Chatting to our IFA, just sorting out a new mortgage deal he motioned most banks are adjusting their affordability calculations slightly in readiness for 2022. Increasing the buffer they use for living expenses when they decide how much you can borrow. This doesn't effect, or worry me per-se, but the reasoning behind it obviously does.
I hadn't really taken the time to put all the pieces together, but in the 6 months or so, we can all look forward to the following:
Big rise in Energy costs, 50% for some on really good fixed deals that are ending, but that's only until April 2022, when they will adjust the price cap again. If the wholesale price doesn't fall, it will be rising, and by A LOT.
Increase in NI Payments.
Increase in Council Tax, I think it's only £10 a month extra for us, but it all adds up.
Possible rise in Income Tax / VAT, Duty etc. By the sounds of the Tory conference, they've not finished with the bad news yet.
Price rises on pretty much everything else.
I've been looking through our family finances, all things being equal, by April 2022 we'll be £120-£180 a month worse off, and that's not including any as yet unannounced tax rises, or general inflation on essentials like food.
Don't get me wrong, we're lucky. We've both got good jobs. We're by no means wealthy, but we have enough that we'll still be able to pay our bills and have a 'lifestyle'. We won't suffer the double blow of the reduction in Family Credit, but I know a lot of people who are already finding things tough going, a reduction like that will really hurt them.
Hopefully junior will become financially independant at some point during 2022, that would mean 30% deflation in our fixed outgoings - coke and hoo... nah, boring. Horses, guitars, bicycles, holidays ... here we come.
There's a recession on the way, some raging inflation for a while and plenty of misery of epic proportions for us minions.
We’re all in this together…
at least us plebs are. Someone has to pay for those dodgy PPE contracts.
Think this is global or European wide or more UK specific as most of these problems are either thanks to our amplified by brexit?
Horses, guitars, bicycles, holidays … here we come.
Sorry dude - if horses are involved there will be no spare money for guitars, bicycles or holidays!! 🙂
I do think we're seeing the multiple Brexit + pandemic + climate change financial impact gathering pace.
It's not going to be pretty.
I'm relieved to have just signed a 5 year mortgage fix, sold the BTL and not planning any more borrowing beyond £1k of outstanding car loan.
I'm also glad to have three kids/young adults tucked up in education and all working part time.
We're very fortunate and yet it still causes me concern. I was reading a thing this morning predicting that the Chinese property company and global issues may see us have the biggest stock market crash in history too... (Not sure if I believe that too much)...
the Chinese property company and global issues may see us have the biggest stock market crash in history too
It's all priced into their bond values already as it's been a long time coming. The only unknowns are exactly how many companies will default by how much. The CCP will ensure some fingers get burnt but won't allow a total collapse as that would upset Chinese consumers.
Due to remortgage next year, two young kids, meagre savings and one income. Tough times or life of crime here we come!
I'm thinking overall cost of everything will be up 6-10%. Going to be painful for a lot of people sadly
get rid of things you dont need.
sky tv or any other pay per view.
go pay as you go on a budget phone.
eat less meat, treat it as a luxury once a week.
stop drinking.
if i did all these i would soon be back in pocket.
Just waiting for the sale of our flat. Then after clearing the mortgage, sticking £10K in both the kids accounts, and clearing my credit card I will be debt free for the first time since i turned 18 (31 years ago !!) and have a few quid in the bank to boot. Couldn't have come at a better time and not having anything hanging over me financially is a relief with these uncertain times ahead.
Appreciate I am very fortunate, but have been at the opposite end without a pot to piss in , and had I not taken the plunge to go self employed 6 years ago , I certainly wouldn't be in this position now.
Similarly, 4 mortgage payments to go.
Not a humblebrag, quite the opposite, been working hard and overpaying for years, it wasn't easy.
We’ve been overpaying mortgage for years, also took out a 10yr fixed 2 years ago, which will take me to 2 years from end of mortgage.
Whilst both in well paid jobs, I am still on a much lower salary than pre-Covid, so will have to make changes, which will be manageable thankfully.
It seems like the first few of us to post, possibly even a reflection of the STW demographic, are not the 'average' UK household.
The changes brought in and increases in basic necessities are going to affect those on low income far more. Brutally so - it's food, energy and housing costs that cannot be avoided.
