To ask what recession is like and is there any way to prepare?

[sunfloweryy]

Just that really.

I was in my teens for the last one and both my parents were in secure jobs and houses so nothing really changed for me. I barely even registered anything was going on.

Now I’m 27 and bought a house a few years ago with my DH. We were hoping to TTC and upsize next year and have been saving.

I have been reading lots on here that we are likely to go into a recession as a result of all this and I’m starting to feel anxious.

Just interested in people’s experiences of what things might be like on a personal level and if there is anything we can do to prepare ourselves or make it easier?

[Tunnocks34]

I mean it depends on several factors. I think for us the biggest issue will be losing equity in the house - we currently have about 50k worth on and when we upsize we’re planning on that as a deposit. I am in fairy recession proof jobs (math teacher) so I’m not worried about job lose. My husband is retraining to be a teacher so he should be ok too. We have no debt etc other than mortgage so hopefully we’ll be fine.

[sunfloweryy]

@tunnocks34 that’s what has been on my mind too

[Tunnocks34]

I think worse comes to worse we’ll have to stay put for a couple of years extra. Our house is big enough to do so, I just want more space but we’re not living in top of each other or anything.

[thatwouldbeanecumenicalmatter]

I was made redundant whilst on mat leave during the last one 👍😑

The one during my childhood was awful, there was no hiding it even from a young child. I never want my DC to ever go through what I went through.

[OhTheRoses]

Ah recession:

1980s - no jobs, high interest rates
1990s - mass redundancy, high interest rates, repossessions, property crasg
2008-2011 - mass redundancy, property crash, repossessions.

Uncertainty, fear, lost opportunity, hunger for some, homelessness for some.

It isn't pretty.

[ZaraW]

I lost 50K on the sale of my flat. It took me years to get out of financial hardship.

[GrumpyHoonMain]

If your job is secure then the best you can do is cut down on expenses where possible. The financial crisis wasn’t awful other than we were fixed into a 6% mortgage rate agreed just days before the markets crashed - the property market where I am wasn’t really affected as it’s a London commuter town.

[opticaldelusion]

It depends. If your job is secure and reasonably well paid and you're not trying to sell a property in negative equity, you'll probably be relatively unscathed. Depends on interest rates and inflation too. If both of these are high and you have debt you might struggle more.

It's really difficult to say how any one individual will be affected.

[The80sweregreat]

It's bleak.
Save if you can. It's a horrible time but it passes. It's sad this virus has happened now as things were starting to pick up a bit.
I'm worried but that doesn't help anything.

[sunfloweryy]

I’ve read things about both high interest rates and negative ones... so confusing!

[JustMarriedBecca]

When we bought our house we calculated based on 11% interest rate. You just don't know. If you are prepared to cut back and lose luxuries then you'll be fine. If you are the type to have hysterics because you can't get an avocado then things will be tough.

[DonnaDarko]

The last one happened just as I was graduating from university and it really didn't affect me to be honest. I had a job within a month of graduating, for a company with mostly public sector clients so my job was very secure.

Now, I could see myself possibly losing my job as it's in the fundraising sector. But I'm trying not to worry as I don't see the point of worrying, it will just stress me out and there's very little I can do to change our situation

[KillerofMen]

I was your age during the last one. Both me and DH were made redundant and couldn't find work for about 8 months. I guess the plus side is the only way was up?

I would say we're financial more prudent than most people as a result. Wouldn't stretch ourselves on a mortgage for example. Save money rather than go abroad. I'm confident now that we have enough savings to keep us going if the worst happens again.

[Whatsmyname26]

With saving does it make more sense to have money in bank accounts or to pay off some of the mortgage? Jobs etc secure here but I’m not sure what’s the most sensible thing to do with any spare cash

[ChazsBrilliantAttitude]

Don’t take on any unnecessary debt.
Clear any expensive debt to the extent you can.
Simplify your outgoings and make sure you are paying the best price for things like utilities.
In an ideal world work in a different sector to your partner unless it’s something recession proof like an insolvency practitioner

Don’t panic. You can only do what you can do.

[StopMakingATitOfUrselfNPissOff]

I was made redundant in the last recession. I was only 21. I was then unemployed for 4 months. Luckily I lived with my parents so I was ok in that sense but it was a fucking horrible time.
Both my DH and I work in an industry likely to be hit hard by recession so we've got good savings, we aren't stretched on the mortgage etc etc.
It was a truly awful time for me. One I hope not to have to repeat

[ChazsBrilliantAttitude]

There is nowhere for interest rates to go but up as the BoE has cut Base Rate to almost zero.

