the Austerity Con or Con

[scottycelt]

House prices are rising, mortgage rates must go up at some point, even this government recognises that the impossibility of finding a satisfactory deposit prevents most young people from obtaining a mortgage.

Extract your head and look around, scotty.

Of course house prices will rise and interest rates will go up at some point just as unemployment is falling now! There is such a thing as an 'economic cycle' ... some downturns are more severe than others. These are called 'busts' or recessions. Some upturns are called booms. We are now in a 'recovery' mode which will be welcomed by most 'ordinary people', I expect.

It is certainly more difficult to raise a deposit at the moment but, in truth, we have only returned to conditions which prevailed before lending restrictions in many Western countries were relaxed which was also heavily criticised by some! And as the link (which you carefully ignored) stated , if a mortgage is obtained interest rates are now at a record low. Some of us can remember borrowing rates of around 17% in the 1980s!

If you have the currently unknown secret to provide sensible lending without some restrictions please do advise world financial leaders!

[amateur51]

Of course house prices will rise and interest rates will go up at some point just as unemployment is falling now! There is such a thing as an 'economic cycle' ... some downturns are more severe than others. These are called 'busts' or recessions. Some upturns are called booms. We are now in a 'recovery' mode which will be welcomed by most 'ordinary people', I expect.

It is certainly more difficult to raise a deposit at the moment but, in truth, we have only returned to conditions which prevailed before lending restrictions in many Western countries were relaxed which was also heavily criticised by some! And as the link (which you carefully ignored) stated , if a mortgage is obtained interest rates are now at a record low. Some of us can remember borrowing rates of around 17% in the 1980s!

If you have the currently unknown secret to provide sensible lending without some restrictions please do advise world financial leaders!

Could you share your outstanding ability to grab hold of the wrong end of the stick and wave it around your head, scotty?

The size of the salary/mortgage multiplier is larger than it has ever been and with salaries static at present and house prices on this rise (that this is regarded as one of the stats demonstrating that the economy is back on its feet is frankly staggering!) it will continue its upward climb. Either the banks won;'t lend or they will and it will lead to toxic debt. And so young people (and others) will be forced to rent privately in an already inflated market and claim Housing Benefit, which the government wants to cut back severely.

This not part of some 'natural' cycle; this is the next stage of the dreadful process arising from the banking scandal of 2008 et al. Bankers & politicians of continue to do very nicely thank you.

[teamsaint]

There are plenty of ordinary people I know who are apparently on very nice wages and with which I myself would have been 'over the moon' to have been offered. There are others who are on unbelievably poor wages like cleaners and many shopworkers, for example. In a free society it is difficult to know the solution to this. Some of us just have to accept what our employers are prepared (or can afford) to pay.

My own feeling is that some sort of tax regime which raised the taxes for those better off to facilitate tax rebates for those at the bottom of the heap might be helpful but with these things there are always problems and, of course, the better-off taxpayers won't like that one jot! However if any candidate can come up with a realistic suggestion at the next Election, other than taking to imaginary barricades, he/she may well get my vote.

Talking about being 'over the moon' and money you have a real prospect in Wanyama, team ... he can be a bit lackadaisical at times but he has all the attributes to be a truly great player. It'll be interesting to see how he develops down there in the EPL.

Sorry, I digress ...

No room for slackers under the Saints new regime Scotty...bit like the more general modern workplace.( where the bosses reward them selves with massive pay rises, and the rest slog for peanuts !!)

Tax MIGHT be a way forward....but not holding breath .

[ahinton]

Pensions provision is disintegrating.

It is indeed - but what do you suggest can be done about this? If pension funds invest in the wrong firms, they'll do badly. They tend not to invst in small ones for the most part because that's too risky, but if large ones don't come up with the goods, those funds will suffer, as will in turn the future pensioners who entrust their contributions to them. I would be more inclined to say that pension provision is on the way out altogether. I simply do not see how pension provision can have much of a future at all.

[amateur51]

It is indeed - but what do you suggest can be done about this? If pension funds invest in the wrong firms, they'll do badly. They tend not to invst in small ones for the most part because that's too risky, but if large ones don't come up with the goods, those funds will suffer, as will in turn the future pensioners who entrust their contributions to them. I would be more inclined to say that pension provision is on the way out altogether. I simply do not see how pension provision can have much of a future at all.

