Legal & General - Deadline To The Breadline Report

[Martin@AS Financial]

Ignoring the sales spiel from Legal & General, this actually makes for pretty scarey reading:


Average UK household overall is 29 days from the breadline.

People estimate their savings will last them 77 days – over two and a half times the actual deadline.

Wales has the shortest deadline in the UK, of just 7 days

Over a third (35%) of households have no savings so they could potentially be on the breadline tomorrow.
36% of households have no financial back up plan in place to deal with an unforeseen shock to their income. This is deeply worrying as our research shows the average weekly cost of living is £381.

A rise in interest rates is likely to push households to the brink and put additional strain on family finances. Our report shows a 2% rise in mortgage interest rates would move the typical household with a mortgage one day closer to the breadline. Even a 1% rise would mean households would no longer be able to save each month and would have to change their spending habits, or rely on existing savings, to make ends meet.



Full Report below

http://www.legalandgeneral.com/libra...aid/W13612.pdf

[vetran]

Its pretty normal and with rubbish saving rates you can almost understand it.

War chest is 4->6 months smug smilie

[original PM]

this is really not news

I know many families who have little to no savings and struggle to make ends meet.

They obviously have big screen tellies, new ford's on higher purchase and large credit card bills but that is because they refused to save and wanted everything now.

[Rhino 888]

Found some old paperwork from my first mortgage.
I was paying (or trying to pay!) 15.8% at one point.

They say that can't happen now, but I don't recall people expecting it in 1987 either, when I bought that house?

I feel there could be interesting times ahead.
The BoE will raise rates for the same reason it cut them, i.e. following the US.

So a lot of people could find themselves skint relatively soon.
Which is going to do what exactly to house prices?
Deja Vu and all that....

[SueEllen]

this is really not news

I know many families who have little to no savings and struggle to make ends meet.

They obviously have big screen tellies, new ford's on higher purchase and large credit card bills but that is because they refused to save and wanted everything now.

Big screen tellies aren't expensive any more and having an idiot box is cheaper than going to the pub.

[original PM]

Big screen tellies aren't expensive any more and having an idiot box is cheaper than going to the pub.

True but 20" non 3d average tv is way cheaper than 40" smart tv and they still go the pub anyway

[SueEllen]

True but 20" non 3d average tv is way cheaper than 40" smart tv and they still go the pub anyway

Ahh you mean a Wetherspoons <shudders>

[OwlHoot]

There'll be wailing & gnashing of teeth when the rate goes to 1.5% much less 15%. ...

I'm starting to wonder if this proposal to let people get at their pension savings, thus reducing the level of savings, isn't at least partly intended to increase interest rates, with the aim of kick starting the economy that way.

[NoddY]

Interest rates are not going up. At least not by a meaningful amount.

Rationale for this statement: why upset the apple cart? Everything is going swimmingly for those that matter.

And why is this "Deadline To The Breadline" report scary? Aren't people more malleable when under financial pressure? Up to the brink, not past the brink is the trick.