Credit deflation and the reflation cycle to come (part 2)

[DoINeedOne]

1 hour ago, Noallegiance said:

As a southerner I have a strong affinity for 'my town' and having lived here all my life my friends and family are here. Part of my identity is here.

To be forced into buying a box with windows 300 miles away just so I've got my own box with windows doesn't compensate.

Same whilst there are some place i likes outside the south - But i just think im going move that far away from friends and family i might as well go abroad 

[Yadda yadda yadda]

1 hour ago, feed said:

Hold on, who has been getting %5 pay rises.

EARN02 Average Weekly Earnings - Not Seasonally Adjusted - Growth Excluding bonuses, Including arrears                    
All figures are percentages (%)                    Growth Rates : per cent change year on year
 

	Whole Economy	Private Sector	Public Sector
	Single month growth	Single month growth	Single month growth
2019 Jan	3.7	3.9	2.7
2019 Feb	3.2	3.5	2.2
2019 Mar	3.3	3.5	2.8
2019 Apr	3.9	3.7	4.7
2019 May	3.8	3.8	3.8
2019 Jun	4	4.1	3.4
2019 Jul	3.7	3.8	3.2
2019 Aug	3.3	3.6	1.8
2019 Sep	3.7	3.6	3.7
2019 Oct	3.3	3.2	3.4
2019 Nov	3.2	3.1	3.2
2019 Dec	3.1	3.1	3.3
2020 Jan	2.8	2.8	3
2020 Feb	2.8	2.6	3.5
2020 Mar	2.3	2.1	2.9
2020 Apr	-0.2	-0.9	2.8
2020 May	-0.3	-1.4	4.4
2020 Jun	-0.2	-1.4	4.5
2020 Jul	1	0.2	4.1
2020 Aug	1.9	1.5	3.7
2020 Sep	3.1	2.5	5.2
2020 Oct	3.8	3.5	4.6
2020 Nov (r)	4.4	4.2	4.8

 

If we do get price inflation its going to take 18 months for that to flow through to wages and frankly once furlough ends and we start to see the real job loses and redundancy.  I don't imagine many people in the private sector will be seeing much of an pay rise.  

Put it another way, i'm well inside the 40%.  This is going to make sweet fa difference to the 1.6% for 2 years i just received.  

Public sector, that may be different story  

 

data source: ttps://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/averageweeklyearningsingreatbritain/latest

 

No-one has been getting 5% wage rises outside of niche industries or skills. That will change if inflation gets high enough.

Your other point about unemployment and thus a reserve army of the unemployed only applies if the unemployed have the skills required. If the newly unemployed were shop and hospitality workers they're not going to drag down wages in other sectors. If it is more broad based they will. Most people can't afford to train themselves up and employers won't do it.

[DurhamBorn]

2 hours ago, Harley said:

That'll be regressive, hitting the worst off the hardest.  Going to hit the well paid another way or just seeking to sow more discord?

So much he can do to target where the money is and is being drained from society - the wealthy and the public and third sectors - above all just less governance - so not going to happen!

We get more of this BS instead.

We can work around stuff like that,but its disgusting if true.Imagine freezing the allowance for minimum wage workers,yet boosting Free money Universal credit by £20 a week,the optics are terrible for a Tory cough government.It could be a front though  in that they intend to freeze the higher rate,and are just looking like they are going to freeze the lower rate.Red wall Mps might kiss their seats goodbye if he does.

Im really waiting for the budget to decide how to structure my partners savings.She has enough in Sipp to retire at 56 and draw it all down for 11 years then a final salary council pension.It might be worth her leaving the council and going part time now as she would get almost exactly the tax allowance .

[Talking Monkey]

14 hours ago, ThoughtCriminal said:

You just gave me a great idea for a sideline.......... 

 

Anyone need someone "scared" with a fake kidnapping? 

I'll PM you😁

[Yadda yadda yadda]

19 minutes ago, DoINeedOne said:

Same whilst there are some place i likes outside the south - But i just think im going move that far away from friends and family i might as well go abroad 

Yes, get better weather and a low(er) cost of living.

