Cost of living squeeze in 2022

[stongle]

Welshbeef said:

Why isn’t that individual using his 25% tax free lump sum from his pension?

Also maybe his/her plans were to downgrade - or maybe just bad luck and lived the high life.

Nothing to worry really

The average UK pension pot is 62,000 at age 65. So your 25% is a about 13k.....

Nothing to worry about? Errr, wrong.

As for your theory that declining house prices are only an issue when moving. You couldn't be more wrong if you tried. As already pointed it, it impacts those mortgaging; but worse it stops other big ticket purchases. People make purchase decisions based on BOTH disposable cash AND book value wealth. If you take a 30% write down on your biggest assets (illiquid they maybe); you won't be running cash out the door on other stuff. Consumption slows, the economy goes into a recession.

Swap rates are inverted, so no one with a brain thinks this the start of some great unwinding; but a temporary inflationary pressure - before things return to more normalised (low) levels.

[Teebs]

Welshbeef said:

I just looked online now - randomly selected Lloyds and piped in our details and plumped for a 10 year fixes. Fixed rates were 2.23% to 2.46%.

As such anyone needing it now or within 6 months loads of choice and it’s cheap. Or anyone on variable rate.

Everyone knows what may be coming so if your not fixing… your either billy big balls confident dabbling in the markets or not aware (so tell your friends to save them cash) or utterly naive

2.23% might be cheap but not for those who are coming to the end of a 1.X% fixed rate.

[Welshbeef]

loafer123 said:

Welshbeef said:

I just went into the Lloyds bank website and put in my details “pretending” I was going to remortgage just to see the rates. Those numbers I quoted are what the website indicated.

Absolutely, but your post indicated you thought that Lloyds were getting it wrong and that, over the next 10 years, rates would be much higher.

My point is that the swaps market, on which this rate is based, is the current experts view on what rates are likely to be over the next 10 years.

No they have potentially bought in credit at this % (well less so they have margin) once they sell out then will buy more at current rates.

[bitchstewie]

stongle said:

The average UK pension pot is 62,000 at age 65. So your 25% is a about 13k.....

How does that happen?

Even "just" 100/month compounded over a working life comes out at a lot more than that.

What are people doing or it as simple as nothing at all?

[Welshbeef]

Teebs said:

Welshbeef said:

I just looked online now - randomly selected Lloyds and piped in our details and plumped for a 10 year fixes. Fixed rates were 2.23% to 2.46%.

As such anyone needing it now or within 6 months loads of choice and it’s cheap. Or anyone on variable rate.

Everyone knows what may be coming so if your not fixing… your either billy big balls confident dabbling in the markets or not aware (so tell your friends to save them cash) or utterly naive

2.23% might be cheap but not for those who are coming to the end of a 1.X% fixed rate.

A ten year fixes was never that level so those individuals elected a shorter term for a lower Apr.

If it’s too much now they could extend the term instead so indifferent monthly fee job jobbed.

[Crumpet]

bhstewie said:

stongle said:

The average UK pension pot is 62,000 at age 65. So your 25% is a about 13k.....

How does that happen?

Even "just" 100/month compounded over a working life comes out at a lot more than that.

What are people doing or it as simple as nothing at all?

I guess those are current numbers, so people who are going into retirement now. Seems it’s not just the millennials who aren’t very responsible with their money - it’s every generation.

[FiF]

bhstewie said:

stongle said:

The average UK pension pot is 62,000 at age 65. So your 25% is a about 13k.....

How does that happen?

Even "just" 100/month compounded over a working life comes out at a lot more than that.

What are people doing or it as simple as nothing at all?

I think it's sticking heads in sand.

Friend of daughter for example, not particularly close friend but ex colleague now in another part of same sector. In early 40s, living in rented flat, no pension, no savings, some debt but very cagey about size of it acc Miss F.

No prospect of any significant inheritance over any horizon, distant or otherwise.

