Re: Wonga and moral hazard? : Sat Oct 11, 2014 7:18 am  

Standee wrote:

Should be simple, Mortgage, 3.5 x time salary (joint or sole)
Repayments are affordable below 15% of monthly income
All other debts taken into account

it's about affordability

You are going to have a serious financial crash if you apply the 15% rule, the only thing that keeps financial businesses in business is lending to others, pull the plug on lending and the whole house of cards will collapse.

3.5xjoint salary is fine, it worked in the past, in fact when I took out my second mortgage it was 3x my salary plus the wifes (not 3x hers), so back in 1985 property was affordable at those rates and from memory our repayments were around 40 to 50% of our joint income which again was affordable.

As for all other debts taken into account, it applies now with the applicants "affordability test", the only debt not being thrown in the pot being student loans - if you include that then again we are all screwed as for most its the second largest debt in their lifetime.

Re: Wonga and moral hazard? : Sat Oct 11, 2014 8:30 am  

cod'ead wrote:

What a pity governments (of whatever hue), over the years have failed to promote the benefits of local credit unions. They seem to work well in the US but although there are a few here, they really are few and far between

there are actually a lot of CU's in England and Scotland, I've spent the last 10 years or so working with them on affordable credit, and setting up sinking funds (which is basically a saving scheme but someone else can access it for specific costs) The thing with CU's is they are ethical, so they won't lend you £500 for a holiday, they only (usually) lend against a debt (ie:rent arrears), the fact that LA's aren't using hardship funds correctly is also a concern.

Whilst places like BrightHouse et al exist, we have a problem. But it's cultural, people believe they have a "right" to a 56" TV, PS4 and a new Sofa, so they get them, they pay £10 deposit and then £12.50 a week for the next 20 years, but after 4, they think "I have a right to a new TV, and a PS6", and they get them, with £20 deposit and £22.50 a week for the next 22 years. Soon, because of low income, they have £35 a week coming out on credit, £80 on rent, £40 on Council Tax, don't forget, they all "have a right" to run a car, so that is £50 a week, plus food, clothes etc. Suddenly the £300 a week they earn is reduced to £95 (ish) of disposable income. Or around £10000 a year, but that gets pi55ed up the wall and blown out in smoke.

I know I sound boring, I don't think Wonga are a moral business, but I do think people need to take personal responsibility as well.

Re: Wonga and moral hazard? : Sat Oct 11, 2014 9:31 am  

Standee wrote:

Whilst places like BrightHouse et al exist, we have a problem. But it's cultural, people believe they have a "right" to a 56" TV, PS4 and a new Sofa, so they get them, they pay £10 deposit and then £12.50 a week for the next 20 years, but after 4, they think "I have a right to a new TV, and a PS6", and they get them, with £20 deposit and £22.50 a week for the next 22 years. Soon, because of low income, they have £35 a week coming out on credit, £80 on rent, £40 on Council Tax, don't forget, they all "have a right" to run a car, so that is £50 a week, plus food, clothes etc. Suddenly the £300 a week they earn is reduced to £95 (ish) of disposable income. Or around £10000 a year, but that gets pi55ed up the wall and blown out in smoke.

I know I sound boring, I don't think Wonga are a moral business, but I do think people need to take personal responsibility as well.

Nail on head..in a massive way, problem is that parents sometimes filter down their own bad habits as if it is a chalice to be passed on, almost a right of passage to screw over a company or worse LA out of money
Social responsibilities and how to take those responsibilities on as well as the outcomes for failing to do so are another aspect of life that I think is much overlooked in schools. Because if they don't give the kids some idea of what's it is really like out there and what the expectation should be to be a responsible citizen in society & give them practical tools to go out and achieve that (because in many cases that just isn't going to come from their parents) the tide of the failing society that surrounds us will continue to roll in.