[Castlevania]

24 minutes ago, Yadda yadda yadda said:

I saw a program on 1970s New York. The Bronx was burning down day by day. There was a clip of a cop being asked if he thought the Bronx had a future. No was the answer. Probably the perfect time to buy, from an investment point of view. There literally was blood on the streets.

Major cities were depopulating through the 70s. Certainly New York and London. Could well get a repeat.

 

The Warriors could be a documentary of how lawless New York was back then

[BoSon]

2 minutes ago, Castlevania said:

The Warriors could be a documentary of how lawless New York was back then

I don't think the real NY was so camp, what with the leather gilets, baseball fans in makeup, and riding around with milkbottles instead of uzis.

 

[Yadda yadda yadda]

9 minutes ago, DurhamBorn said:

We can work around stuff like that,but its disgusting if true.Imagine freezing the allowance for minimum wage workers,yet boosting Free money Universal credit by £20 a week,the optics are terrible for a Tory cough government.It could be a front though  in that they intend to freeze the higher rate,and are just looking like they are going to freeze the lower rate.Red wall Mps might kiss their seats goodbye if he does.

Im really waiting for the budget to decide how to structure my partners savings.She has enough in Sipp to retire at 56 and draw it all down for 11 years then a final salary council pension.It might be worth her leaving the council and going part time now as she would get almost exactly the tax allowance .

Fully agree that it is disgusting to tax the average worker more. Their one good policy has been raising the personal allowance. Especially as it reduces tax credits.

Could be that they're only going to squeeze the higher rate. Or freeze for one year only at the lower rate. They do like to say this will be bad and then only do half the bad stuff.

[working woman]

@MrXxx "Agree, can never understand why Southerners are so `locked` into this, can only assume its something to do with `keeping up with appearances`/with what others think".

I can probably give a few good insights into the reasons.

I'm a Southerner (Heart is in the South West)  have moved around the South and Midlands a lot - Childhood (Wiltshire and Torquay), my 20's in London, 2 yrs in Leicester, met husband, a Londoner so 7 years back in London, 3 years in Northamptonshire for my work, a move to Bristol as my husband went to Uni as a mature student. Currently living just south of Bristol.

Why don't Londoners move North? Many would like to leave London but worry that if they want to move back, they couldn't afford it.  They are correct. My husband and I left and couldn't afford to move back now. His parents left for a few years to look after their parents in the Midlands. They had sold a house in London, but when moved back could only afford a flat.

If Londoners do leave for somewhere cheaper, they go to pretty coast areas not far from London eg Dorset, cities like Bristol if they still want city life, that also has access to Devon and Cornwall.  If WFH is allowed to continue, it will encourage Londoners to move out of London. 

I enjoyed living in Northamptonshire, not so much Leicester, the counytryside, villages and country pubs are beautiful in Northants but I felt landlocked. I loved days trips to nearby Norfolk and it's coast. I never felt at home in the Midlands, there is a strong accent which always reminded me that I never came from there.  In Norfolk, there is a country accent, wierdly a bit like the South West, so I feel comfortable there.  

For the rest of us Southerners, if they are anything like me, it is probably the call of the sea and the south coast. I live near the cross of the M4 and M5 near Bristol, so have easy access down to the Devon and Cornwall coast, across to South Wales and it's beautiful coastal areas like the Gower and Pembrokeshire, up towards the Cotswolds, 2 hrs east to visit my husbands parents in London and fairly easy access down to the south coast and Dorset etc.  It is a fantastic location. The view from my window is of the estuary and I am a 5 minute walk from a beach.

Here is the interesting bit.

Age 17, my sister moved from Devon up to County Durham and has been there for 35 years. My neice, her daughter lives North of Newcastle. I have visited many times and loved the wildness of Northumbria and it's coast and have been taken to the local seaside towns. My husband and I like moving around and have thought many times about moving up there for a while, but do you know what stops us? It is colder.  Where we live, we get lots of rain, but over the years my sister always tells me about the cold and the snow and sends me photos. Probably trying to put me off moving up there

We are currently thinking of moving again, and are considering a bit further down the M5 in Somerset, maybe back to Torbay or Norfolk or Kent. All coastal areas. We would still have to work. I may also look again at the North East as my sister lives there. I keep telling my husband he could retire earlier if we move to the North East, but he isn't keen. What we would really love is to live on a canal boat and move around and have recently done a lot of research on that. Guess what puts me off?  You lot saying fuel will go through the roof over the next 10 years. No point having a canal boat if you can't afford the fuel  

[ThoughtCriminal]

46 minutes ago, MrXxxx said:

must admit I couldn't be 'doing' with any of that gravy on chips nonsense thought! :-)

No gravy on chips? 

