Personal Debt


(James Burton) #1

Today at the Conservative Party Conference it is reported that the PM will call on Britons to clear their debts. This is going to be one heck of a challenge as the average person in the UK is reported to be £33,000 in debt, and this is just personal debt like credit cards and over drafts (Not mortgages).



Indeed the debt in the UK is so large that it accounts for a third of all personal debt in Europe, that takes some beating. So how did we get into this mad situation? how have we become such a large consumer of all things that we can’t afford?



Its very easy to blame the banks, they are the ones who shoved cheap loans and credit deals down our throats on an almost daily basis. I remember once as a kid when my parents wanted to get a loan, they had to go for a meeting with the bank manager (he said no). Fast forward a few years and a quick phone call or a couple of clicks on the PC and ‘free’ money was yours. The last time I moved house, we arrange a sizable mortgage increase with just one ten minute phone call.



For all their questionable practices I don’t blame the banks. I have no debt, not a pennny, and considering I have huge twin related costs at the moment I think I am doing well. I have always been of the opinion that you save and then buy, for one this makes the purchase far more wanted and special and for another you don’t need to pay extra to the banks in terms of interest (Im tight). I own a credit card, though this is for security (all purchases over £100 are insured) and I pay it off the same day as I buy something, plus I get cash back at the end of the year (I am their worst kind of customer).



So I guess I am saying that I blame the individuals, they have made the choice to accept the easy credit and then get into debt. Of course their is the exception and especially now there are many people forced into debt due to job loss, family breakups etc, but in fairness the vast majority of debt is built upon people wanting everything now.



I remember when my younger brother was 20, he was already in debt to the tune of £20k. Oh how he loved showing off the latest designer top he had brought, comparing his designer jeans with my Primark ones. There was no shame in his debt, it was almost a thing to boast about. Many times I would hear people happily comparing their debt levels, and when I mentioned how much in savings I had I was seen as some boring sod.



So back the the PM and his challenge, I think he is going to have a tough job changing attitudes and mindsets. He has to compete with years of a Labour government who built all its success on debt in a world that grew on the never never. Its amazing to think that next time you see a homeless guy in the street begging for money he is likely to be richer than the vast majority of people passing him.



Never never really does exsist.


(Jane Williamson) #2

That’s what working for a bakery does for you.


(Alison Plummer) #3

No but it is Wednesday, lots more mums (and dads) free to sort out stuff without it taking over your Saturdays.


(Andrew Hearne) #4

I’m with both of you on this one and can’t stand the way the UK has gone (and large town france too for that matter!) unfortunately the vast majority of people don’t ever stop to think about life and what they’re actually doing and the consequences/sustainability. “everyonbe else’s doing it so I will to”. they’re all bloody made in my book. if i can’t afford it (haven’t got the cash) then I can’t have it or I’ll have to wait until I can buy it with my own hard earned cash. I won’t go on as I think we’re all already on the same wave length here :wink:


(Jane Williamson) #5

I really agree with you James.
We never had any debt, other than our mortgage, and we can remember the time when we were paying 15%, with two small children and wondering what we would do to pay the increase. We were very lucky as my husband received a promotion and a pay increase, so we were able to manage. The second time that mortgages went up we carried on paying at the increased rate, so we were able to get rid of our mortgage earlier than we had hoped.
We didn’t go on fancy holidays, or spend money on designer clothes.
We were encouraged to save, but where has that got us. On coming to France we were advised to take out an assurance vie, which we are trying not to touch for the time being. Our (private) pension, because Jim worked for himself and had to pay all the contributions himself, has actually decreased in value due to the fall in the stock exchange. This is all due to the fantastic spending spree which both governments and private individuals have undertaken and which we avoided like the plague. Like you, our credit cards were to provide protection and so that we would have only one payment at the end of each month.
We have received no boosts due to inheritances and everything we have, is the result of a lifetime’s hard work and initiative.
This crisis has to be shared by everyone, and those who are complaining that their government pension arrangements have change, need to realise that they are not alone, but that no-one is there to bail out people with private or occupational pensions.
The spending spree has come home with a jolt and reality is a bitter pill to swallow.