It's also got the possibility of hurting many in the 'squeezed middle' who while earning well have a lot of debt and (life choices) outgoings. Of course the biggest issues there are employment and mortgage interests rates.
Yes, I agree Matt. I've no idea how a single parent in a low paid role does it.
Agree with the above, it is going to be horrible for those who are either only just managing now or are already underwater. I can't imagine how that must feel
get rid of things you dont need.
sky tv or any other pay per view.
go pay as you go on a budget phone.
eat less meat, treat it as a luxury once a week.
stop drinking.if i did all these i would soon be back in pocket.
Me too. But if you cut back on your consumption then all of a sudden there doesn't need to be the same number of drivers, shop staff, warehouse workers etc.
With no debts and a job for life (at least as far as one of those exists these days, haha) I'm not worried - which probably means I'll be redundant by January and on the streets by March... 😀
Think this is global or European wide or more UK specific as most of these problems are either thanks to our amplified by brexit?
I think it's impossible for most of us to really know how much is Brexit and how much is Covid and other factors, I think most are a bit of each. The energy problem is global, but not helped by trade disputes with the EU, coming at the same time as North Sea probably doesn't help.
Tax (or rather NI) rise is being sold as to boost the NHS, but it could just as easily be Brexit, but the Tories will never say as much.
Johnson's speech today is going to be very telling, he's talking big changes, and I can't see them being very good for the common Man and Women, however he spins them.
I'm starting to regret only taking a 2 year fixed rate deal on the mortgage...
I’m starting to regret only taking a 2 year fixed rate deal on the mortgage…
Yeah, we're 2.5 years into a 5 year fix
Cost a lot to get out of it and fix again, so just going to have to weather the storm
I'm fully expecting the shit to hit the fan in the next 12 months for me. My savings are getting very low (got 2 months of bills left) and I've not got permanent work so things are a bit close to the bone for my liking. How people who live from paycheck to paycheck are going to cope I have no idea!
Thankfully I have no debt and my outgoings are as low as I can get them (barring Spotify, Amazon Prime and Zwift which can be cancelled immediately) plus my rented flat only needs a month's notice to leave so if it does get as tough as I think it is I can drop everything and go back to my parent's house with a month's notice. Doing that though will severely limit my job prospects and be a real blow mentally, it will be the sign that my life has completely changed in the last 2 years.
I think it’s impossible for most of us to really know how much is Brexit and how much is Covid and other factors, I think most are a bit of each.
That is true but there is no way in hell that Brexit isn't making our exposure and ability to respond worse than if it hadn't happened.
I’m relieved to have just signed a 5 year mortgage fix
Same here - just built a whopping extension, spaffed half our savings and fixed on a rate lower than our previous 2 year rate. Selfishly a period of high inflation wouldn't be the worst thing in the world for us right now. I'm no Tory by any strech of the imagination, but their complete cluster **** of a government does seem to be working for us at the moment.
For the many millions whose lives are difficult today 2022 will move to way beyond difficult.
Listening to johnson's conference speech, he clearly has no interest in doing anything to improve that.
our only significant outgoing is 3 days a week childcare for the youngest. He'll move to 30 hours 'free' (read discounted) childcare, so our costs there will drop significantly, more than offsetting any rises in utility bills. Otherwise debt free (inc mortgage), so unless I lose my job I'm expecting everything to be pretty normal
Yes you are right to be worried as the personal inflation basket on a low earner will be much higher than higher earners. That's because energy, food, council tax are a high proportion of their spend, and there's not a lot you can do about the higher prices.
Sadly a lot of people are living on the edge and this will tip them into debt.
Heard on the news the other day that as many as 4 million families are already in a position where cost of living is up to £9k per annum more than income. How many suicides are going to be caused by spiralling debt just to exist?
Heard on the news the other day that as many as 4 million families are already in a position where cost of living is up to £9k per annum more than income.
Maddness! Puts things in to perspective.
If I were single and in your position I think I would go on the road and do seasonal work on farms. Loads of work, not badly paid, flexible with. Other opertunities may arrive.
If career is important to you I would do the same but short term contracts. Quickly gain experience and move where the jobs are. Travel inbetween jobs taking time out.
