People just need to cut back & they will be ok

[nameschangg]

Following a discussion on the radio about mortgages/col I made the comment that even for those that can afford the increased mortgage costs it's difficult to get one's head around paying more just to service debt. Colleague replied that's exactly the problem & the media are over egging it. His argument was recent buyers have stress tested & many will still have seen jumps in house value. He said any older buyers will likely have a ton of equity so can just shift to interest only or sell. His main argument was people can afford the rises & they just don't want to give up the nice things they are used too. He said the gov know this & know how much people saved in lockdown. Admittedly everyone in the office did say they saved quite a bit (including myself). I argued that not everyone fits that criteria but he believes the majority do & the media needs to stop scaremongering. Does he have a point?

We (thankfully) still have 2.5 years left on our fix, could afford to pay more but why should we have to lose out on things when we both work hard and have 2 children under 3 to treat with what we earn!

Yes SOME people will be okay with cut backs but again why should they have to…and even the people that can’t afford to own are affected because rent goes up when landlords have to cover the higher payments with. Some people just don’t have anything left to cut back on

It is what it is, when it comes to it we’ll have to pay but it’s frustrating. Why do people think it’s acceptable to work just to survive?

Absolutely! If you’re not wealthy, then jolly well just suck it up! Heaven forbid we have any equality of standards of living!

Let them eat cake (if it’s in the going out of date section/food bank)

That was the indeed Keynesian viewpoint, however to do so requires more Government borrowing. Given the massive jump of £500 billion in Government debt spent on Covid measures, borrowing more money is not an option as Liz Truss found out the hard way.

Surely with fiat currency debt needs to exist to then use the banking method of fractional reserve ?

But right now it's not about growing the economy it is all about getting inflation down. And yes as interest rates rise and we tip towards recession then people will lose their jobs.

Unemployment also brings inflation down as people have even less money.

The smart thing would have been not to lockdown the country and spend a whole bunch of printed money on furlough, bounce back loans and let's not forget £600 million on eat out to help out.

Or fucked up nepotism and PPE contracts. Or, maybe, Brexit.

NRTFT

But, if cutting down on expenses, means that families like mine have to rely more on food banks and not topping up our gas and electric when we run out, then yeah ok. Your colleagues are extremely out of touch with what they're saying. We don't have a mortgage so possibly missing the point of the thread completely here.

It just makes me really angry that there's people out there that don't realise how hard some of us have it. I get paid a really good wage, but my partner cannot work due to health issues. My wage alone, and a little UC help, is not enough to cover our basic needs. Maybe your colleagues need to live a day in the life of those of us that live hand to mouth.

Sorry, I could rant about this all day.

I don't understand people who are having huge mortgage increases, did they not budget for this and project out into the future? And yes you can cut back, if you want to. We are such a consumerist society now, I bet most people could easily cut out things. I have friends moaning about this who spend so wastefully

Exactly this 👌🏻

Utility and fuel yes coming down, but still high. Food certainly isn't increasing in price as fast it was but the prices are stabilising a little, not coming down.

Used cars on the other hand are massively increased in price, anyone needing to replace a car will see a shocking rise. Especially impacts on the 'only just getting by' people.

I believe ironically, that employment is at an all time high, though I'm not absolutely sure of that, but it is known to push inflation up too.

I don't understand people who are having huge mortgage increases, did they not budget for this and project out into the future? And yes you can cut back, if you want to. We are such a consumerist society now, I bet most people could easily cut out things. I have friends

you can be stress tested for a mortgage and save during the pandemic due to lack of a commute and everyday spending BUT the mortgage increases came after increased bills, electric, heating, oil, food etc which were unprecedented and sucked away money at a shocking rate. Everything jumped up in price- my biggest rant (laughably maybe!) is that we can no longer afford regular foods like yoghurts, certain fruits and cereal now is the cheapest non brand we can find and god forbid we buy anything more than budget pet food! It is astonishing that people have your viewpoint- it was like having an umbrella and raingear ready and then being hit by a tsunami!!!

@snoopybus Also why should we give up 'nice things', why should like be whittled down to work and bare essentials? in some ways I agree with you, but then I also wonder. When I look back, we never really went without but there certainly wasn't the consumerism there is now. It would be very interesting to see what proportion of income goes on non-essentials now. Buying the latest clothes, furniture, car, holidays, going out for meals etc. My lifestyle is completely different to my parents. I would also say for many people, they don't go without and often live way beyond their needs. We are very much a materialistic, 'need it now' society. I learnt I need to save up to buy things when I was younger, I'd say that thought process is pretty much non-existent nowadays

When we bought our house 8yrs ago, we bought on one salary and well within our means so that when we did have children, we could easily afford the house and all bills on one salary alone. Fast forward to now and after 3children, I had to go back to work after mat leave to be able to afford all the price rises. We were planning on me being a SAHM until the youngest went to school but that's no longer an option. Also my dh's salary has risen by over 50% in the past 8yrs, we still drive the same 16yr old car, and pre children we had 1 holiday a year. We've not been away now in nearly 7yrs. We are just about getting by currently. I just went on mat leave during first lockdown, my dh lost his job, we used most of our saving to get through it.