Miss F, learnt about money from her old man, saving up for first house which has been put on hold for various reasons. Deposit >100k not including reserves for doing it up a bit. All her own doing.

Also has a LGPS DB pension which will probably in time make mine look a bit miserly, average earnings model but even so.

Chalk - cheese, the friend's situation really irritates daughter as can't make her see sense. Newish Fiesta on PCP, iPhone, out boozing etc.

[stongle]

Crumpet said:

bhstewie said:

stongle said:

The average UK pension pot is 62,000 at age 65. So your 25% is a about 13k.....

How does that happen?

Even "just" 100/month compounded over a working life comes out at a lot more than that.

What are people doing or it as simple as nothing at all?

I guess those are current numbers, so people who are going into retirement now. Seems it’s not just the millennials who aren’t very responsible with their money - it’s every generation.

Quite, to be fair the data is a couple of years out of date - but shows just how acute a problem this (and either peoples attitude to saving or ability to do it). Obviously there are people with other assets (like houses) - but in the main; retirement saving simply isn't enough.

Up until mandatory workplace pensions, nearly 20% of all working adults had NO private pension provision. That's being rectified now, but that's EVEN more critical that we don't get into massive asset write-downs - because EVERYONE is now invested in it (give or take a few).

[Welshbeef]

FiF said:

I think it's sticking heads in sand.

Friend of daughter for example, not particularly close friend but ex colleague now in another part of same sector. In early 40s, living in rented flat, no pension, no savings, some debt but very cagey about size of it acc Miss F.

No prospect of any significant inheritance over any horizon, distant or otherwise.

Miss F, learnt about money from her old man, saving up for first house which has been put on hold for various reasons. Deposit >100k not including reserves for doing it up a bit. All her own doing.

Also has a LGPS DB pension which will probably in time make mine look a bit miserly, average earnings model but even so.

Chalk - cheese, the friend's situation really irritates daughter as can't make her see sense. Newish Fiesta on PCP, iPhone, out boozing etc.

I blame the fact that personal finance isn’t taught in schools when it is such an important thing in all our lives.

With all the best will in the world parents give advice guidance but they may be dire in finance and their understanding of it.
Ditto “friends” advice.

This individual mentioned assuming the info is correct it’s a wasted 24 years of work… but line in the sand that’s done but it’s now what she can do. The issue I guess is with the cost of living hitting shed going to struggle to now take a 5-10% salary cut (into pension) without a massive change in her lifestyle.

[bitchstewie]

Quite funny you mention education.

We had an apprentice up in our office this week and he was asking me about what I thought of apprenticeships v uni and his view was they don't teach life skills through the academic system.

He was asking what I'd suggest career wise and I literally said to him "Forget that because you can change that stuff but make damned sure you're paying into your pension unto the maximum employer match now because one day you'll wake up and realise you don't want to work forever and by that point it's probably too late to think about it".

[FiF]

Welshbeef said:

I blame the fact that personal finance isn’t taught in schools when it is such an important thing in all our lives.

With all the best will in the world parents give advice guidance but they may be dire in finance and their understanding of it.
Ditto “friends” advice.

This individual mentioned assuming the info is correct it’s a wasted 24 years of work… but line in the sand that’s done but it’s now what she can do. The issue I guess is with the cost of living hitting shed going to struggle to now take a 5-10% salary cut (into pension) without a massive change in her lifestyle.

It's all true and correct, plus what not mentioned earns probably 10k+ pa more than daughter.

Re ditto 'friends' advice, she came to dinner a couple of years back and was having a bit of a bad time. I kept out of it as offering advice from a position of relative privilege isn't a good look if not asked first, but I know there were comments re how about not having a new car and concentrating on setting a budget to prioritise getting rid of what sounded like 8-10k of credit card debt rather than just paying off the minimum each month. Guess what. Horse to water and all that.

[ben5575]

Biggy Stardust said:

At the risk of turning this into a pantomime, oh yes it did.

I can see the houses & it was my orchard that the ecologists chose to camp in for their observations. The conclusion is that someone took a bung.

