Consumer debt hit an all-time high last year
Discussion
BlueHave said:
Can't say i'm at all surprised, plenty of millennials think money grows on trees and are up to their necks in debt.
Car from parents, rent from parents or house from parents so they have never really had to work hard for anything in their life so far.
If they miss a credit card payment it's ok because mummy and daddy will pick up the tab.
Not a great way to live as the safety net won't always be there.
+1Car from parents, rent from parents or house from parents so they have never really had to work hard for anything in their life so far.
If they miss a credit card payment it's ok because mummy and daddy will pick up the tab.
Not a great way to live as the safety net won't always be there.
I guess living within your means just is'nt trendy anymore.
That's why the Bank of England have set rates so low, as a short term (well...initially at least) measure to encourage people to take on debt and support consumption within the economy. Real wages are currently falling in the UK which could adversely impact GDP growth which itself is only slightly positive.
I've seen little focus from the government on economic issues.
I've seen little focus from the government on economic issues.
BlueHave said:
Can't say i'm at all surprised, plenty of millennials think money grows on trees and are up to their necks in debt.
Exactly, and income in the 22 to 30 year old age bracket is about 8% lower than prior to the financial crisis (2008) they've never had the disposable income to begin with.speedy_thrills said:
That's why the Bank of England have set rates so low, as a short term (well...initially at least) measure to encourage people to take on debt and support consumption within the economy. Real wages are currently falling in the UK which could adversely impact GDP growth which itself is only slightly positive.
I've seen little focus from the government on economic issues.
The ONLY economic issue the government/BoE focus on is propping up and inflating house prices, it's the only thing they've got any semblance of control over thanks to ZIRP, QE, HTB, FLS etc.... and the only thing they can do to create an illusory economic feelgood factor amongst the masses.I've seen little focus from the government on economic issues.
BlueHave said:
Can't say i'm at all surprised, plenty of millennials think money grows on trees and are up to their necks in debt.
Car from parents, rent from parents or house from parents so they have never really had to work hard for anything in their life so far.
If they miss a credit card payment it's ok because mummy and daddy will pick up the tab.
Not a great way to live as the safety net won't always be there.
The vast majority of millennials do not have cars and houses handed to them by parents.Car from parents, rent from parents or house from parents so they have never really had to work hard for anything in their life so far.
If they miss a credit card payment it's ok because mummy and daddy will pick up the tab.
Not a great way to live as the safety net won't always be there.
The vast majority are paying eye-watering rents to baby boomers who bought houses and flats with unearned, untaxed capital gains.
As a 'baby boomer' in my younger days we had no such thing as debt, other than a mortgage perhaps. If you wanted a new tele it was down to Radio Rentals to hire one! Or maybe put down a deposit and take on HP (hire purchase). New cars were few and far between for young people back in the 60s and 70's, most were old bangers held together with fibreglass patches or pudding. No such thing as credit cards or monster loans because you just had to have something NOW,
Better days? Well better than the 40s and 50s.
Better days? Well better than the 40s and 50s.
V88Dicky said:
BlueHave said:
Can't say i'm at all surprised, plenty of millennials think money grows on trees and are up to their necks in debt.
Car from parents, rent from parents or house from parents so they have never really had to work hard for anything in their life so far.
If they miss a credit card payment it's ok because mummy and daddy will pick up the tab.
Not a great way to live as the safety net won't always be there.
+1Car from parents, rent from parents or house from parents so they have never really had to work hard for anything in their life so far.
If they miss a credit card payment it's ok because mummy and daddy will pick up the tab.
Not a great way to live as the safety net won't always be there.
I guess living within your means just is'nt trendy anymore.
Tell me: what difference does it make if you buy something now on interest free credit and pay it off over 30 months or you save up over 30 months, earning negligible interest, and buy it at the end of that time - apart from the obvious that you get to use that item 2 and a half years earlier?!
Another way to look at it is that with the current economic situation, there's a very good reason that assets are rising in price quickly - cash held in the bank is generally losing you money in real terms. So, if you're going to lose money by being traditionally "frugal", you might as well spend it and at least lose it on depreciation of an asset that you can actually benefit from.
crankedup said:
As a 'baby boomer' in my younger days we had no such thing as debt, other than a mortgage perhaps. If you wanted a new tele it was down to Radio Rentals to hire one! Or maybe put down a deposit and take on HP (hire purchase). New cars were few and far between for young people back in the 60s and 70's, most were old bangers held together with fibreglass patches or pudding. No such thing as credit cards or monster loans because you just had to have something NOW,
Better days? Well better than the 40s and 50s.
Eh?Better days? Well better than the 40s and 50s.
youngsyr said:
The youth of today, eh?
Tell me: what difference does it make if you buy something now on interest free credit and pay it off over 30 months or you save up over 30 months, earning negligible interest, and buy it at the end of that time - apart from the obvious that you get to use that item 2 and a half years earlier?!
In the second example you're buying it with money you already have. Tell me: what difference does it make if you buy something now on interest free credit and pay it off over 30 months or you save up over 30 months, earning negligible interest, and buy it at the end of that time - apart from the obvious that you get to use that item 2 and a half years earlier?!
In the first you're buying it with money that you hope you will have...