Re: Wonga and moral hazard? : Sat Oct 11, 2014 9:54 am  

knockersbumpMKII wrote:

Nail on head..in a massive way, problem is that parents sometimes filter down their own bad habits as if it is a chalice to be passed on, almost a right of passage to screw over a company or worse LA out of money
Social responsibilities and how to take those responsibilities on as well as the outcomes for failing to do so are another aspect of life that I think is much overlooked in schools. Because if they don't give the kids some idea of what's it is really like out there and what the expectation should be to be a responsible citizen in society & give them practical tools to go out and achieve that (because in many cases that just isn't going to come from their parents) the tide of the failing society that surrounds us will continue to roll in.

but the problem is, some people keep on wanting you and I to pay for the work shy and feckless to have their bright house TV's and state subsidised housing. The Welfare State was the worst idea ever. I agree with helping people who fall on hard times, but when you see people who have never worked, popping kids out like shelling peas and STILL buying the latest TV, you have to question that.

Re: Wonga and moral hazard? : Sat Oct 11, 2014 10:08 am  

AS both the above posters are from Hull, This PDF, detailing the history of The Hull Savings Bank might prove of interest. When I was at Villa Place infants & junior school, each Monday morning, immediately after assembly, it was time for "Banking". We would line up and the class teacher would then take our "bank money" from us and enter it onto a card. Once we had saved a whole £, we were then given a "proper" black bankbook. All this was in collaboration with the local authority Education Department and the Hull Savings Bank (TSB). We could see our savings growing, "interest" was simply "free money" as a bonus to us kids. It was a great thrill to go to the "proper" bank and withdraw my money for holidays or christmas etc. It was a simple and yet effective means of instilling a culture of saving from an early age. Go and open a kids' bank account now and the very last thing you can expect is a bank book, so the kids can see where their money is.

AS both the above posters are from Hull, This PDF, detailing the history of The Hull Savings Bank might prove of interest. When I was at Villa Place infants & junior school, each Monday morning, immediately after assembly, it was time for "Banking". We would line up and the class teacher would then take our "bank money" from us and enter it onto a card. Once we had saved a whole £, we were then given a "proper" black bankbook. All this was in collaboration with the local authority Education Department and the Hull Savings Bank (TSB). We could see our savings growing, "interest" was simply "free money" as a bonus to us kids. It was a great thrill to go to the "proper" bank and withdraw my money for holidays or christmas etc. It was a simple and yet effective means of instilling a culture of saving from an early age. Go and open a kids' bank account now and the very last thing you can expect is a bank book, so the kids can see where their money is.

Re: Wonga and moral hazard? : Sat Oct 11, 2014 10:11 am  

cod'ead wrote: AS both the above posters are from Hull, This PDF, detailing the history of The Hull Savings Bank might prove of interest. When I was at Villa Place infants & junior school, each Monday morning, immediately after assembly, it was time for "Banking". We would line up and the class teacher would then take our "bank money" from us and enter it onto a card. Once we had saved a whole £, we were then given a "proper" black bankbook. All this was in collaboration with the local authority Education Department and the Hull Savings Bank (TSB). We could see our savings growing, "interest" was simply "free money" as a bonus to us kids. It was a great thrill to go to the "proper" bank and withdraw my money for holidays or christmas etc. It was a simple and yet effective means of instilling a culture of saving from an early age. Go and open a kids' bank account now and the very last thing you can expect is a bank book, so the kids can see where their money is. Yup, and did you know it was the founder of ARCO that convinced the Bank (Yorkshire Penny Bank, as was) that there was no reason to charge him if he was in credit, the original "free banking" Nobody is encouraged to save anymore, even ISAS's are a con, poor interest rates and a poor deposit limit. I don't have the answer, before anyone asks

