rent there?
My sister had a terrace house, near to the Cabbage Patch, back in the 80s. She'd be a cash £Millionaire now if she'd hung onto it.
A deposit on your average Twickers house is completely unachievable in several lifetimes for the subjects of this thread.

In reply to Indy:

Explanation!...
lot of people trusted a system with their hard-earned life savings and lost the lot so maybe some folks now feel little incentive to save anything in a financial system that is evidently somewhat self-interested
Clarified? :~)

In reply to John_Hat:




1) Banks don't give a flying fig where you work all they care about is you paying back what you borrowed.... with interest.

2) Take home of £2900 = about £46k/yr. 4 x income = £184k mortgage. Yet you seem to think bank will lend 8.5 times income!!!! Laughable.

With your 'average London wage' sillyness are you saying if you combine my income with that of one of my house cleaners she'd be able to afford a very nice London home? Coz oddly she lives in a council house.

This lloyds broker is happy he can save a max of £75 a week.... sorry but does he push a tea trolley?

In reply to Lusk:

Viewed a house the mid '90s valued at £450k. It sold last year for £5.5 million.

In reply to Indy:

1) Yes. I know. I work in the finance industry. The point I was making was that Lloyds brokers are not exactly known to be on low wages. Hence your average salary comment is probably false.

2) Nothwithstanding the above, you said that "you'd need to be earning more then twice the national average wage to service a £400,000 mortgage". I was demonstrating that would not be the case by taking the cost of the mortgage and comparing that to the take home pay of someone on (a) the London average salary and (b) the national average salary. I wasn't making a comment on the salary multiple, merely replying to your point on affordability.

I think further engagement between us is pointless as you are not actually reading my posts. Or, for that matter, the rest of the thread, and appear to be simply looking for an argument, quoting out of context and misreading posts.

As to the savings (or not) of the said lloyds broker (La benya, above), I suggest you ask them direct.

In reply to Indy:


F*cking hell, ridiculous. She had a flat in Docklands for a while as well.
I think I need to hack into her bank account

In reply to John_Hat:

Apologies but I hate sillyness. Average London wage has nothing to do with a persons ability to either get or service a morgage nor does who they are employed by or there job title. You can big things up as much as you want but on a wage of £46k/yr I can't see you/them getting more than £200k. In London that gets you a small 1 bed flat within hearing distance of the M25.... if your lucky.

Haven't personally applied for a morgage in quite some time but I recently helped a relative buy and the bank affordability checks etc were utterly ferocious.

In reply to John_Hat:


Sorry but that's laughable, no bank would lend you 380k over 35 year with that income.

In reply to Lusk:

The reason I mention it was the place was horrible i.e. odd shaped rooms weird layout etc but in terms of % gain its just about beaten everything I can think of. Even if I'd known then what I know now I still wouldn't have bought it.

In reply to John_Hat:
FFIW I am training to be a lloyds broker so as you can imagine I am not on anywhere near the average London salary. Hence why rent takes 60% of my wage.
I could afford/ get a mortgage of around £120k based on what I pay in rent (assuming I use the bank of mum and dad to get a 50-75% deposit and thus a decent rate). You seem to forget that London should have to cater for everyone not just the elite. People need to train, work low paid jobs etc.
I've lost track of where this discussion was going.

In reply to Indy:

I dossed at hers when I got my first proper job in 83 and I remember she had a postcard on her noticeboard saying "I don't give a shit how much your house is worth".
After about 3 months of looking at overpriced hell holes I ended up getting a nice 2 bed Council flat 10 mins walk from Borough market for about £16/week. I wouldn't have lasted the 5 years down there otherwise.
Was glad to get back up North though.

In reply to La benya:


Yes, it SHOULD..... but it doesn't. Shrug.

In reply to Lusk:

Should have done a right to buy then let it out.... The rent would have paid for a mansion up north.

In reply to Lord_ash2000:

I think young people, or my friends anyway are pretty cynical of savings particularly. Yes, it's probably sensible but for many of us it's simply not an option. Check out this Guardian article: https://www.theguardian.com/world/2016/mar/07/revealed-30-year-economic-bet...

I think there's also a trend to experientialism, which is basically this trend for young people to travel, visit places, do things rather than save and be happy with a family and mortgage ("traditional values"). Consumerism also plays a massive part, the amount of advertising which is targeted at young people is sometimes overwhelming, confusing and simply unaffordable but never made out as so.

In reply to Jackwd:
While I'm sure the numbers, figures and statistics in the guardian article are correct it doesn't seem to reflect the experiences of many people.
The idea that present pensioners are well off while the young are struggling like never before seems more like a stereotype than actual fact.
The standard of living for all but a very few in the UK has risen in the past few decades like never before.
While tales of foodbanks and not being able to afford a house might grab the headlines there are pensioners alive today who can tell you what actual poverty is like.
The majority of people in the UK have always struggled through life, they always will.
That, of course, doesn't make it right.

In reply to baron:


Many younger people don't realise this. I've spent 8 years living in a very cheap 2-up, 2-down mid terrace. 35 years ago it had no central heating, open coal fires, no kitchen extension, an outhouse instead of an indoor toilet, single glazing, no loft insulation, no modern damp proof render system. It's almost unimaginable to me what it would have been like living there in the early 80s. Some of the neighbours did and still speak in awe of the day they got a grant to fit an indoor toilet.

I can't imagine anything being able to improve my standard of living by anything like as much as our neighbours experienced in the last few decades.

Edit: Even up to the 1960s that unimproved mid-terrace with its outhouse would have been aspirational for quite a few working families in the region.

In reply to wintertree:


the joys of peeling ice off the inside of the windows as a kid.

In reply to wintertree:

I agree, the standard 'standard of living' has increased, which is obviously a great thing however. Compared to modern day standards, many young people who're living in cities have to put up with ridiculous rents, damp (very very common), plumbing and electrical problems, pest infestations. It's 2016, not 1975. All this however is another topic entirely and i'll keep my money (what little I have) on cost of living being the most important factor in people not being able to save.

The cost of living has risen and risen, wages simply haven't kept up and the thrifty climbers demographic and younger generation suffer.

In reply to Jackwd:
I stand by to be corrected as my last real contact with the younger generation was visiting student's accommodation in Liverpool in the 1980's.
Your description of living consitions would have seemed luxury for my student mates.
The difference being that they revelled in their squalor and often wore it like a badge of honour. Money was for climbing gear, transport to the crag and beer, not necessarily in that order.
I believe things might have changed over the years and living conditions are now deemed to be as important.