2/5 of people have less than £100 in savings

[Jorginho5]

your thoughts?

I am not surprised. Everything has gone up in price but many people are struggling to either: find a full time job or better job than the one they currently have.

www.thisismoney.co.uk/money/saving/article-4348544/Two-fifths-UK-s-workers-100-savings.html

This thread is interesting to me because I think there are such widely divergent attitudes to saving (among those that have a choice).

I always tried to have zero debt (pre house purchase) and saved what I could. Then split with ex who became v abusive once the children were born and I was really scraping along paying massive childcare and mortgage on my own. It was a good month if I was out of my overdraft for a week or two. However, the stress for me was low because I have fairly wealthy parents who bailed me out when my car broke down (for instance). I can see what a hugely slippery slope I would have got into without them there as my “safety net”.

A few years down the line and I am with a new DP who is panicking at the moment because he “only” has £6000 in savings (post a house purchase where we put in a substantial deposit to keep costs low!). Having been at the scraping along end I find it kind of amusing, but then I also think it stems from the fact his parents are not at all wealthy, so he needs to help them out rather than the other way round.

I have £750 ish in savings and am planning to get to £1k and then all extra money after that I will push into overpaying the mortgage instead. As others have said, mathematically this makes more sense. DP will probably want to save a fair bit more so he knows we can replace the car when needed etc

user I think your attitude is the dominant one for generation x and y. Zero interest credit cards aren't always going to be available and they aren't really 0% because you pay 3% transfer fee.

Our car was hit two weeks ago. It's a Volvo XC90 which is 6 months old. The car is high value so insurance are never going to write it off. The rear axel snapped and I am just not comfortable driving the kids in it. The cost to fix the car is $17k although we only pay the deductible. We also replaced all 3 car seats which wasn't cheap. In one month we bought a new car (minivan which is ugly), 3 new car seats, paid the insurance deductible and rented a car while the Volvo is being fixed. Total cost of all this is what most people make in a year and yes most will be refunded. I am so thankful that when this happened we didn't have to think 'how can we afford this?'

That is why I couldn't sleep at night with £100 or less in savings. I would be so worried about anything happening outside of my control and it sinking me. With 3DC and high childcare costs an income of £100k a year doesn't go very far and I would assume most families have to carefully plan their budget. I know our family are not the majority and it saddens me that so many people on here seem to be shrugging their shoulders that this is an issue. I know the stress of having no personal safety net and it's beyond sad that as a society we seem to be ok with so many people left living like this. No wonder MH issues such as depression are so common.

Zero savings despite working 40 hours p/w.
Each month is a struggle.
I'm aged 51, all my adult life has been a financial struggle.

msbagel I think that’s the reality for so many people. Mumsnet is quite unreflective of the average population I would say

@RedBlu thanks for the code. I've signed up as I should be saving and don't. I'm lucky as I do have savings now but only because my Dad died. I will spend them all if I'm not careful. I need to review my spending and cancel stuff in my bank. I've had sleepless nights over £30k of credit card debt not that long ago. I can't go back there.

I have savings for the first time in my life (via my partner being given some money). I'm in my mid forties. All my adult life I've had to live from month to month and usually in debt. My parents had no money or property. I don't think I'll ever get over the 'being poor fear' Most people I know who are poor, or grew up poor have that inner fear - of something going wrong, losing their home etc. It's horrible. And tbh, having some money in a savings account now (enough to cover one years average salary) makes me feel pretty guilty about other people's situations.

never I agree with the divergent attitudes. My parents were just about okay, but couldn’t afford to save much - or rather they saved but that saving then paid for annual or irregular expenses rather than building up over a course of years. I know that if I want to pay for something (e.g a new to me car) it HAS to come out of my savings. I know that if I want security in my mortgage payments I have to have savings for that, etc etc.

I have always been very careful with money, saving circa 40% of my gross income from when I first got a proper job. I use 0% financing where appropriate, but generally prefer to know exactly where I stand.

I honestly can’t imagine how people earning £100k a year don’t have anything saved at all; I would feel extremely insecure, but also I just use it as a method of money management - 10% of my net income goes straight into a short term savings account which then covers car insurance, holidays etc when they come out, so that is almost always sitting at > £100 without considering other savings. I have a good job, which is in demand and am very highly qualified within my sector so would be unlikely to struggle for work, but no savings would not work for my psychologically.

