Consumer debt hit an all-time high last year
Discussion
Hayek said:
Does this help? Think it's referring to the right thing going under.
https://en.wikipedia.org/wiki/Bankruptcy_in_the_Un...
Not much help as it only shows up to around 2007 from what I can see on my phone. https://en.wikipedia.org/wiki/Bankruptcy_in_the_Un...
The statement I'm questing is that more people are going under now than ever, as I can't find any source to back that up.
I also suspect that bankruptcies packed in the wake of the financial crisis and have since declined.
Why would the BOE raise the issues that we are discussing if those issues were not real a
no threatening the economy as a whole?
When the credit boom is reaching worrying levels of overal debt that credit must be controlled.
I do agree that actual bankruptcies occurring due to the financial crisis have likely receded in terms of numbers. However, that crisis was the one that lessons should have been learnt from, the current credit boom shows signs from both lender and borrower that those lessons are being ignored. Hence the BOE warnings.
no threatening the economy as a whole?
When the credit boom is reaching worrying levels of overal debt that credit must be controlled.
I do agree that actual bankruptcies occurring due to the financial crisis have likely receded in terms of numbers. However, that crisis was the one that lessons should have been learnt from, the current credit boom shows signs from both lender and borrower that those lessons are being ignored. Hence the BOE warnings.
Edited by crankedup on Thursday 29th June 13:51
crankedup said:
Why would the BOE raise the issues that we are discussing if those issues were not real a
no threatening the economy as a whole?
When the credit boom is reaching worrying levels of overal debt that credit must be controlled.
I do agree that actual bankruptcies occurring due to the financial crisis have likely receded in terms of numbers. However, that crisis was the one that lessons should have been learnt from, the current credit boom shows signs from both lender and borrower that those lessons are being ignored. Hence the BOE warnings.
Who knows what the BoE's agenda is - that's why I'm asking for solid facts to back up some of the conclusions being thrown around on here.no threatening the economy as a whole?
When the credit boom is reaching worrying levels of overal debt that credit must be controlled.
I do agree that actual bankruptcies occurring due to the financial crisis have likely receded in terms of numbers. However, that crisis was the one that lessons should have been learnt from, the current credit boom shows signs from both lender and borrower that those lessons are being ignored. Hence the BOE warnings.
Edited by crankedup on Thursday 29th June 13:51
The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
Seems to me the interest rate "lever" has been replaced with talking about the interest rate lever. They mention raising rates and it briefly has the effect of actually raising rates. Seems very unlikely that they'd actually raise rates.. a low(er) currency would seem to be beneficial with Brexit etc.
You could argue that the 0 to 0.5% move in the Countercyclical Capital Buffer rate, and the likelihood of a 0.5% to 1% increase in addition before YE is priming the lenders for a rate rise.
Increase your buffers on unsecured / auto lending incase rates go up and people don't have enough funds to pay the mortgage and the other lending down...
Increase your buffers on unsecured / auto lending incase rates go up and people don't have enough funds to pay the mortgage and the other lending down...
Henners said:
You could argue that the 0 to 0.5% move in the Countercyclical Capital Buffer rate, and the likelihood of a 0.5% to 1% increase in addition before YE is priming the lenders for a rate rise.
Increase your buffers on unsecured / auto lending incase rates go up and people don't have enough funds to pay the mortgage and the other lending down...
Precisely the risk that we are discussing and the BOE is flagging up, although they have been crying wolf for 18 months or more already. We know that personal lending is getting peaky, any interest rate rise to rein in borrowing is bound to hurt those that have stretched themselves. Increase your buffers on unsecured / auto lending incase rates go up and people don't have enough funds to pay the mortgage and the other lending down...
youngsyr said:
Who knows what the BoE's agenda is - that's why I'm asking for solid facts to back up some of the conclusions being thrown around on here.
The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
The UKs personal debt excluding mortgages is at its highest level ever and this was accumulated mostly at the lowest interest levels ever and you think that raising interest rates will not cause problems to millions of people?The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
In 2009 after the last shake up over 134,000 personal bankruptcies happened in the UK and there was less personal debt than there is now!