 

You bloody southerners and your fancy ways. 🙄😂

[supernaut]

28 minutes ago, DoINeedOne said:

Same whilst there are some place i likes outside the south - But i just think im going move that far away from friends and family i might as well go abroad 

Up north is a possibility for me with abroad not out of the question.

My problem is my long term girlfriend will not really consider it even tho she seems to understand the financial milestone that living in Surrey is. 

I think it helps her knowing she will most likely inherit very nicely where as I will not so have always thought about my future from my own endeavours.

I feel if I do make the move away it will be on my own .

[DurhamBorn]

@working woman i actually think the north east and south west are very similar even though so far apart,both beautiful areas and coasts ,where of course the north east has a few big industrial areas and rougher areas.The difference like you say is weather,it does get cold up here.There are lots of southerners moving here,immigrants and welfare scroungers mostly ,but also some who its obvious have sold up and retired up here in their 40s and 50s.

[ThoughtCriminal]

10 minutes ago, working woman said:

@MrXxx

Here is the interesting bit.

Age 17, my sister moved from Devon up to County Durham and has been there for 35 years. My neice, her daughter lives North of Newcastle. I have visited many times and loved the wildness of Northumbria and it's coast and have been taken to the local seaside towns. My husband and I like moving around and have thought many times about moving up there for a while, but do you know what stops us? It is colder.  Where we live, we get lots of rain, but over the years my sister always tells me about the cold and the snow and sends me photos. Probably trying to put me off moving up there 

Colder?

 

I'm having to try really hard to avoid inserting a soft southern b*stard joke here 😆😉

 

 

[ThoughtCriminal]

7 minutes ago, supernaut said:

Up north is a possibility for me with abroad not out of the question.

My problem is my long term girlfriend will not really consider it even tho she seems to understand the financial milestone that living in Surrey is. 

I think it helps her knowing she will most likely inherit very nicely where as I will not so have always thought about my future from my own endeavours.

I feel if I do make the move away it will be on my own .

Unsolicited advice, so feel free to tell me to Shove it, but I was in a similar position once and ultimately it made me realise that my path lay elsewhere. 

 

Worth thinking which road you need to be on. 

[MrXxxx]

1 hour ago, feed said:

Add;

Finding a job, or more likely finding two.  Possibly needing to find a school.  And finding that property with decent access to work and schools still commands a premium.  As well as the transaction costs of selling, buying and moving.  

i've no kids, grew up in yorkshire and moving from essex to n yorks is something i'll ultimately do, but it's not particularity easy. 

 

But that's the point @feed if your move up North allows you to become mortgage free you don't need a job or could do a bit of minimum wage/Ebay business...as for schools, admittedly I don't venture North of Watford much but I think they still have them up there :-)

[Talking Monkey]

54 minutes ago, DurhamBorn said:

Exactly as its the best way to inflate debt away.More and more on benefits above the tax threshold paying no tax.The incentive to work being destroyed more and more.

That's some trade off DB as he'll end up with one disfunctional society as huge numbers are disincentivised to work. I get the impression it all falls over at some point, I guess that's the end cycle at the end of the decade.

[BoSon]

3 hours ago, AWW said:

They also seem to have snuck in a change to shared ownership rules. Minimum share you can buy has dropped from 25% to 10%, with as little as 10% deposit. People who actually sign up for this will own 1% of their property, but be liable for 100% of the costs.

Lambs will still attend the slaughter though, because owning (1% of) your own home is a "dream".

Could it be seen as a more stable form of long term renting, no risk of being evicted at short notice as long as keep up the payments, with the added bonus of not needing to ask the landlord whenever they want to spruce the place up?

Newbuilds still come with 10 year building guarantee against any major issues and insurance would cover the rest, so the costs may not be a real worry in the medium term?

Seems for some areas there is little other choice for those on low pay if they don't want to rent and don't want to move to cheaper areas of the country as they are cheap for a reason.