I am looking at switching to longer term investments now though, as my liquid assets are back to being decent after a couple of very expensive years. However, I do think having some cash saved is important: even things I’m insured for can create cash flow problems if you don’t have any liquid funds.

Want2bSupermum

I don’t think anything you say is untrue, it’s just a difference in attitudes to savings and debt. We were in a similar position when our car was written off. We took out a loan and bought a new one. We paid the loan off monthly over 24 months and it had very little impact on our lives. Debt is only a problem if you can’t afford to repay it.

user Debt is seen that way by many of generation x and y because they have never had to survive crazy high interest rates. Debt isn't an issue when it's below 5%. As soon as it goes above that it's an issue. The days of 5% and higher interest rates are getting close. I don't think many younger people have any clue how bad it will be. It's going to wipe out those who don't have a cushion because they won't be able to borrow like they can right now.

@want2bsupermum have you been ignoring the newspapers this week? because it has been all over the press that Bank of England have been saying that very low (sub 3%) interest rates are here to stay for decades...

never I work in capital markets. With the way Treasury bills and notes look and what we see with fed funding I don't see how the Bank of England will be able to keep their rates low enough for mortgage rates to remain under 5%.

The US is about to implode. The housing market in the $2m+ range has come to a complete halt. Car sales dipped while repossessions increased late last year and haven't recovered which has been a huge indicator of an impending recession. As US rates increase it's going to force everyone else's rates to increase too.

NeverTwerkNaked

@want2bsupermum have you been ignoring the newspapers this week? because it has been all over the press that Bank of England have been saying that very low (sub 3%) interest rates are here to stay for decades...

Please link to one, just one, article that has the BofE saying that.

I was paying a mortgage at 14% we managed even though i was low pay because are mortgage was small in terms of borrowing,many didnt manage it

But im alwways amazed how people really dont allow for a larger interest rate,now thats plane silly

You managed because your mortgage was small, flopsy. Try managing on a £250k mortgage. You’d need an enourmous amount saved now to help with that

Yes i know,i was fortunate looking back dont envy the housing market now

Its mad but same mortgage at its highest intrest only was £800 at its lowest£160 when i paid it of if memory serves me utter madness

@want2bsupermum @carribeanyesplease

Hopefully this link to The Times works: www.thetimes.co.uk/edition/news/bank-raises-interest-rates-to-0-75-h3b93nwdd

never It's such a stupid statement it's not even funny. Mortgages are already priced at 4.5-4.875% with 30-45% deposits. A 2 year tracker with an introduction rate is just that. You are blowing money if you keep on refinancing. Term mortgages are over 5% already.

I'm really glad and really sad to read this. I literally thought I was the only adult alive with zero savings. Got about £7000 of debt and that consumes my every waking thought and prevents me from sleeping. Single mum of 4, who works full time and can't make it from month to month. I'm so embarrassed about it and would never tell a soul in real life.

Mortgages are already priced at 4.5-4.875% with 30-45% deposits.

What does this mean? I just got a 10 year fix at 2.39%.

Same ridley , we just got a 10 year fix at just over 2%.
And @want2bsupermum nowhere did I suggest that people should keep refinancing? Far from it, we overpay and I would encourage others to. But I do think it is interesting what BOE are saying, because it goes against what I was expecting (hence why I got a 10 year fix!)

@messydesk you have nothing to be ashamed of. It must be v hard with four, I found it tough enough when I was a single mum of 2! Have you read TalkInPeace’s threads on simple things you can do to get debts down? I’ll try and find a link if you are interested.

I've just checked mortgage rates in the US at bankrate.com and the cheapest 15 year fixed rate loan in my area is offered by CF Bank

www.cfbankonline.com

I don't know if I'd want to take out a mortgage from a bunch of CF bankers.

We don't have any savings.

I used to have a few hundred when I was on Income Support when my daughter was a baby (I was single when she was 0-2 years), but I spent it on a condenser dryer (the vented one was making my basement flat mouldy), and have had nothing since.

My current partner earns £18k, and I home-educate my (now 7 year old) daughter so don't work.

messydesk Its very common that a family has zero savings. When split by household type families are the poorest by a large margin. The report by IDS and Frank Field was sobering. 70% of families (households with DC 16 and under) were defined as living in poverty compared to 46% single adult households with no dependents.

We have 3DC and it's very expensive. I have a well paid job (about £110k a year) and I'd struggle as a single parent raising my 3. Childcare costs sink families and make it close to impossible to get ahead. It would def sink me.