How The Credit Crunch Cost You £31,000

The international credit crunch, and the subsequent recession, brought the banking industry to the edge of catastrophe and led directly to pay cuts, redundancies and rapidly-rising unemployment throughout the UK.

For those who have lost their jobs, and possibly their homes, the effects on their personal finances have been all too obvious.

But there has been a wider effect on the accumulated personal wealth of the nation.

The BBC can reveal that in the course of 2008 alone, £815bn was knocked off the wealth of households in the UK.

That amounted to an average of nearly £31,000 for every household in the UK.

Going down

The huge dent to personal wealth last year has been calculated, for the first time, by the Halifax bank, exclusively for the BBC.

The biggest impact was from the sudden slump in house prices which led, according to government figures, to a 9% cut in the market value of all residential property, from £4,077bn to £3,693bn.

Taking into account the effect of a 3% rise in the value of the mortgage debts held by home buyers, to £1,225bn, then the nation’s housing equity – the surplus of market value over existing mortgages – shrank by a massive 15% last year, down from £2,890bn to £2,468bn.

Meanwhile, the financial assets of households, such as the value of pension funds and investments, also dropped by 9%, to £3,687bn.

Last year, the stock of consumer credit loans that still had to be repaid – such as credit card debts, hire purchase agreements and bank loans – rose by 5%, to £234bn.

So the effect was that net financial wealth, as opposed to housing wealth, dropped by 10% in 2008 to £3,453bn.

Adding the housing equity of £2,468bn to the net financial wealth of £3,453bn produces a figure for net household wealth of £5,921, down by £815bn or 12% in just one year.

“It is a huge drop to happen in one year,” says Martin Ellis, chief economist at the Halifax.

“But we have had the biggest house price fall yet seen in just one year, combined with a fall in equity prices,” he adds.

In fact, if you think that last year’s house price slump was the 17% fall measured by the Halifax’s own index, then the overall fall in personal wealth amounted to a whopping £1,104bn.

Source: BBC News – http://news.bbc.co.uk/1/hi/business/8241480.stm

How To Protect Your Family & Income Against Redundancy

Protect Your Lifestyle From Being Made Redundant

It’s a tough world out there today but currently the entire world is suffering from a recession which has taken hold on a global scale.  The greatest fear we have from this situation is the growing trend of being made redundant.

Redundancies are happening in huge numbers and no one can be sure if they will become the next victim. It used to be said that if you worked for a large company then the chances of you being made redundant would be less than if you worked for a small to medium company.

Unfortunately we no longer have that to rely on. Companies worldwide, both large and small, are suddenly announcing redundancies in large numbers. It is the shocking and harsh reality of the current economic situation.

So what would it mean to you if you became unemployed tomorrow without any warning?

Maybe you would be lucky and your employer may still be able to pay you a redundancy payment which is a nice one off payment that is paid depending upon how long ou have worked for your current employer. But there may be a number of reasons why you wouldn’t have a redundancy payment.

It may be that you are not entitled to one as you do not qualify or it may be that your employer has gone into administration which means that there is no money to pay you a redundancy payment. If either of these apply to you then you could find yourself in a real dire situation.

Hopefully you have payment protection insurance for hire purchase goods, loan agreements and most importantly of all, your mortgage payments are protected under some form of repayment insurance premium.

However, that would only take care of your financial obligations, it doesn’t help you to put food on the table or pay your regular bills or put money in your pocket for everyday living costs. This is where most peoples problems really begin because you need your income, your salary, to provide you with actual ‘cash’. And this is overlooked by many people.

Think about it for a minute, you wake up tomorrow and find that you haven’t got a job and that there will be no money paid in to your bank account on your expected payday…. What are you going to do?!?

If you have ever lost your job in the past then you will probably know exactly how that feels. Panic and fear set in and take hold. You know you have to find another job immediately and the longer you are without a job then the more likely you will get in to financial difficulty.

If you can’t feed yourself or your family what are you going to do?

All this may sound like a terrible situation to to talk about but the fact remains that this situation will become a reality for many people in the UK and around the world.

Before this happens to YOU tomorrow you need a plan TODAY. That plan needs to protect you from the financial hell that this situation will cause you when it happens to you. Protection = Peace of Mind.

As with any potential disaster situation there are steps that you can take today to protect you tomorrow. And this is a step you need to take today to protect your family from the horrors that go hand-in-hand with losing your job.

You Can Protect your:

• Income
• Mortgage payments
• Rent
• Loans
• Credit card payments
• Other lifestyle expenses

Think about that for a moment… You wake up tomorrow and find out that your regular ’secure’ job no longer exists and you  WON’T be getting paid again!!. A frightening thought isn’t it.

However, imagine that same situation but this time you do not have to worry about a single thing because you have protected your income and with a simple phone call. All of the concerns that you would normally have simply disappear because you protected your income against being made redundant, or if you are unable to work due to sickness or an injury.

It would be a massive relief wouldn’t it and it is very easy to arrange this protection. Protect your lifestyle and income today.