When interest rates go up usually jobs are lost causing a double whammy!
This mythical 0% credit card with a £10k facility,how many people do you think would get accepted for that level of interest free credit and could you give some real data for that please?
crankedup said:
Henners said:
You could argue that the 0 to 0.5% move in the Countercyclical Capital Buffer rate, and the likelihood of a 0.5% to 1% increase in addition before YE is priming the lenders for a rate rise.
Increase your buffers on unsecured / auto lending incase rates go up and people don't have enough funds to pay the mortgage and the other lending down...
Precisely the risk that we are discussing and the BOE is flagging up, although they have been crying wolf for 18 months or more already. We know that personal lending is getting peaky, any interest rate rise to rein in borrowing is bound to hurt those that have stretched themselves. Increase your buffers on unsecured / auto lending incase rates go up and people don't have enough funds to pay the mortgage and the other lending down...
The prevailing opinion on here seems to be "millions", I suspect it's much lower. Just because consumer credit is at an all time high, it doesn't necessarily follow that people are stretched. Indeed, with the cost of borrowing actually being negative in real terms at the moment, it makes perfect sense to buy assets on credit and keep money in the bank.
With house prices (and many other assets) increasing far ahead of inflation, it can make a lot of sense to borrow money to purchase these assets and actually earn money on the debt. To give a personal example, my savings account provider is actually helping me pay off my mortgage. It has also made far more sense for me to pay into my pension over the past 5 years than to pay off my mortgage.
Granfondo said:
youngsyr said:
Who knows what the BoE's agenda is - that's why I'm asking for solid facts to back up some of the conclusions being thrown around on here.
The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
The UKs personal debt excluding mortgages is at its highest level ever and this was accumulated mostly at the lowest interest levels ever and you think that raising interest rates will not cause problems to millions of people?The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
Granfondo said:
In 2009 after the last shake up over 134,000 personal bankruptcies happened in the UK and there was less personal debt than there is now!
When interest rates go up usually jobs are lost causing a double whammy!
The financial crisis aftermath in 2009 had nothing to do with interest rates!, in fact interest rates plummeted from 5% in 2008 to 0.5% in 2009, so are you arguing that a fall in interest rates actually creates more bankruptcies?!When interest rates go up usually jobs are lost causing a double whammy!
Granfondo said:
This mythical 0% credit card with a £10k facility,how many people do you think would get accepted for that level of interest free credit and could you give some real data for that please?
Mythical?! Here's a list of over 10 providers offering 0% on purchases credit cards and these are just the "best" providers, there are many more. Doesn't exactly meet the definition of mythical, does it?!http://www.moneysavingexpert.com/credit-cards/best...
Of course, only the lenders themselves know how many people they are lending to and at what rates, but given the long list of cards available and that I receive monthly unsolicited mail offering me them, I think it's a fair assumption that they're prevalent.
youngsyr said:
Granfondo said:
youngsyr said:
Who knows what the BoE's agenda is - that's why I'm asking for solid facts to back up some of the conclusions being thrown around on here.
The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
The UKs personal debt excluding mortgages is at its highest level ever and this was accumulated mostly at the lowest interest levels ever and you think that raising interest rates will not cause problems to millions of people?The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
Granfondo said:
In 2009 after the last shake up over 134,000 personal bankruptcies happened in the UK and there was less personal debt than there is now!
When interest rates go up usually jobs are lost causing a double whammy!
The financial crisis aftermath in 2009 had nothing to do with interest rates!, in fact interest rates plummeted from 5% in 2008 to 0.5% in 2009, so are you arguing that a fall in interest rates actually creates more bankruptcies?!When interest rates go up usually jobs are lost causing a double whammy!
Granfondo said:
This mythical 0% credit card with a £10k facility,how many people do you think would get accepted for that level of interest free credit and could you give some real data for that please?