Surprising it needs explaining really, but maybe this is the root of the problem.
skahigh said:
crankedup said:
As a 'baby boomer' in my younger days we had no such thing as debt, other than a mortgage perhaps. If you wanted a new tele it was down to Radio Rentals to hire one! Or maybe put down a deposit and take on HP (hire purchase). New cars were few and far between for young people back in the 60s and 70's, most were old bangers held together with fibreglass patches or pudding. No such thing as credit cards or monster loans because you just had to have something NOW,
Better days? Well better than the 40s and 50s.
Eh?Better days? Well better than the 40s and 50s.
Living on Tick
Living on the never never
Hire Purchase
Ignore the source: http://www.worldsocialism.org/spgb/socialist-stand...
the key quote is valid:
article said:
Robert Roberts’ The Classic Slum describes life in Salford in the first part of last century. The pawnshop was an essential part of the local community; many people were dependent on the short-term loans offered, with women often pawning the family’s ‘best’ clothes on Monday until the following Saturday. There was a social hierarchy among the working class, with skilled workers at the top, and various ‘disreputable’ individuals at the bottom; and position ‘was judged not only by what one possessed but also by what one pawned’. True destitution meant pawning not just clothes but also pots and rugs, and finally not being able to redeem what had been left with the broker. The interest charged was usually a penny in the shilling per week; sky-high, but less than the moneylender, who charged threepence in the shilling per week.
Debt and loan financing was endemic. It didn't resemble the whizzy world of PAYG loans but was essentially the same dynamic. Ironically the things that were largely responsible for that world gradually fading away, was the Council House Right to Buy schemes, and the massive explosion in credit cards from the early eighties. The Boomers weren't therefore fiscally more prudent: they were able to tap entirely new lines of credit, and equity that previous generations were unable to.
Typical PH-it's all young peoples fault regardless of any other factors.
I'm fairly sure my generation could go to mars, make nuclear fusion generation viable and solve world hunger and most of the posters on here would still be tutting and rolling their eyes and the 'entitlement' cultures they seem to think exists.
I'm fairly sure my generation could go to mars, make nuclear fusion generation viable and solve world hunger and most of the posters on here would still be tutting and rolling their eyes and the 'entitlement' cultures they seem to think exists.
Ari said:
youngsyr said:
The youth of today, eh?
Tell me: what difference does it make if you buy something now on interest free credit and pay it off over 30 months or you save up over 30 months, earning negligible interest, and buy it at the end of that time - apart from the obvious that you get to use that item 2 and a half years earlier?!
In the second example you're buying it with money you already have. Tell me: what difference does it make if you buy something now on interest free credit and pay it off over 30 months or you save up over 30 months, earning negligible interest, and buy it at the end of that time - apart from the obvious that you get to use that item 2 and a half years earlier?!
In the first you're buying it with money that you hope you will have...
Surprising it needs explaining really, but maybe this is the root of the problem.
But as you're arguing against with a specific scenario, let me counter with another: it's currently more than possible to borrow at 0% to extend your house and then see the value of your house increase above and beyond the value of your debt, so in fact you earn money on your debt.
The fact is, the current economic situation is vastly different to what we've seen before, so applying traditional criticisms to it is not particularly useful.
Ari said:
youngsyr said:
The youth of today, eh?
Tell me: what difference does it make if you buy something now on interest free credit and pay it off over 30 months or you save up over 30 months, earning negligible interest, and buy it at the end of that time - apart from the obvious that you get to use that item 2 and a half years earlier?!
In the second example you're buying it with money you already have. Tell me: what difference does it make if you buy something now on interest free credit and pay it off over 30 months or you save up over 30 months, earning negligible interest, and buy it at the end of that time - apart from the obvious that you get to use that item 2 and a half years earlier?!
In the first you're buying it with money that you hope you will have...
Surprising it needs explaining really, but maybe this is the root of the problem.
mike74 said:
speedy_thrills said:
That's why the Bank of England have set rates so low, as a short term (well...initially at least) measure to encourage people to take on debt and support consumption within the economy. Real wages are currently falling in the UK which could adversely impact GDP growth which itself is only slightly positive. I've seen little focus from the government on economic issues.
The ONLY economic issue the government/BoE focus on is propping up and inflating house prices, it's the only thing they've got any semblance of control over thanks to ZIRP, QE, HTB, FLS etc.... and the only thing they can do to create an illusory economic feelgood factor amongst the masses.Bank of England can remediate short term problems by kicking the can down the road but don't have the macro-prudential tools to do the governments job for them and restructure the economy. That's down to wider society through the conduit of government who at this point aren't in any hurry to embrace economic reform.
Edited by speedy_thrills on Wednesday 28th June 13:35
youngsyr said:
Obviously only a problem if your circumstances unexpectedly change within the next 30 months and even then you still have the value of the asset to sell.
But as you're arguing against with a specific scenario, let me counter with another: it's currently more than possible to borrow at 0% to extend your house and then see the value of your house increase above and the value of your debt, so in fact you earn money on your debt.
The fact is, the current economic situation is vastly different to what we've seen before, so applying traditional criticisms to it is not particularly useful.
Borrowing to improve your house which is likely (but not guaranteed) to increase in value over the long term can make sense.But as you're arguing against with a specific scenario, let me counter with another: it's currently more than possible to borrow at 0% to extend your house and then see the value of your house increase above and the value of your debt, so in fact you earn money on your debt.
The fact is, the current economic situation is vastly different to what we've seen before, so applying traditional criticisms to it is not particularly useful.
Borrowing to purchase an asset which is likely to depreciate makes much less sense!
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