Discussion
BoRED S2upid said:
So I read today that on average us brits are carrying £10k of personal debt not including mortgages. Some people must have tens of thousands for it to average out at £10k each or these figures are complete b
ks.
I suspect that's the average for people with unsecured debt (ie all those with no unsecured debt are not included).ks. At a quick glance,the nearest stats I can find are the Credit Action ones, which state:
Average consumer borrowing (including credit cards, motor and retail finance deals, overdrafts and unsecured loans) per UK adult was £4,231 in March.
And even that isn't clear whether it includes everyone, or just those with "consumer borrowing".
http://www.creditaction.org.uk/helpful-resources/d...
Edited by Ari on Wednesday 30th May 20:10
Oh, and just to throw in my ten cents.
Years ago if you wanted to borrow money for a car you put your best suit on, you went to your bank, and you sat in front of a proper bank manager and asked for £3K for a Cortina. He looked at all your figures, sucked air through his teeth and suggested he might be able to advance £1.5K for a Ford Escort.
Nowadays if you go into a bank and ask about a loan for £10K for a used Focus you'll have some spotty oik prod a few buttons on a computer, tell you how good your credit rating is, and suggest you borrow £20K for a new BMW.
Years ago if you wanted to borrow money for a car you put your best suit on, you went to your bank, and you sat in front of a proper bank manager and asked for £3K for a Cortina. He looked at all your figures, sucked air through his teeth and suggested he might be able to advance £1.5K for a Ford Escort.
Nowadays if you go into a bank and ask about a loan for £10K for a used Focus you'll have some spotty oik prod a few buttons on a computer, tell you how good your credit rating is, and suggest you borrow £20K for a new BMW.
Some people in this thread have no debt and are pleased (smug) about that which is great but the paradox, if you like is the more you earn the more leverage you have.
Mr X earns 200k a year, he would very much like a new Ferrari, does he want to buy it cash? no so he leverages....And so on.
The you have sensible people who aren't switching credit cards around narrowly avoiding disaster but are using the interest free cleverly to even make money from. .
Ok you lose your job and it all bets are off but at 200k a year you would be a fool not to have some sort of contingency plan.
Yes, the country is absolutely rammed full of feckless idiots who suddenly became 'rich' when their semi in Burnley suddenly 'doubled' in value and went out and bought Audi TT's and other ste they didn't need on the tick and their chickens are coming home to roost but they'll be back in 10 years or so under a different guise.
Yes I am incredibly please I am not one of these tools.
Then you have Uni Student debt which is about choice, go to uni, do a degree in some ste obscure manufactured course whilst getting pissed shagging and sleeping all day and leave with a 2.2 thinking you are Gordon Gekko then find you can't a job and then moan about a bundle of debt that YOU wanted and can pay back in a relatively relaxed way at low interest rates is crap too. Do an apprenticeship, get up at six every day and learn a skill the country needs.
Then you have the single mum who wants to work but can't do it around her childcare and has fallen on genuine hard times and has to have some level of debt to buy her kids clothes etc, is she stupid no, just unlucky or in a trap.
Good debt, bad debt and needless debt. Not just smug no debt.
Mr X earns 200k a year, he would very much like a new Ferrari, does he want to buy it cash? no so he leverages....And so on.
The you have sensible people who aren't switching credit cards around narrowly avoiding disaster but are using the interest free cleverly to even make money from. .
Ok you lose your job and it all bets are off but at 200k a year you would be a fool not to have some sort of contingency plan.
Yes, the country is absolutely rammed full of feckless idiots who suddenly became 'rich' when their semi in Burnley suddenly 'doubled' in value and went out and bought Audi TT's and other s
te they didn't need on the tick and their chickens are coming home to roost but they'll be back in 10 years or so under a different guise. Yes I am incredibly please I am not one of these tools.
Then you have Uni Student debt which is about choice, go to uni, do a degree in some s
te obscure manufactured course whilst getting pissed shagging and sleeping all day and leave with a 2.2 thinking you are Gordon Gekko then find you can't a job and then moan about a bundle of debt that YOU wanted and can pay back in a relatively relaxed way at low interest rates is crap too. Do an apprenticeship, get up at six every day and learn a skill the country needs.Then you have the single mum who wants to work but can't do it around her childcare and has fallen on genuine hard times and has to have some level of debt to buy her kids clothes etc, is she stupid no, just unlucky or in a trap.
Good debt, bad debt and needless debt. Not just smug no debt.
