economics

Worried about where your children are going to live?

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Worried about where your children are going to live?  You should be.

The average house price in the UK is around £300,000, with average first time buyer house price at around £200,000. https://www.theguardian.com/business/2016/may/16/average-asking-price-first-time-buyer-home-buy-to-let-stamp-duty

If a prospective first time buyer has raised the £20,000 deposit, then taking into account costs they will need an income of around £39000 a year to be offered a mortgage.  And they will be charged around 4% for the privilege. http://www.halifax.co.uk/mortgages/mortgage-calculator/calculator/#

Only the top 20% of earners in the country have that level of income.   http://www.salarygraph.co.uk/

So, if your children want a home of their own, then without help they will need to be in the top 20% of wage earners.

How can you help as a parent?  Here’s one example.  If you own your home and have paid off your mortgage already then you could take out a mortgage on your home at a much better rate, and then lend the money to your children.  Suppose your home is the average value, then you would need to borrow just under 65% of the value.  An offset mortgage with the Coventry for instance offers a rate of under 2% (lower because of the better loan to value ratio) http://www.coventrybuildingsociety.co.uk/mortgages/AccountSummary.aspx?socseqno=1&prodCode=OFL50&Company=1  Taking out an offset mortgage on your own house also means that you can set up the mortgage before your children need the money to buy a home.   So even if they are some years away from wanting to buy, you can still be putting arrangements in place.

But you could make good use of the funds in the meantime. Why not do something immediately to help others who are desperately in need of homes?  Think about the suggestion in this article: https://www.churchtimes.co.uk/articles/2016/29-april/comment/opinion/use-what-power-you-have-to-help-the-poor .  Or if you want even lower risk, then you could buy a house and lease it to your local council. http://www.independent.co.uk/arts-entertainment/let-your-home-to-the-council-paul-gosling-reports-on-a-tenant-who-could-prove-ideal-1535702.html

The housing situation is difficult, not just for our own children but for many others.  This is worrying, but I hope this short article shows that as individuals we are not helpless.  If you are in a position to help, then why not have a go?  It can be fun and rewarding.

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Why I will be voting to remain in the EU.

/ Minimalist Christian / 4 Comments

The result of the vote is likely to have little or no impact on me personally, so why do I come across as passionate that we should stay in?  Because I care deeply about the wellbeing and spiritual health of all in our nation.

The current suffering of the poorest in our society has absolutely nothing to do with the EU, but everything to do with the UK government’s austerity program and with the culture of inequality that is peddled by the press and protected by the wealthy.  It is within our nation’s power to deal with this today – irrespective of whether we are in or out of the EU.  The ‘out’ campaign put the blame for the current difficulties on immigration and ‘Jonny Foreigner’.  This creates anger, tribalism and hate in the hearts of those who listen to their message.  I do not want our nation to move further in that direction.

The claims from both sides that Britain will be better off ‘in’ or ‘out’ are all speculation. Nobody knows how other nations will respond, what the markets will do, or any of the other predictions.  Of course, the ‘out’ campaign can claim that things will be better than they are today, and in response all that the ‘in’ campaign can say is that they will be worse.  In the present austerity regime, the ‘out’ offers an end to the pain, in the same way as the National Lottery offers a way out of financial troubles – and you don’t even have to buy a ticket, just tick the right box.  And in the same way that the lottery takes money from the poorest with the promise of wealth, the out campaign is appealing to the poorest with the promise of a wonderful future.  This is manipulative, and I will not support a group of people who use such tactics.

We are currently governed by a party that was elected by 25% of the nation (we call it democracy), composed of the privileged class.  Without hindrance from the EU they are introducing policies that do not consider the personal pain of the poor.  The most extreme members of this group are the ones that want us to leave the EU.  I ask why, and the answer is simple – they don’t want the EU to constrain their policies with any social justice laws and regulations.  They want to be unfettered in pursuing their personal agendas.  I do not want to see these people given completely free reign in this county.

And finally, the whole question is causing people to ask ‘what is best for me’, whereas I would rather see people to ask ‘what can I do to help my neighbour’.  I want the leaders of our nation to encourage us to be more moral in our thinking, and yet the in/out debate is a perfect example of our politicians appealing to the basest emotions that we have.  So I advocate: “Vote to stay in Europe, stop listening to the rantings on the politicians, and get on with loving and caring for your neighbour, near and far”.

brexit

How each of us can help the poorest find somewhere to live

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Here’s an article I wrote, just published in Church Times:

https://www.churchtimes.co.uk/articles/2016/29-april/comment/opinion/use-what-power-you-have-to-help-the-poor

God is fair, the economy isn’t, we can do our bit.

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Mankind has established a system that breeds injustice. Wealth sucks money from the poor. Those with money enjoy luxury whilst those without struggle to survive.

God is not like that. He is just and fair. The Apostle Peter writes, “This faith was given to you because of the justice and fairness of God”. Faith is available to all, rich or poor.