cod'ead wrote: AS both the above posters are from Hull, This PDF, detailing the history of The Hull Savings Bank might prove of interest. When I was at Villa Place infants & junior school, each Monday morning, immediately after assembly, it was time for "Banking". We would line up and the class teacher would then take our "bank money" from us and enter it onto a card. Once we had saved a whole £, we were then given a "proper" black bankbook. All this was in collaboration with the local authority Education Department and the Hull Savings Bank (TSB). We could see our savings growing, "interest" was simply "free money" as a bonus to us kids. It was a great thrill to go to the "proper" bank and withdraw my money for holidays or christmas etc. It was a simple and yet effective means of instilling a culture of saving from an early age. Go and open a kids' bank account now and the very last thing you can expect is a bank book, so the kids can see where their money is. Yup, and did you know it was the founder of ARCO that convinced the Bank (Yorkshire Penny Bank, as was) that there was no reason to charge him if he was in credit, the original "free banking" Nobody is encouraged to save anymore, even ISAS's are a con, poor interest rates and a poor deposit limit. I don't have the answer, before anyone asks

Re: Wonga and moral hazard? : Sat Oct 11, 2014 11:55 am  

Standee, who wants to tell everyone how to live their lives it seems, STILL will not answer questions.

What is it with right wing dogma driven people?

Do they REALLY lack the ability answer straight forward questions?

Re: Wonga and moral hazard? : Sat Oct 11, 2014 12:22 pm  

Leaguefan wrote:

Standee, who wants to tell everyone how to live their lives it seems, STILL will not answer questions.

What is it with right wing dogma driven people?

Do they REALLY lack the ability answer straight forward questions?

ask a question not based on dogma and I will reply, YOU are part of the problem.

Re: Wonga and moral hazard? : Sat Oct 11, 2014 12:32 pm  

Standee wrote:

but the problem is, some people keep on wanting you and I to pay for the work shy and feckless to have their bright house TV's and state subsidised housing. The Welfare State was the worst idea ever. I agree with helping people who fall on hard times, but when you see people who have never worked, popping kids out like shelling peas and STILL buying the latest TV, you have to question that.

Or take a circular route...

Taxation from those who are above the limits to claim tax credits goes into the treasury through one door and then back out through another door to be handed out in benefits, a majority of which goes to working people who earn less than what is considered to be a level at which they can sustain themselves - we're halfway round the circle now.

Because the vast majority of these people are just regular folk like the rest of us they use the money to buy things with, food, maybe alcohol, maybe tobacco, they use it to pay their rent, their council tax and they use it to pay their utility bills and sometimes they pop down to Brighthouse and buy the despised 50" TV sets that they will never pay off in their lifetime - and the likes of Brighthouse make good profits and they employ people to work in their stores, some of whom probably claim in-work benefits, and Brighthouse pay employers contribution and corporate tax and the companies they buy their stock from do the same and their employees pay tax and those companies pay employers contributions and corporate tax and on, and on, and the circle of income, expenditure and taxation is complete.

And the ONLY time that any of this money leaks out of the UK economy is when multi-national corporations do not pay the corporate tax on their UK earnings and squirrel it abroad somewhere.

What goes around comes around, and around, and around...

Re: Wonga and moral hazard? : Sat Oct 11, 2014 1:02 pm  

JerryChicken wrote:

Or take a circular route...

Taxation from those who are above the limits to claim tax credits goes into the treasury through one door and then back out through another door to be handed out in benefits, a majority of which goes to working people who earn less than what is considered to be a level at which they can sustain themselves - we're halfway round the circle now.

Because the vast majority of these people are just regular folk like the rest of us they use the money to buy things with, food, maybe alcohol, maybe tobacco, they use it to pay their rent, their council tax and they use it to pay their utility bills and sometimes they pop down to Brighthouse and buy the despised 50" TV sets that they will never pay off in their lifetime - and the likes of Brighthouse make good profits and they employ people to work in their stores, some of whom probably claim in-work benefits, and Brighthouse pay employers contribution and corporate tax and the companies they buy their stock from do the same and their employees pay tax and those companies pay employers contributions and corporate tax and on, and on, and the circle of income, expenditure and taxation is complete.

And the ONLY time that any of this money leaks out of the UK economy is when multi-national corporations do not pay the corporate tax on their UK earnings and squirrel it abroad somewhere.

What goes around comes around, and around, and around...

Those people should accept the fact they do not have the income to own the TV, and not have a facility to buy.