Mythical?! Here's a list of over 10 providers offering 0% on purchases credit cards and these are just the "best" providers, there are many more. Doesn't exactly meet the definition of mythical, does it?!http://www.moneysavingexpert.com/credit-cards/best...
Of course, only the lenders themselves know how many people they are lending to and at what rates, but given the long list of cards available and that I receive monthly unsolicited mail offering me them, I think it's a fair assumption that they're prevalent.
2)2009 Had lower interest rates but the borrowing were probably on fixed terms so made no difference to the borrowers with previous debt!
3)where is the data to support you can get £10k facility @0%?
Edited by Granfondo on Thursday 29th June 16:15
Granfondo said:
youngsyr said:
Granfondo said:
youngsyr said:
Who knows what the BoE's agenda is - that's why I'm asking for solid facts to back up some of the conclusions being thrown around on here.
The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
The UKs personal debt excluding mortgages is at its highest level ever and this was accumulated mostly at the lowest interest levels ever and you think that raising interest rates will not cause problems to millions of people?The fact that no-one can show me any analysis of the impact of an X% interest rise on the population's solvency, or indeed any current numbers for the bankruptcy level makes me question whether the impact is as great as many seem to believe.
On top of that, I can see that we're in a completely new situation of zero percent interest rates and have been for over 8 years now. Applying traditional analysis using examples from the 70s and 80s seems ridiculous to me.
Granfondo said:
In 2009 after the last shake up over 134,000 personal bankruptcies happened in the UK and there was less personal debt than there is now!
When interest rates go up usually jobs are lost causing a double whammy!
The financial crisis aftermath in 2009 had nothing to do with interest rates!, in fact interest rates plummeted from 5% in 2008 to 0.5% in 2009, so are you arguing that a fall in interest rates actually creates more bankruptcies?!When interest rates go up usually jobs are lost causing a double whammy!
Granfondo said:
This mythical 0% credit card with a £10k facility,how many people do you think would get accepted for that level of interest free credit and could you give some real data for that please?
Mythical?! Here's a list of over 10 providers offering 0% on purchases credit cards and these are just the "best" providers, there are many more. Doesn't exactly meet the definition of mythical, does it?!http://www.moneysavingexpert.com/credit-cards/best...
Of course, only the lenders themselves know how many people they are lending to and at what rates, but given the long list of cards available and that I receive monthly unsolicited mail offering me them, I think it's a fair assumption that they're prevalent.
2)2009 Had lower interest rates but the borrowing were probably on fixed terms so made no difference to the borrowers with previous debt!
3)where is the data to support you can get £10k facility @0%?
Edited by Granfondo on Thursday 29th June 16:15
http://www.moneysavingexpert.com/loans/cheap-perso...
2) So which is it - interest rates caused high rates of bankruptcies in 2009 or not? If not, why is it even relevant?
3) You know full well that the data for the level of facilities on 0% cards is not publically available, so where is your evidence that those levels of facilities aren't available? Absence of evidence is not evidence of absence.
youngsyr said:
1) Apologies, misread the statement on mortgages. The same still applies though - there are plenty of fixed rate non mortgage deals about.
2) So which is it - interest rates caused high rates of bankruptcies in 2009 or not? If not, why is it even relevant?
3) You know full well that the data for the level of facilities on 0% cards is not publically available, so where is your evidence that those levels of facilities aren't available? Absence of evidence is not evidence of absence.
1)The problem with them being fixed is that they could not benifit from the rate reduction.2) So which is it - interest rates caused high rates of bankruptcies in 2009 or not? If not, why is it even relevant?
3) You know full well that the data for the level of facilities on 0% cards is not publically available, so where is your evidence that those levels of facilities aren't available? Absence of evidence is not evidence of absence.
2)You obviously think interest rates do not affect people's finances so we will have to disagree!
3)Right back at ya!
Granfondo said:
youngsyr said:
1) Apologies, misread the statement on mortgages. The same still applies though - there are plenty of fixed rate non mortgage deals about.