I remember only too well how Mrs Thatcher sold us all the idea of private pensions - and what a swizz that turned out to be

[scottycelt]

Could you share your outstanding ability to grab hold of the wrong end of the stick and wave it around your head, scotty?

The size of the salary/mortgage multiplier is larger than it has ever been and with salaries static at present and house prices on this rise (that this is regarded as one of the stats demonstrating that the economy is back on its feet is frankly staggering!) it will continue its upward climb. Either the banks won;'t lend or they will and it will lead to toxic debt. And so young people (and others) will be forced to rent privately in an already inflated market and claim Housing Benefit, which the government wants to cut back severely.

This not part of some 'natural' cycle; this is the next stage of the dreadful process arising from the banking scandal of 2008 et al. Bankers & politicians of continue to do very nicely thank you.

Banks are lending ... that's what they tend to do, amsey. The only difference is that now they are rather more careful in their lending, which is hardly surprising following the 'banking crisis' of 2008 to which you refer. This global financial crisis originated from sub-prime mortgage lending in the US which got completely out of control and, as we all know, resulted in taxpayers money having to be used to save the major banks from collapsing in the UK.

Plenty of people can (and do) borrow without it leading to 'toxic debt'. The banks are now being more careful to whom they lend if only that they are now forced to by governments and simple reality.

It wasn't just banks who were responsible for the crisis but also 'ordinary people' who presumably willingly accepted the terms and conditions of their borrowing, including likely changes in interest payments. Unless you consider that 'ordinary people' are not capable of making financial decisions for themselves?

I'm sure they can ... it's just that 'ordinary people' like you and I can also make some very bad and foolish decisions in life just like our "extraordinary" counterparts, the politicians and bankers!

[amateur51]

Banks are lending ... that's what they tend to do, amsey. The only difference is that now they are rather more careful in their lending, which is hardly surprising following the 'banking crisis' of 2008 to which you refer. This global financial crisis originated from sub-prime mortgage lending in the US which got completely out of control and, as we all know, resulted in taxpayers money having to be used to save the major banks from collapsing in the UK.

Plenty of people can (and do) borrow without it leading to 'toxic debt'. The banks are now being more careful to whom they lend if only that they are now forced to by governments and simple reality.

It wasn't just banks who were responsible for the crisis but also 'ordinary people' who presumably willingly accepted the terms and conditions of their borrowing, including likely changes in interest payments. Unless you consider that 'ordinary people' are not capable of making financial decisions for themselves?

I'm sure they can ... it's just that 'ordinary people' like you and I can also make some very bad and foolish decisions in life just like our "extraordinary" counterparts, the politicians and bankers!

You misrepresent history scotty. The banks had billions of pounds pumped into them time after time before they'd start lending again. Most of it went into bolstering their capital assets so that they could meet EU banking criteria. Once again, the shareholders and the directors got off without penalty.

When ordinary people had tried to do the same , by increasing their personal borrowing, the banks had offered them substantial increases in their credit card borrowing which they gladly took on the basis of "well they wouldn't be offering it to me if they didn't think that I could manage it". They even sold us insurance just in case we lost our jobs or fell ill and couldn't make the repayments. This turned out to be a big mistake because we misunderstood the nature of this insurance and they've had to spend millions in processing the repayments for these illegal charges. Who knew? This,for once, was a case of the banks havng to put their hands into their own pockets. They won't make that mistake again. Will they? The share-holders won't like it if they do

[ahinton]

I remember only too well how Mrs Thatcher sold us all the idea of private pensions - and what a swizz that turned out to be

If you'll forgive me for so saying, I don't think that this addresses the issue that I raised. Pensions were around long before Thatcher - and what pensions are there or have there ever been other than "private" ones? Where's the money supposedly coming from to pay, for example, the pensions of those who have worked solely or partly in the public sector other than from investment in the markets? Pensions are all about market investment; without successful investment - i.e. investment that produces growth - how can any pension scheme work, either for a public sector employee, a private sector employee, an employee of both sectors or a self-employed person? The UK government has never invested in pensions for anyone and, in so saying, I do not seek to criticise it for its neglect in so doing, for that is, I think, neither one of its duties as a government nor something in which the electorate ought to expect it to have and use the financial services expertise without which there can be no such thing as "pensions". A pension is, broadly speaking, just one of a range of savings plans designed to help working people save for an income in retirement; one of its unique facilities is the tax relief given to contributors on their contributions that government hopes eventually to pull back on taxing the pension when vested and in payment. How can such pensions possibly be achieved without prudent and successful investment in the market place?