Currently busy reducing any debt. Mortgage gone, hammering re-payments on the credit card to get it to zero. Should be OK, electric bills are sky high, mainly due to WFH, so we're not going to use the shed office and conservatory to work from as much over winter (both back 2-3 days in the office). Gas is quite low as the house is efficient, so gas going up, even double is only £40 a month.
I'm back commuting to work by bike when in the office - that's saving £6 a day in wasted fuel. No plans on a foreign holiday (CBA with testing). Trying to get my son to try harder at a full time job - he's just part time after losing his full time job - but he's depressed and it's not helping.
We should be OK, but as earlier, down a couple of hundred a month.
Sadly a lot of people are living on the edge and this will tip them into debt
If you look at the number and size of foodbanks running in what is purportedly the 7th richest economy in the world, a lot of that lot are sadly already beyond the edge. Inflation in unavoidable costs, tax rises outside the personal allowance. (because that's what national insurance increases are, let's be clear about that!) and the imminent £20/week benefits reduction are disproportionately going to impact the poorest in society.
Tax rises should have been lumped on the higher rates by adjusting the 40% boundary lower or just increasing the % for those in the 2 highest bands, (and that includes me) but that wouldn't suite the Tories natural audience of supporters. Absolute shower of ****.
If you are under the age of 40 and don't have the bank of mum and dad you have no chance in Brexit Britain. I think we will have 2012 style riots again next year, no way can we just keep writing whole sections of society off, while the rich get ever richer and think people will put up with it.
It seems like the first few of us to post, possibly even a reflection of the STW demographic, are not the ‘average’ UK household.
Hardly surprising, not many people worrying about how to pay next month's mortgage / fuel bill have time / energy to chat on a cycling forum....
@TheBrick - not practical when I've got 2 elderly parents to look out for otherwise I'd be looking at something like working on cruise ships. A friend did it for 2 years after uni and managed to build up a sizeable savings pot despite lots of partying and other stuff while on board.
Indeed. Despite the protestations when Mark states that his research shows STW users, are, on average, comfortably better off than the national average, a glance at the 'watches N+1' thread or the 'retirement' thread, or the 'skiing holidays' threads, (and so on and so forth) suggests that STW'ers are in general, not exactly hard up.
in what is purportedly the 7th richest economy in the world
Sorry to pick you up on this and it's not personal but I really hate this claim that 7th richest country in the world is important. 7th richest is important when it comes to external affairs such as aid we give, or our potential as a market but internally it's much much less relavent as it's a per capita, or really per capita but then scales for dependency ratios that's important. GDP per capita puts us at 26 but that doesn't take I to account dependency ratio. On top of that GDP can be misleading.
Not saying it's right that people are struggling but people need to understand these basics. 7th richest is meaningless or at least limited meaning
What he said ^, largest economy, not richest.
I thought it was fifth though? US, China, Japan, Germany, UK, France but UK and France are very close and swap positions every now and again. Has India lept up all of a sudden?
Actually, I could just google that
My daughter starts nursery next month, costing £1300/month. This feels like poor timing…
If you are under the age of 40 and don’t have the bank of mum and dad you have no chance in Brexit Britain
I'm in that category as is pretty much everyone who works for me in the uk. Well paid industry and they're all fine.
Fairly low earner here, not looking forward to massively increased fuel bills. On the bright side, my car loan finishes in a couple of months so that’s an extra £227pcm to spend on utilities. 🙄
I wouldn't be supprised if we had the 7th richest poor people in the world..
Is it case of everything being so cheap for the last 10 years?
Food
Loans
Fuel ect
It's all been peged down by global influence especially china. Some people have never know interest rates above 2%
It's going to get hard for people on all different wages.
Buy now pay later really will come home
I thought it was fifth though?
That was pre-Brexit, we dropped a couple of places since then.
I wouldn’t be supprised if we had the 7th richest poor people in the world..
Again, wealth in $ or £ terms is meaningless, plenty of people can survive on a few $ a day in parts of Africa, but you would freeze / starve to death in the UK on that.
You need to look at wealth in terms of what it can buy in your country eg loafs of bread or average rental on a 1 bed flat etc. You could be a millionaire but if a loaf of bread cost £5m you'd still starve to death.