[working woman]

5 minutes ago, ThoughtCriminal said:

Colder?

 

I'm having to try really hard to avoid inserting a soft southern b*stard joke here 😆😉

 

 

I know, I'm a wimp.

It must run in my family. I have family in Australia, they love it when the temperature is in the 30's and then moan like hell when they have a "cold spell". I ask them what the temperature is  22 degrees.! When it gets "really cold", down to 15, they sit in their house with their coats on  I'm sure they just tell me this to wind me up. If my Aunty comes to the UK and it rains, she cries.

[MrXxxx]

1 hour ago, JREWING said:

Personal Allowance - £12500

CGT Allowance - £12300

Dividend Allowance - £2000

Total Tax free income - £26800

You can earn currently £46300, and pay only £3400 in tax; so you tax rate is 7.35%

Income from work, savings interest and dividends combined must not exceed £16000, and you then can earn £30300 in capital gains from shares and only pay £3400 in tax.

Income combined from work, savings interest, dividends and capital gains above £46300 is taxed at 20%.

If your income from work, savings interest and dividends combined does exceed £16000, all income from capital gains on shares up to and beyond is taxed at 20%.

This got me thinking [what I like about this site]. Say you have a DC pension and start to draw down, the firsts 25% is tax free so you balance your withdrawal to make sure you are just under the personal tax allowance of £12500 [so with 25% TF = about £16500 pa]. Might it be a better way to transfer the DC pension to a SIPP; no tax charged, and then every year sell off sufficient stocks to cover both the PA and CGT allowance, so giving you a combined TF sum of £24500?

Have I got this right?

[ThoughtCriminal]

18 minutes ago, Talking Monkey said:

That's some trade off DB as he'll end up with one disfunctional society as huge numbers are disincentivised to work. I get the impression it all falls over at some point, I guess that's the end cycle at the end of the decade.

Has the air of last days of Rome to me. 

[ThoughtCriminal]

3 minutes ago, MrXxxx said:

This got me thinking [what I like about this site]. Say you have a DC pension and start to draw down, the firsts 25% is tax free so you balance your withdrawal to make sure you are just under the personal tax allowance of £12500 [so with 25% TF = about £16500 pa]. Might it be a better way to transfer the DC pension to a SIPP; no tax charged, and then every year sell off sufficient stocks to cover both the PA and CGT allowance, so giving you a combined TF sum of £24500?

Have I got this right?

There's no effing wonder so many people work cash in hand when you have to jump through hoops like this to avoid being dry bummed by the taxman

[MrXxxx]

1 hour ago, DoINeedOne said:

Same whilst there are some place i likes outside the south - But i just think im going move that far away from friends and family i might as well go abroad 

To a certain extent you may be right...if your F&F live near a major city and you pick your overseas city right it may even be quicker [and possibly cheaper] to fly in and visit....I had exactly this scenario when working overseas and visiting my Father.

[MrXxxx]

1 hour ago, Yadda yadda yadda said:

No-one has been getting 5% wage rises outside of niche industries or skills. That will change if inflation gets high enough.

Your other point about unemployment and thus a reserve army of the unemployed only applies if the unemployed have the skills required. If the newly unemployed were shop and hospitality workers they're not going to drag down wages in other sectors. If it is more broad based they will. Most people can't afford to train themselves up and employers won't do it.

My employer didn't give a yearly inflation rise this year, but said they would reinstate it next year. A colleague said "Oh well, its only a year" until I explained compounding and the fact that the % from this years increase on his salary also had to be earnt, so if future rises were inflation only he would never get it back.

[ThoughtCriminal]

It's all getting a bit "North Vs South" on here, so in the interests of repairing relations, here's a newly discovered ancient map of Britain drawn up by the vikings. 

 

This should cool things down. 👍😉

 

Just a bit of Sunday banter in case anyone is easily offended. We're all just English. 😘

[working woman]

@DurhamBorn Thank you for your advice, I will take another look and crunch the numbers.  I have two lovely nieces that I hardly see, so it would be nice to see more of them as well as my sister.

Re the cold, I should stop being such a wimp and just buy some thermals for the cold and a wet suit for the sea - sorted.