2) So which is it - interest rates caused high rates of bankruptcies in 2009 or not? If not, why is it even relevant?
3) You know full well that the data for the level of facilities on 0% cards is not publically available, so where is your evidence that those levels of facilities aren't available? Absence of evidence is not evidence of absence.
1)The problem with them being fixed is that they could not benifit from the rate reduction.2) So which is it - interest rates caused high rates of bankruptcies in 2009 or not? If not, why is it even relevant?
3) You know full well that the data for the level of facilities on 0% cards is not publically available, so where is your evidence that those levels of facilities aren't available? Absence of evidence is not evidence of absence.
2)You obviously think interest rates do not affect people's finances so we will have to disagree!
3)Right back at ya!
2) Your argument appeared to be that an interest rate cut caused record numbers of bankruptcies, I'm just trying to understand your argument.
3) I've shown that you're wrong in assuming 0% interest rate cards are "Mythical", not sure what else you're looking for?
youngsyr said:
1) Why does that mean that an interest rate rise will cause significant numbers of people problems.
2) Your argument appeared to be that an interest rate cut caused record numbers of bankruptcies, I'm just trying to understand your argument.
3) I've shown that you're wrong in assuming 0% interest rate cards are "Mythical", not sure what else you're looking for?
1)You are saying it won't then?2) Your argument appeared to be that an interest rate cut caused record numbers of bankruptcies, I'm just trying to understand your argument.
3) I've shown that you're wrong in assuming 0% interest rate cards are "Mythical", not sure what else you're looking for?
2)Not at all,I said they could not get the benefit of the reduced rate!
3)the cards themselves may not be mythical but trying to get a £10k limit will be for many who try!
Granfondo said:
youngsyr said:
1) Why does that mean that an interest rate rise will cause significant numbers of people problems.
2) Your argument appeared to be that an interest rate cut caused record numbers of bankruptcies, I'm just trying to understand your argument.
3) I've shown that you're wrong in assuming 0% interest rate cards are "Mythical", not sure what else you're looking for?
1)You are saying it won't then?2) Your argument appeared to be that an interest rate cut caused record numbers of bankruptcies, I'm just trying to understand your argument.
3) I've shown that you're wrong in assuming 0% interest rate cards are "Mythical", not sure what else you're looking for?
2)Not at all,I said they could not get the benefit of the reduced rate!
3)the cards themselves may not be mythical but trying to get a £10k limit will be for many who try!
2) How is that relevant to this dicussion?
3) What is the relevance of your arbitrary £10k limit - it seems that you're implying that if you can't get £10k on one card, then these cards have no impact on the discussion of the nation's sensitivity to an interest rate rise. I completely disagree.
youngsyr said:
1) I'm saying no-one has shown me any evidence that it will, despite stating it as universally accepted and misunderstanding how interest rate rises impact on monthly repayments.
2) How is that relevant to this dicussion?
3) What is the relevance of your arbitrary £10k limit - it seems that you're implying that if you can't get £10k on one card, then these cards have no impact on the discussion of the nation's sensitivity to an interest rate rise. I completely disagree.
1)overdrafts,SVR mortgages,people trying to remortgage after a fixed term,people coming to the end of a PCP,PCH,unaothorised bank borrowing all impact on monthly payments!2) How is that relevant to this dicussion?
3) What is the relevance of your arbitrary £10k limit - it seems that you're implying that if you can't get £10k on one card, then these cards have no impact on the discussion of the nation's sensitivity to an interest rate rise. I completely disagree.
2)You were implying that rate cuts cause bankruptcy.
3)I was using £10k because you used that amount in the mythical car for work example!
Granfondo said:
youngsyr said:
1) I'm saying no-one has shown me any evidence that it will, despite stating it as universally accepted and misunderstanding how interest rate rises impact on monthly repayments.
2) How is that relevant to this dicussion?
3) What is the relevance of your arbitrary £10k limit - it seems that you're implying that if you can't get £10k on one card, then these cards have no impact on the discussion of the nation's sensitivity to an interest rate rise. I completely disagree.