[Serial_Apologist]

If you'll forgive me for so saying, I don't think that this addresses the issue that I raised. Pensions were around long before Thatcher - and what pensions are there or have there ever been other than "private" ones? Where's the money supposedly coming from to pay, for example, the pensions of those who have worked solely or partly in the public sector other than from investment in the markets? Pensions are all about market investment; without successful investment - i.e. investment that produces growth - how can any pension scheme work, either for a public sector employee, a private sector employee, an employee of both sectors or a self-employed person? The UK government has never invested in pensions for anyone and, in so saying, I do not seek to criticise it for its neglect in so doing, for that is, I think, neither one of its duties as a government nor something in which the electorate ought to expect it to have and use the financial services expertise without which there can be no such thing as "pensions". A pension is, broadly speaking, just one of a range of savings plans designed to help working people save for an income in retirement; one of its unique facilities is the tax relief given to contributors on their contributions that government hopes eventually to pull back on taxing the pension when vested and in payment. How can such pensions possibly be achieved without prudent and successful investment in the market place?

The problem is the unregulated nature of the global market, really just a super casino for spivs to play with the wealth created by others, being the only place pensions inventment can take place, there being no alternative. But if I read Ams's message correctly, he was in fact referring to contracted out pension schemes - in which I myself was one of those duped, ending up with the pension that I am now on being half that which it would have given me had I stayed in-house with the scheme operated by my then-employer. And even the pension which I am on is now paying out less than it was when I reached retirement age just under 3 years ago.

[ahinton]

The problem is the unregulated nature of the global market, really just a super casino for spivs to play with the wealth created by others, being the only place pensions inventment can take place, there being no alternative. But if I read Ams's message correctly, he was in fact referring to contracted out pension schemes - in which I myself was one of those duped, ending up with the pension that I am now on being half that which it would have given me had I stayed in-house with the scheme operated by my then-employer. And even the pension which I am on is now paying out less than it was when I reached retirement age just under 3 years ago.

Perhaps you're right that Ams was writing about that but I'm still not sure that it's all that different, really, in that, although many of the contracted-out pension schemes have indeed left contributors worse off than they'd have been with in-house employers' schemes the days of the final salary scheme are more or less over and many employers are now struggling to afford to offer pension schemes of any kind; you refer to the "supercasino" aspect of some of this, but isn't all saving for hoped-for retirement - be it in pension schemes or otherwise - dependent upon that? For any long-term savings scheme to yield a decent income in "retirement" (if any), there has to be investment growth in the fund and that cannot be done without careful and skilled playing in the market place. The government dos not (and indeed should not) try to offer any such schemes as such, but NS&I - which is a government backed organisation - does the same as do pensions and other savings schemes with depositor's monies by playing the markets with them.

Whilst your initial argument here is that the situation is affected adversely in many cases by inadequate regulation of the global financial services markets, it occurs to me that, even if bombproof and watertight regulation of such markets were to be achieved internationally, savings schemes of all kinds would still remain subject to the vagaries of the markets and the skill sets of the investors.

[amateur51]

The problem is the unregulated nature of the global market, really just a super casino for spivs to play with the wealth created by others, being the only place pensions inventment can take place, there being no alternative. But if I read Ams's message correctly, he was in fact referring to contracted out pension schemes - in which I myself was one of those duped, ending up with the pension that I am now on being half that which it would have given me had I stayed in-house with the scheme operated by my then-employer. And even the pension which I am on is now paying out less than it was when I reached retirement age just under 3 years ago.

Thanks for spotting where my post needed to be clarified, S_A

[Serial_Apologist]

Thanks for spotting where my post needed to be clarified, S_A

A very good post, mind!