[quote=birdcage]
Yes, the country is absolutely rammed full of feckless idiots who suddenly became 'rich' when their semi in Burnley suddenly 'doubled' in value and went out and bought Audi TT's and other ste they didn't need on the tick and their chickens are coming home to roost but they'll be back in 10 years or so under a different guise.
[quote]
I agree, but how do you suppose they'll be back ?
Paying off existing debts and then borrowing again on the strength of having some equity in their house ?
Assuming the country doesn't go 100% tits up in the meantime.
Factor in the very real possibility of house prices tumbling (a very complex issue I know) and where else does the money come from to keep the wheels turning ?
People continuing to borrow on the strength of over-inflated house prices will just see a repeat of the mess we are currently in a few years further down the line
Yes, the country is absolutely rammed full of feckless idiots who suddenly became 'rich' when their semi in Burnley suddenly 'doubled' in value and went out and bought Audi TT's and other s
te they didn't need on the tick and their chickens are coming home to roost but they'll be back in 10 years or so under a different guise. [quote]
I agree, but how do you suppose they'll be back ?
Paying off existing debts and then borrowing again on the strength of having some equity in their house ?
Assuming the country doesn't go 100% tits up in the meantime.
Factor in the very real possibility of house prices tumbling (a very complex issue I know) and where else does the money come from to keep the wheels turning ?
People continuing to borrow on the strength of over-inflated house prices will just see a repeat of the mess we are currently in a few years further down the line
Edited by Red 4 on Wednesday 30th May 20:34
Lots of money borrowed here, doesn't phase me at all. Had a stunning wedding, lovely holidays, had everything I've ever wanted/needed and it's always paid on time. An ever better credit history means that I can always borrow as much as I like when I like.
Borrowing money is not a bad thing unless it doesn't he paid back.
Borrowing money is not a bad thing unless it doesn't he paid back.
I have no debt of any sort either and it is a comfort in these troubled times.
I never understood credit cards. Even when I was really struggling the thought of paying 25% interest on day to day stuff seemed insane. I used to have charge cards - paid off in full each month for small annual fee - but for years now I only use Debit cards. If the money isn't there you can't spend it.
My g/f's younger sister took a credit card in the boom times just to buy a handbag, she was 20 grand in debt within 3 years.
That seemed a pretty normal amount to owe at the time.
I never understood credit cards. Even when I was really struggling the thought of paying 25% interest on day to day stuff seemed insane. I used to have charge cards - paid off in full each month for small annual fee - but for years now I only use Debit cards. If the money isn't there you can't spend it.
My g/f's younger sister took a credit card in the boom times just to buy a handbag, she was 20 grand in debt within 3 years.
That seemed a pretty normal amount to owe at the time.
Debt can be good. ie borrow money to invest in something that will make you more money.
Student tuition fee debt on course that will get you a high paying job.
Trick is understanding this and managing it.
Without taking on and managing a lot of debt over the years my net worth would be much lower than it is.
Bare stats ie UK personal average debt mean very little without interpretation.
Student tuition fee debt on course that will get you a high paying job.
Trick is understanding this and managing it.
Without taking on and managing a lot of debt over the years my net worth would be much lower than it is.
Bare stats ie UK personal average debt mean very little without interpretation.
br d said:
I have no debt of any sort either and it is a comfort in these troubled times.
I never understood credit cards. Even when I was really struggling the thought of paying 25% interest on day to day stuff seemed insane. I used to have charge cards - paid off in full each month for small annual fee - but for years now I only use Debit cards. If the money isn't there you can't spend it.
My g/f's younger sister took a credit card in the boom times just to buy a handbag, she was 20 grand in debt within 3 years.
That seemed a pretty normal amount to owe at the time.
I have a credit card for fuel purchases. It means I can pay at pump without having to faff about with cash. I realise a debit card would do the same thing, but I've got a low limit (£250 - the bank want it higher - I don't) so if it got cloned it wouldn't be a massive inconvenience! Oh, and I get cashback on certain purchases! Gets paid off fully every month. Works well.I never understood credit cards. Even when I was really struggling the thought of paying 25% interest on day to day stuff seemed insane. I used to have charge cards - paid off in full each month for small annual fee - but for years now I only use Debit cards. If the money isn't there you can't spend it.
My g/f's younger sister took a credit card in the boom times just to buy a handbag, she was 20 grand in debt within 3 years.
That seemed a pretty normal amount to owe at the time.
thesyn said:
Bare stats ie UK personal average debt mean very little without interpretation.
The total is plenty big enough any way you look at it but the component parts are exactly as you say...the devil is in the detail of each person's circumstances. Debt can be very productive or very damaging.br d said:
I never understood credit cards. Even when I was really struggling the thought of paying 25% interest on day to day stuff seemed insane.
