16 million Brits have less than £100 in savings

[Butterfingers]

http://www.bbc.co.uk/news/business-37504449

In five regions of the UK more than 50% of adults have savings of less than £100. It's easy to be judgmental, but times are really tough if you're a 50-year-old former steel worker from Sunderland, living hand-to-mouth on a zero-hours contract.

It's the kind of statistic that makes me pretty nervous about the near future in the UK. Large segments of the population have little to lose, as we saw in the Brexit vote.

[alsoknownasDean]

Wow, making just £13k a year? Do they not have a minimum wage there?

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[alsoknownasDean]

This does concern me. 
I'm surrounded by people of all ages on a daily basis that have nothing to their name. 
They live in rented property with credit card balances, loans and overdrafts; they have nothing of any real value.

What if a political party comes along in another decade or two with a policy to raid my savings and net worth to redistribute to those that haven't helped themselves?


£13k is $16.5k at current exchange (which is a lot lower than it was before the brexit vote).

*Just realised you're in Australia.  £13k is $21k AUS*

That's still ridiculously low. Would someone on that sort of money be entitled to additional benefits or a council house?

I noticed that the areas with the least number of people with minimal savings are concentrated in SE England.

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[SpreadsheetMan]

Wow, making just £13k a year? Do they not have a minimum wage there?

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Yes, currently £7.20/hour for over-25s. Would roughly correspond to £12,300 after tax and national insurance (for a 40h working week, 28d required holiday).

That's not much at UK cost of living, a lot of very mustachian life choices would be required to make that work and there's not a lot of that about.

[Butterfingers]

- 2 working age adults
- 2 dependent children
- 1 adult earns £13k
- 1 adult earns nothing (primary childcare provider)

They would receive £8,193 in a combination of child tax credits and working tax credits.

They'd also get Child Benefit (c. £1,770 p.a.) and probably some Housing Benefit (highly variable rates of support exist around the UK). It's not a king's ransom, but it should be livable outside the southeast of England. My family fits the profile above (except for salary) and our annual expenses are £16–18k. Were we to cut back to essentials, we could subsist on about £13k. So it's doable, if not much fun.

[RobFIRE]

There is a wider point that high inequality in a society is generally very bad news. It's one of the main points in Thomas Piketty's "capital in the 21st century" book. Even if you're at the very top you still have the risks from higher crime etc. (you can pay for private security but then have reduced freedoms, may live in fear etc.).

I think a good proportion of the Brexit voters were protest voters, and, somewhat understandably, if you feel you're in a bad situation, have hit rock bottom, you will vote against the government and vote for change, any change, as you feel like it can't get worse. Though actually it can.

And while we still have no real idea what the Brexit will end up meaning, it will as a minimum cost a load of money and political energy to sort out, that therefore won't be available to work on existing unresolved issues such as unemployment, the hangover from the financial crisis, growing inequality and the lack of financial literacy of millions of people.

Short term all the 'hard Brexit' stuff is intellectually offensive, and as somebody with an EU national partner it's also somewhat of a concern that an assumed future of living freely in the UK or EU could be restricted (I don't imagine that even after a Brexit an educated Brit won't be able to apply to live in e.g. Germany and vice versa, but having to apply, meet criteria etc. when currently you can effectively just turn up is obviously a level more complicated and introduces the chance, for some bureaucratic reason or otherwise, that your application will be delayed or refused).

Still a long long way to go on all this Brexit stuff, so I refuse to be too pessimistic about doom & gloom possibilities that may never get close to happening.

I can't see a longer term future of "raiding" savings (politicians all earn 3x median wage so won't vote against themselves), but a future of higher income taxes and reduced tax relief for those better off could come as part of anti-inequality and/or government debt reduction measures (which if done correctly I may be in favour of).

[daverobev]

My god.. the whole ISA setup is crazy now. http://www.bbc.com/news/business-37318001

Government gives you shit loads of free money that you can use to buy stocks? Normal ISA going to *twenty thousand pounds* a year next year?

Makes Canada's TFSA look like a joke.

I dunno, it's too generous really - if you can do that 20k a year for 10 years you've got enough invested, tax free forever. Never pay any tax again.

[cerat0n1a]

I dunno, it's too generous really - if you can do that 20k a year for 10 years you've got enough invested, tax free forever. Never pay any tax again.

£20k a year for 10 years is going to give you an income significantly less than minimum wage, but make you ineligible for most of the benefits that those living on minimum wage (or the state pension) get. The government is paying your rent and a chunk of your council tax if you're on minimum wage & have no assets. You're paying it yourself if you've got £200k+ in savings and no job.

There's about 1.5 million people on minimum wage, three quarters of them in hospitality, retail or cleaning jobs which are often part-time/supplementary sources of income. That's a long way short of 50% of the population.

Interesting to look at the ISA stats. 12 million people put money into an ISA last year (a total of £80 billion) and a total of 22 million adults have an ISA (44% of those eligible.). The southwest of England has the highest %age (50%) and with London (36%) and N.Ireland (30%) lowest. The total market value of ISA holdings is over £500 million.

[daverobev]

I dunno, it's too generous really - if you can do that 20k a year for 10 years you've got enough invested, tax free forever. Never pay any tax again.

£20k a year for 10 years is going to give you an income significantly less than minimum wage, but make you ineligible for most of the benefits that those living on minimum wage (or the state pension) get. The government is paying your rent and a chunk of your council tax if you're on minimum wage & have no assets. You're paying it yourself if you've got £200k+ in savings and no job.

There's about 1.5 million people on minimum wage, three quarters of them in hospitality, retail or cleaning jobs which are often part-time/supplementary sources of income. That's a long way short of 50% of the population.

Interesting to look at the ISA stats. 12 million people put money into an ISA last year (a total of £80 billion) and a total of 22 million adults have an ISA (44% of those eligible.). The southwest of England has the highest %age (50%) and with London (36%) and N.Ireland (30%) lowest. The total market value of ISA holdings is over £500 million.

Ok... But I wouldn't want to claim benefits if I didn't need to. If I had my own house and 300k invested, at 4% that's a grand a month. Plenty of cash, and a burden to nobody.

[mohawkbrah]

the thing is with UK is that if you have the house paid off, cost of living is then cheap as chips

[2lazy2retire]

the thing is with UK is that if you have the house paid off, cost of living is then cheap as chips

Plus they have a fairly favourable tax treatment of investment income for someone living off LTG's/dividends

[independence]

This does concern me. 
I'm surrounded by people of all ages on a daily basis that have nothing to their name. 
They live in rented property with credit card balances, loans and overdrafts; they have nothing of any real value.

What if a political party comes along in another decade or two with a policy to raid my savings and net worth to redistribute to those that haven't helped themselves?


£13k is $16.5k at current exchange (which is a lot lower than it was before the brexit vote).

*Just realised you're in Australia.  £13k is $21k AUS*

That's still ridiculously low. Would someone on that sort of money be entitled to additional benefits or a council house?

I noticed that the areas with the least number of people with minimal savings are concentrated in SE England.

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It's worth noting that if you were earning £13k per year as a single person under 25 you wouldn't get housing benefit, council tax support or tax credits.