No I don’t think he does, I don’t know a single person who saved money during lockdown still had to eat pay bills etc, I think because some people are doing alright that’s all they see, they don’t see that people are already cutting back because of utility, petrol, food and every other price hike it means that people probably won’t be able to afford mortgage rises…he sounds like an “I’m alright jack” kind of person!! Also why are we continually shamed for wanting the things in life that actually make life a little bit more enjoyable!!

God forbid one saves a little money. They have to come down after with our delay. Ridiculous country and so exhausting living here.

It IS exhausting, @Highandlows , that’s the perfect word! I long for dull serious politics, without scandal, without corruption. A government I can just ignore as they get on with making the lives of the many better, instead of just the wealthy few.

I feel so lucky to have been born in the 1960s, and am devastated at what my generation has done to the place since then. I’ve never voted Conservative so don’t feel any personal guilt, but sweet zombie Jesus, how sorry I am for younger people having to pick their way through this wreckage of the UK.

By cutting back on things like a daily commute (wfh 3 x a week), stopping eating out/daily coffee shop coffees, and meal planning with set and smaller portions (we could all do with losing some weight), we can cope. However, for those who haven’t paid off their mortgages or are renting, it’s likely to be a different matter.
I’m fully aware that, even before the CoL crisis, the costs of rents and mortgage payments were taking up a far higher proportion of take-home pay than they should, and that people (particularly young people) were getting used to living (existing?) without any treats/holidays/prospects of getting on the housing ladder.
Your colleague is wrong: how can people cut back if they are only able to afford the bare essentials as it is?

What about the cost of living crisis?

Any money I would have once put in savings now goes on bills.

My shopping budget now only covers half a week's shop.

My pay isn't rising along with the cost of everything else.

I am sure I am not unique.

"We all have the same 24 hours in the day. So why can some people pay and others can't?"

-With credit to Molly Mae who didn't say the above ;)

jobs that had the "privilege" of being able to function during the pandemic included nurses, doctors and the police, hardly "cushty"
To be fair if your daughter got paid furlough to have several months doing nothing that's far more "cushty" than people who had to work throughout. And although it must then have been disappointing to lose her job, at the point when the places that hadn't closed reopened hospitality were desperate for staff (and still are now now) so it can't have been hard for her to find a different job. Or she could have retrained in what you think to have been a "cushty" job.

The media has been pushing this "how can ANYONE afford to live" narrative for years now. First it was lack of jobs with hundreds of people applying to every starbucks batista role or whatever. Then in covid how could the furloughed or those who were self employed possibly survive on their 80% wages for doing f all. Then everyone was choosing between eating and heating because of the energy increase. Now its mortgages and wages not matching iinflation.

Yet somehow despite it all everywhere I look in my very normal lower class, average wage life people are spending hundreds on concert and festival tickets, buying new cars, updating their phones as soon as they run out of contract, restaurants and bars are heaving every week3nd

For anyone on Universal Credit, the government has announced extra help with childcare costs:

https://www.bbc.co.uk/news/uk-66023661

@latetothefisting
Or she could have retrained in what you think to have been a "cushty" job

Thats all very well and good but she was at uni full time and her hospitality job was helping her with flat and general living costs. She wasn't just sitting on her arse having 80% of her wage handed to her. The only area she was trained in was hospitality and other jobs wanted an arm and a leg for minimum wage (a degree, 3 years experience etc). It doesn't take much brain power to work out why she didn't save much after having her salary cut to 80% before then losing her job and having to move back home.

And I'm saying this is someone who works in the care sector, on a low wage, who worked throughout. And yes I consider that cushty and privileged because at least I had a job (and before anyone says stepdaughter could have done the care job, they only want full-time staff and she couldn't have done a 48 hour week on top of a full-time degree)

@snoopybus

"I didn't save more during covid, and I'd argue alot of people who lost their job during covid or have had to use any extra money to cover bills/expenses also didn't.

Your work colleagues are showing their privilege.

Also why should we give up 'nice things', why should like be whittled down to work and bare essentials?"

+++

Because it doesn't matter if you didn't save any money or lost your job or won a £200 million PPE contract - the fact is we all now have to pay the price of the lockdowns which is higher inflation resulting in higher interest rates.

You can’t blame lockdown for our CoL crisis and soaring inflation. Yes it played a part, but before that we had a decade of austerity with miserly funding for public services from a spiteful, grudging Conservative-led government, plus the economical disaster that is Brexit, plus the global shock of the Ukraine war, plus yet another crazy Conservative prime minister nearly crashing the economy to give wealthy people yet more tax cuts. Sheesh! Where do you get your news from - Facebook?