How the recession has brought us closer together
THERE are two sorts of money worries. The first is a genuine financial problem. Perhaps you are attempting to obtain a loan for a house purchase or finding the cash to repay a debt.
But the other is just worrying about money. Will I ever be able to afford a mortgage? Am I saving enough for the future? Will I have enough to live on when I retire?
Sometimes the financial pressures seem relentless and endless. Just count the number of items on the news or in newspapers that relate to the economic situation, much of it impacting on us in some way.
At times the pressures seem overwhelming; increasingly, the use (and need) of an independent financial adviser (IFA) makes sense, as much for your financial peace of mind as well as for advice and planning.
The world's financial landscape has changed since the recession of 2008; so has our view of money and, in some cases, priorities - so that we can best cope with a less stable environment.
Who would have believed that when the Bank of England reduced the base lending rate to 0.5 per cent in March 2009 it would have still been at that historically low level nearly 2,500 days later!
Recently, it was reported that investors had agreed to lend money to the US Treasury at zero per cent interest for the first time. This was another sign that the expected rise in short-term rates by the Federal Reserve might not happen now until next year.
A decade ago, if you had suggested either of the above ever happening, you would probably have been sent for a check-up.
The aftermath of the 2008 financial crisis and the slowness of the global economic recovery had taken us into unfamiliar territory; even the experts are struggling to predict what will happen next, so what chance have we got?
It's not all doom and gloom. With interest rates at record lows and house prices at record highs in many places, the majority of owners have not only been able to keep their homes, but enjoy the increased equity in those properties.
Those with pension pots now have greater access to their money and greater freedom to spend it – although a recent survey by Standard Life showed that only 6 per cent of eligible customers had made use of the pension changes since they were introduced at the start of April.
It is clear that many individuals prefer to decide for themselves when and how to spend their money and savings, wherever they are held. The notion of wanting to be debt-free when starting retirement is now less important.
A recent Saga survey revealed that one in seven over-70s and one in three over-50s still have a mortgage; for some that is the result of investments performing poorly – for others it's a choice, preferring to keep that money in savings so it's ready and available if needed.
In some ways, the recession has brought us closer together.
The costs of moving, even downsizing, has led to many remaining in their homes - which are being adapted and extended to accommodate the kids who don't leave home or return after university and/or our parents who are no longer able to look after themselves.
According to the Valuation Office, 9,300 new annexes were built in England and Wales in the last year. This has increased the number of 'granny flats' by almost 40 per cent.
Government intervention has helped here. Before April 2014, annexes that were attached to a main household were considered a property in their own right (provided they had a fitted kitchen and bathroom) and were required to pay the full council tax.
Now, provided the resident is a family member, they get a 50 per cent discount. As well as “grannies”, these annexes are a useful for getting the children just that little bit further away.
It's a cheap way of housing your nearest and dearest. The average cost of building an annex is £20,000 and converting a garage is even cheaper.
The Office for National Statistics has just released figures that shows there has been a huge drop in the number of homes where no one works; in fact, the figure is at its lowest since the number of “workless” homes were first counted 20 years ago.
Since David Cameron became Prime Minister of the Coalition in 2010, the number of those homes has dropped by 684,000 – and the number of children in those homes has fallen by nearly half a million.
In 1996 when the figures were first collated, nearly one child in five (2.4 million or 19.8 per cent) lived in a “workless” home – those figures are now just over one in ten (1.9m or 11.8 per cent).
While there is a general feeling that we have all played our part in the economic recovery, it looks like few of us accept the government's often declared view that “we are all in this together.”
Last year the government received the grand total of £7,823 from the public, in the form of public donations and bequests, to help reduce the national debt!
Such meagre amounts were last seen at the start of the recession and over 100 times that amount - £799,390 – was received the year before!