Living on the never never

As a nation we have deceived ourselves in believing that we could go on spending beyond our means. We have allowed consumerism to become our idol, no matter whether we had the income or not, a credit card was always there to feed our need for instant gratification. Why wait when you can have it now- instant credit, buy now pay later was the cry. With such an environment why bother to save. The result we have the highest level of household debt at 160% of national income, higher than Europe higher than the US.

One of the underlying causes of the credit crunch was the huge borrowing by the West from the likes of China, to finance our lifestyles and property bubble.

What is really disappointing in the Government’s response to the economic crisis is there has been no recognition of this. The government boasted that it had presided over 10 years of uninterrupted economic growth. The truth is a good part of this has been fuelled by debt. Its response to the bust has totally ignored the personal debt issue and the misery that uncontrolled debt can be become. Where is the encouragement to rebuild savings? Interest rates are at their lowest ever, tax relief on pensions for the more highly paid is being restricted and the implementation of the new National Pension Savings Scheme is being delayed so that it won’t be in force for all until 2017. … Continue Reading