Credit cards can be very useful as you get a lot of free protection from the credit card company, for example if a supplier goes bust mid transaction then the credit card company will usually refund your money. In 30 years of using credit cards I've never paid a penny in either interest or fees, that can't be bad.
RYH64E said:
br d said:
I never understood credit cards. Even when I was really struggling the thought of paying 25% interest on day to day stuff seemed insane.
Credit cards can be very useful as you get a lot of free protection from the credit card company, for example if a supplier goes bust mid transaction then the credit card company will usually refund your money. In 30 years of using credit cards I've never paid a penny in either interest or fees, that can't be bad.
I have the same protection on my debit cards now, I think it's a reasonably recent development though.
A load of old rubbish if you ask me. So mortgage does not count as debt in the survey?
Person A has a 50K mortgage on a 500K house, person B has a £225K mortgage on a depreciating £200K house. B is on here saying loans are the spawn of the devil, 'I only have a mortgage'. Mortgage debt has the potential to be far worse than a 20K car loan, you have to look at the whole picture...
Person A has a 50K mortgage on a 500K house, person B has a £225K mortgage on a depreciating £200K house. B is on here saying loans are the spawn of the devil, 'I only have a mortgage'. Mortgage debt has the potential to be far worse than a 20K car loan, you have to look at the whole picture...
10k? Pffft. It's peanuts.
I just paid more than that for a campervan to sally down to my place on the Costa Blanca and a few sojourns around Europe in the summer. That's on top of my V6 Shogun, 2 x Yamaha Ypvs and Gixxer thou for zooming around.
AND, (shock horror) I'm a Northern pie-eater so for all you semi-detached dwelling, southern shandy-drinking poverty-strickens, jog on. 
I just paid more than that for a campervan to sally down to my place on the Costa Blanca and a few sojourns around Europe in the summer. That's on top of my V6 Shogun, 2 x Yamaha Ypvs and Gixxer thou for zooming around.
AND, (shock horror) I'm a Northern pie-eater so for all you semi-detached dwelling, southern shandy-drinking poverty-stricken
s, jog on. Butter Face said:
Lots of money borrowed here, doesn't phase me at all. Had a stunning wedding, lovely holidays, had everything I've ever wanted/needed and it's always paid on time. An ever better credit history means that I can always borrow as much as I like when I like.
Borrowing money is not a bad thing unless it doesn't he paid back.
Do you ever worry about what would happen if you lost your job? Borrowing money is not a bad thing unless it doesn't he paid back.
Eric Mc said:
Count me as a lucky one too then.
Or is it good financial management and realistic expectations rather than luck?
It tends to be personal choice, but the social environment definitely affects what people feel is normal, or acceptable. Only twenty years ago, my family viewed debt as a very bad thing. Mortgages were always viewed if fervently, but personal loans or overdrafts were to be avoided. Nowadays they seem not to bat an eyelid if someone in the street on 12k a year in a first Or is it good financial management and realistic expectations rather than luck?
job buys a 10k car, mainly on credit.
Puggit said:
Smug git here.
No debts apart from mortgages on our 2 houses (one in UK, one in France). If it all goes horribly wrong we can sell one house and live mortgage free in the other. :cheers:
You seem pretty sure of yourself....No debts apart from mortgages on our 2 houses (one in UK, one in France). If it all goes horribly wrong we can sell one house and live mortgage free in the other. :cheers:
unfortuantly, bad stuff sometimes happens in an uncontrolled fashion, and usually all at once.
For example - in the next couple of months, we could see the colapse of the Euro. This could lead to widespread finacial disruption in the banks. You might find your house in france is now unsellable, as the banks wont lend and then the values plunge. So your stuck with a mortgage on an unsellable house.
then you lose your job due to the finacial termoil.... and the UK economy follows the Euro. Then your stuck with two houses you cant sell because no one can raise a mortgage.
Whats the back out plan for this situation? How do you liquidate your depreciating assets when no one can borrow money?
Cant happen? I think we're closer to this situation than we've ever been, even in the blackest days over the last 5 years. At least with one home, you can sit it out, and the government will probably help you out to keep a roof over your head. But they ain't going to help you with a holiday home you cant sell.... If the greeks decide they wont continue with the pain being inflicted upon them, it could easily all unravel....
At least your property isn't in Spain. My mums retirement dream has turned into a living nightmare, Cant sell. She and my dad have lost everything they saved hard for all their lives, and their remaining equity is impossible to realease becasue no one can borrow and massive over supply.
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