1)overdrafts,SVR mortgages,people trying to remortgage after a fixed term,people coming to the end of a PCP,PCH,unaothorised bank borrowing all impact on monthly payments!2) How is that relevant to this dicussion?
3) What is the relevance of your arbitrary £10k limit - it seems that you're implying that if you can't get £10k on one card, then these cards have no impact on the discussion of the nation's sensitivity to an interest rate rise. I completely disagree.
2)You were implying that rate cuts cause bankruptcy.
3)I was using £10k because you used that amount in the mythical car for work example!
2) I wasn't implying anything, you brought up 2009 as having record bankruptcies in a discussion about an interest rate rise "screwing millions", I pointed out that 2009 saw interest rate cuts and asked you what your point is - you still haven't clarified.
3) So again, what's your point - are you saying that fixed term lending at 0% doesn't exist?
youngsyr said:
1) Thanks for the list. What's the level of debt across those types and how much impact would a 1% increase in interest rates have?
2) I wasn't implying anything, you brought up 2009 as having record bankruptcies in a discussion about an interest rate rise "screwing millions", I pointed out that 2009 saw interest rate cuts and asked you what your point is - you still haven't clarified.
3) So again, what's your point - are you saying that fixed term lending at 0% doesn't exist?
1)Those figures aren't readily available to the public but the "absence of evidence isn't evidence of absence or some other drivel!2) I wasn't implying anything, you brought up 2009 as having record bankruptcies in a discussion about an interest rate rise "screwing millions", I pointed out that 2009 saw interest rate cuts and asked you what your point is - you still haven't clarified.
3) So again, what's your point - are you saying that fixed term lending at 0% doesn't exist?
2)You were looking for data about bankruptcies and I gave them and you extrapolated from that that interest rate reduction causes bankruptcy!
3)lots of people believe the Loch Ness monster exists but try catching it!
youngsyr said:
1) Thanks for the list. What's the level of debt across those types and how much impact would a 1% increase in interest rates have?
2) I wasn't implying anything, you brought up 2009 as having record bankruptcies in a discussion about an interest rate rise "screwing millions", I pointed out that 2009 saw interest rate cuts and asked you what your point is - you still haven't clarified.
3) So again, what's your point - are you saying that fixed term lending at 0% doesn't exist?
1)Those figures aren't readily available to the public but the "absence of evidence isn't evidence of absence or some other drivel!2) I wasn't implying anything, you brought up 2009 as having record bankruptcies in a discussion about an interest rate rise "screwing millions", I pointed out that 2009 saw interest rate cuts and asked you what your point is - you still haven't clarified.
3) So again, what's your point - are you saying that fixed term lending at 0% doesn't exist?
2)You were looking for data about bankruptcies and I gave them and you extrapolated from that that interest rate reduction causes bankruptcy!
"Screwed"???
3)lots of people believe the Loch Ness monster exists but try catching it!
Granfondo said:
youngsyr said:
1) Thanks for the list. What's the level of debt across those types and how much impact would a 1% increase in interest rates have?
2) I wasn't implying anything, you brought up 2009 as having record bankruptcies in a discussion about an interest rate rise "screwing millions", I pointed out that 2009 saw interest rate cuts and asked you what your point is - you still haven't clarified.
3) So again, what's your point - are you saying that fixed term lending at 0% doesn't exist?
1)Those figures aren't readily available to the public but the "absence of evidence isn't evidence of absence or some other drivel!2) I wasn't implying anything, you brought up 2009 as having record bankruptcies in a discussion about an interest rate rise "screwing millions", I pointed out that 2009 saw interest rate cuts and asked you what your point is - you still haven't clarified.
3) So again, what's your point - are you saying that fixed term lending at 0% doesn't exist?
2)You were looking for data about bankruptcies and I gave them and you extrapolated from that that interest rate reduction causes bankruptcy!
"Screwed"???
3)lots of people believe the Loch Ness monster exists but try catching it!
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