[LakieLady]

The best preparation I can think off is to pay off debts, if you have them, starting with the ones with the highest interest rates (usually credit/store cards). That way, you'll reduce your outgoings and maybe be able to save some money.

If interest rates rise, the cost of a lot of existing borrowing will increase and you'll have less disposable income.

If I didn't own a house, I don't think I'd buy for a while. While prices may not crash, I can't see them keep on rising the way the way they have. Some people may have to sell if they lose their jobs and there's also, sadly, the risk of repossessions (rising unemployment and rising interest rates is a killer combination).

And, unless you have a very secure job, don't enter into any big financial commitments, like cars on PCP, until things are more stable.

Sectors that I think may be badly hit by job losses are retail and hospitality, both tend to contract quickly in recessions as people rein in their discretionary spending first.

[LakieLady]

With saving does it make more sense to have money in bank accounts or to pay off some of the mortgage? Jobs etc secure here but I’m not sure what’s the most sensible thing to do with any spare cash

I think that depends a bit on your current mortgage deal. If you're on a good mortgage rate that's fixed for 5 years, it may be better to keep money on deposit, as the interest you're getting on could be more than you're paying on the borrowing. And if you have other debt, that is bound to more expensive than the mortgage, so better to pay that off than pay down the mortgage.

[snowegg]

It's shit. Been through 3. Riots in the 70's.

[fallfallfall]

i didn't notice the 1980's recession until it came time to find work, i had to move far away from friends and family to get secure work which was sad but safe.
2008, we viewed our house as a home not necessarily as a investment or tool to upsize. we lost a far chunk of tax free savings but it did climb back.
2020, again the tax free savings took a hit but i see lots of hope on that front. our housing remains secure and again is not part of any plan to upsize.
what i know and remember from the leaner years is the fact we didn't eat out, no manicures pedicures, and not any money for extra's (clothing were mended) certainly no magazines or newspapers everything carefully budgeted.

[Theyweretheworstoftimes]

I was 24 at the last recession in 2008. Worked in the City in Finance. I watched the Lehman Brothers staff leave the office with boxes of belongings. I watched people's retirement plans and investments fail. I have shares the my grandkids might have some value in. I watched my generation and my sisters generation struggle for jobs, houses, to build lives and careers. My sister left the UK for Europe for work and was fucked over by Brexit. Now lives in Canada.

I take jobs based on perceived safety and security. We have over paid mortgage and saved and saved and saved for the rainy day they said wouldn't happen cause the crash was once in a lifetime.

In a recession people stop spending on things they don't have to spend on. They will cancel gym memberships, stop going out for meals, stop drinking in pubs, stop going on holiday. This means job losses. The more jobs that are lost the less people spend, the cycle goes on until it hits rock bottom. People can end up in negative equity. People don't move so the housing ladder and the jobs related to it don't exist. So on and so forth.


www.weforum.org/agenda/2020/04/mapping-covid19-recession

[Whatsmyname26]

Mortgage is our only debt and we have a small amount saved in easy to access savings. Mortgage fixed for 2 more years so will probably need new deal in the midst of high rates 😫

[Jenjenn]

I was your age during the last recession. It is only due to the last recession that we were able to buy a small house in a nice area near our families as ftb. Before the recession we were looking at 1 bed flats well outside our preferred area. We were both made redundant 2 years after buying the house. We had good redundancy packages, no debt, no kids and managed to use the time to change our careers. It was an anxious time but worked out ok. As pp, it made me very prudent when it comes to finances.

[Honsandrebels]

Recession is shit, this will be my fifth. Childhood blighted by the 70s/80s recessions, 20s shot by the 90s recession in terms of jobs, good party years tho. 2008 wasn’t so bad as had a manageable mortgage and recession proof job. DH is in a vulnerable industry, was ok in 08 but this is worse.
I tend not to stress now- we have our strategies in place (frugal, don’t over leverage re debt, one of us has a sound job, prepare to do anything to stay afloat eg take in boarders/work in different jobs for a bit if your normal job goes/rent out your house and live somewhere cheaper if that is possible (last resort that one), sell anything of value you don’t need, rein in all superfluous spending). With this and a bit of luck you will pull through ok. You will live through another couple of recessions in your adult life, see this as an opportunity to gain the skills and experience to ride them out.