Investment advisers Hargreaves Lansdown issued a press release this morning saying:
Debts cost an average of £406 a month – as arrears mount
The average household spends £406 on monthly debt repayments, excluding the mortgage. Those with mortgages spend an average of £814 on top of this.
Almost one in ten households (9%) are in arrears. Among the lowest fifth of earners this rises to 27%.
One in five people are concerned about their debt position.
Credit card debt is up 12.7% in a year to £68.9 billion and other consumer debt (including loans, overdrafts and car finance) is up 6.7% to £150.4 billion (Bank of England).
The arrears data worries me, as does the increase in credit. But so too does the bigger picture.
There are about 27 million households in the UK. Around £132 billion is being paid by those households a month to service debt interest, exclusion mortgage costs. That is a staggering upward annual redistribution of wealth. And you wonder why I want interest rates to be as low as possible? That’s the reason why. Those without wealth are being exploited by those with it, and that is a recipe for an unstable society, which is exactly where we are heading.
Umm, if households are paying £132 billion a month then those debts are going to be paid off in about 6 weeks. And if the debt burden is 6 weeks of repayments then the debt burden isn’t, not really, something of any great import.
Oh, and of course, the HL numbers are “debt repayment” not interest on debt.
But then I guess the move from accountant to political economist means you don’t have to pay attention to actual numbers any more. Or even reality.
«Debts cost an average of £406 a month »
There’s a nonsense number for you if you please, irrespective of whether it’s HL’s or Captain Potato’s. What’s the denominator and what is included in the numerator?
Is that including people who use a credit card and then pay it off in full each month, so attracting zero interest. Hardly a problem for them.
“The average household spends £406 on monthly debt repayments”
“Credit card debt is up 12.7% in a year to £68.9 billion and other consumer debt (including loans, overdrafts and car finance) is up 6.7% to £150.4 billion (Bank of England).”
“Around £132 billion is being paid by those households a month to service debt interest”
Spud has now corrected that to ‘a year’ rather than ‘a month’ having had the absurdity of his number pointed out to him (what’s a factor of 12 matter anyway?).
But even so, £132 billion interest on debts of £220 billion seems a tad high. I suspect the “£406” includes a chunk of repayment rather than just interest.
But, you know, numbers and accuracy and stuff.
Hey, an order of magnitude is pretty good if you’re a cosmologist. Spud’s numbers have always been co(s)mic.
lol. That includes my family credit card, paid in full every month but on average that’s a few thousand a month. As ISITs notes, the basic ‘does it make sense’ test is failed due to people paying princple off in full every month before interest.
Muppet.
There’s a new media-friendly tax expert in town, Dan Neidle of Tax Policy Associates (est. 2022). He’s a tax lawyer, he’s more media-savvy than Murphy, and he actually knows his stuff. I expect his rise means the relative decline of Murphy.
@Andrew M
Tax Policy Associates is also a ‘not-for-profit’. they “accept no donations, charge no fees, and undertake no commercial work.” which “enables us to remain entirely independent”.
I assume because Neidle made enough during his career to be able to do this.
No need for him to go grubbing around scamming charities for grants.
Neidle and Murphy is a handbags-drawn b1tch fight. Real tax Needle if you will.
I think it is fair to assume Dan Neidle thinks Murphy is a dick and has thought that for a while. For his part Murphy thinks the same about Dan.
Linkedin post from Sept 2023
Dan Neidle
Founder, Tax Policy Associates Ltd. Tax realist.Founder, Tax Policy Associates Ltd. Tax realist.
6mo
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Increased/more effective taxation of wealth is on the agenda. And Richard Murphy claims that wealth is undertaxed by £170bn/year.
One small problem: the figure is nonsense.
Here’s Murphy’s methodology: Wealth increased by £5.8 trillion in 2011-2020, and if we’d taxed this at the same rate as we tax income, that would have raised £170bn/year.
But what is this £5.8 trillion?
ONS data shows that 78% of private wealth is in pensions and property (mostly homes).
The idea we’d tax *increases* in pension and property wealth at 33% is nuts. (Not sales of property, or income from pensions – but paper increases in value). It’s out of the question, economically and politically.
There is no meaningful sense in which wealth was undertaxed by £170bn.”
And a Murphy blog on Dan from 2020, comments are fun!
https://[email protected]/Blog/2020/05/27/mythbusters-theres-been-no-corporate-tax-cut-in-the-uk/
Well this just brought a chortle and brightened my day a bit. I followed Braveheart’s link and rather than wade through Spud’s gibberish I searched “Dan”. The first entry was Spud referencing him before writing his screed, the second was this:
He then gets himself in to a right strop with Andy and Andrew, I guess they have friends who post here.?
>But then I guess the move from accountant to political economist means you don’t have to pay attention to actual numbers any more. Or even reality.
That’s how Paul Krugman rolled when he went from Nobel-winning economist to hack columnist.
Brilliant 2-ball innings from John Cushen over at the dark place.
I nearly boiled my pasta dry laughing.
Two sixes and then out to a block ruled as lbw by the umpire.
Dan Niedle. The name rang a bell ( a bit like Quasimodo). Bloke who outed that cunt Nadhim (“ No mandatory vaccine passports” then 6 months later introduces vaccine passports) Zahawi not paying all the tax on his Yougov.
@Bongo
John Cushen is a colleague of mine. He did wonder if putting “I stand corrected” at the end of a message would mean spud didn’t really read the rest of the message…..