Send me the planning reference number and I'll have a look at the committee report.

[Cobracc]

Biggy Stardust said:

Cobracc said:

The government could bring in legislation to set a limit on the number of properties a person is allowed to own at any one time?

How many would my limited company be allowed to own? What about eg a pension fund?

3 maximum.

[ben5575]

bhstewie said:

Quite funny you mention education.

We had an apprentice up in our office this week and he was asking me about what I thought of apprenticeships v uni and his view was they don't teach life skills through the academic system.
.

My son's about to start college in September. That whole apprenticeship vs uni debate is very difficult at the moment. Particularly given the current levels of employment and nobody anywhere seeming to have enough resource to do anything at the moment.

[b0rk]

Cobracc said:

3 maximum.

How does that work then? Say your a registered provider do you have to sell all but three homes? Ignoring social housing for a mo how would the private rental market function if landlords were limited down to only three properties? It wouldn't, would it and we would an ever bigger housing problem.

You'd have to define the concept of an home and figure out how things like holiday lets, airbnbs, aparthotels, caravan parks all aren't homes and how to stop someone that owns a "home" redesignating them as not a home.

[Biggy Stardust]

ben5575 said:

Send me the planning reference number and I'll have a look at the committee report.

Pretty damn sure it won't mention bungs but thanks anyway.

[Abdul Abulbul Amir]

Welshbeef said:

loafer123 said:

Welshbeef said:

I just went into the Lloyds bank website and put in my details “pretending” I was going to remortgage just to see the rates. Those numbers I quoted are what the website indicated.

Absolutely, but your post indicated you thought that Lloyds were getting it wrong and that, over the next 10 years, rates would be much higher.

My point is that the swaps market, on which this rate is based, is the current experts view on what rates are likely to be over the next 10 years.

No they have potentially bought in credit at this % (well less so they have margin) once they sell out then will buy more at current rates.

Lol, your financial knowledge is incredibly poor.

[eccles]

Welshbeef said:

I blame the fact that personal finance isn’t taught in schools when it is such an important thing in all our lives.

With all the best will in the world parents give advice guidance but they may be dire in finance and their understanding of it.
Ditto “friends” advice.

This individual mentioned assuming the info is correct it’s a wasted 24 years of work… but line in the sand that’s done but it’s now what she can do. The issue I guess is with the cost of living hitting shed going to struggle to now take a 5-10% salary cut (into pension) without a massive change in her lifestyle.

I was the same. I kept putting off getting a pension until my mid 40's. Part of it was I couldn't really afford it, partly because I kept kicking the can down the road.
When they first mentioned making it mandatory to have a private pension I finally saw reality and enrolled in the company scheme. I'm now putting 15% of my salary in and my employer is matching me up to 6%.
I know there's no substitute for years of pension contributions but I'm doing my best to catch up.

[dmahon]

Biggy Stardust said:

I'll argue the opposite. Near me there are badgers & bats- I've seen them & the ecologists camped out saw them too, as did various locals objecting to the planning application.

Someone in the planning department must have received a brown envelope as their existence was totally denied & a bunch of houses built. The council isn't just lazy & incompetent, it's also corrupt.

Note that the additional housing wasn't accompanied by additional supporting infrastructure.

If we don’t build anywhere an animal has been spotted we will be in trouble. That’s kinda the problem.

[eccles]

dmahon said:

Biggy Stardust said:

I'll argue the opposite. Near me there are badgers & bats- I've seen them & the ecologists camped out saw them too, as did various locals objecting to the planning application.

Someone in the planning department must have received a brown envelope as their existence was totally denied & a bunch of houses built. The council isn't just lazy & incompetent, it's also corrupt.

Note that the additional housing wasn't accompanied by additional supporting infrastructure.

If we don’t build anywhere an animal has been spotted we will be in trouble. That’s kinda the problem.

But some animals have legal protections. If a Badger has been spotted there you have to get someone in to do a Badger survey, then an expert to relocate them.