God is fair. “He gives his sunlight to both the evil and the good, and he sends rain on the just and the unjust alike.” In God’s kingdom, rich and poor are treated fairly.

God is just. In God’s kingdom rich and poor will receive the justice they deserve.

The poor will receive justice for suffering under the unfair economic system of this world. But the actions of the rich sustain that system.

It is so ingrained in our culture to maximise our income that we forget that the more we gain we gain the more someone else loses. Let’s remember.

Let’s question each financial decision to make sure it will reduce the unfairness of the system:  Does it move money from the poor to the rich, or does it help the poor?

“Looking at the man, Jesus felt genuine love for him. “There is still one thing you haven’t done,” he told him. “Go and sell all your possessions and give the money to the poor, and you will have treasure in heaven. Then come, follow me.” At this the man’s face fell, and he went away sad, for he had many possessions. Jesus looked around and said to his disciples, “How hard it is for the rich to enter the Kingdom of God!”

It is hard to go against the flow, but if we choose to reinforce an unfair monetary system, why should we expect to escape justice?

Inequality between the richest and the poorest is man-made

/ Minimalist Christian / 4 Comments

Inequality between the richest and the poorest is a man-made thing. Men have put it in place. Men defend it. Men can dismantle it.

A young person on a modern-day apprenticeship (learning skills that will make a day-to-day difference in our lives) earns just £3.30 an hour, £6300 a year. The starting salary for a banker (who shuffles money around whilst taking a percentage) is in the range of £35000 a year? Is that just?

Is it good that “the rich are 64% richer than before the recession, while the poor are 57% poorer”?

Where do you sit on the UK income scale?

  • If you earn less than £10000 you are in the bottom 5%
  • If you earn more than £21000 then you are in the top 50%.
  • If you earn more than £35000 (starting salary for a banker) then you are in the top 25%.
  • If you earn more than £68000 you are in the top 5%.

If it is right and just that the top 5% earn over ten times more than the lowest paid, then let’s enjoy our position.

If not, then let’s ask ourselves what we can do to make a difference.

And let’s make a new year’s resolution to start to make that difference.

References:
https://www.gov.uk/national-minimum-wage-rates
http://www.prospects.ac.uk/corporate_investment_banker_salary.htm
http://www.independent.co.uk/news/uk/home-news/britains-divided-decade-the-rich-are-64-richer-than-before-the-recession-while-the-poor-are-57-10097038.html
https://www.gov.uk/government/statistics/percentile-points-from-1-to-99-for-total-income-before-and-after-tax

How YOU can help achieve affordable rent

/ Minimalist Christian / 6 Comments

Rents are too high. A single person over the age of 21 on minimum wage of £6.50 an hour will earn around £1000 a month, less deductions. Even with the lowest rent prices, half of that will go on rent leaving around £120 a week for everything else.

Here’s a painless way to get rent down. It just needs some visionary people with a little capital to decide to do something about it.

Here is an example:
£60,000 invested in a building society or bank will be doing well to make 3% interest (although a ‘help to buy’ ISA can give 4%) e.g http://www.halifax.co.uk/savings/?WT.ac=SNCA1012

Therefore a good (4%) return on that £60,000 is £2400 a year, or £200 a month.
If we are happy with a 4% return on our savings, then why not but a property and rent it out at the same return?

The cheapest (1 bedroom) property available today is £395 a month. http://www.rightmove.co.uk/property-to-rent/property-56267795.html

There is a flat for sale in Rugby for £60,000. (http://www.rightmove.co.uk/property-for-sale/property-54091703.html?premiumA=true )

Using the £60,000 to buy the property, we could charge a very fair rent of (say) £250 a month, offering a low rental price and getting a very good return on the investment. (£250 instead of £200 to include an allowance for maintenance and fees)..

This represents a saving of a third on the lowest rental cost, and would give someone on low income the chance of an improved standard of living, and maybe even the chance to save enough to put down a deposit on a house of their own.

And all of this giving the same (or better) return that we get from the building society. Maybe there is a little more risk – but there is the benefit of doing something personally to help the current difficult situation for the poor in our town.

If enough of us do this, then it might even cut the overall rental market price (supply and demand!) with wider benefits.  I know that not everyone can help in this way, but some can, and it makes a difference to each person who is helped.

If you are interested and want to take it further, I’m happy to share my experience so far (I have made use of a legacy from when my mother died to do this). Please get in touch privately.

rent

Two shirts at Christmas?

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Friends on Facebook know that I often share posts highlighting injustice.  And I have written blog posts prompted by claims that ‘austerity’  is working.  But in the face of injustice, with a government that shows no sign of compassion, and with years to the next general election, doesn’t this just breed despair and helplessness: “It’s too big a problem, and what can a single human being do to change things?” So why do I speak out about injustice?

  • To grumble and whinge?  No
  • To cry out for change? Yes
  • To educate that it is indeed injustice? Yes
  • To encourage readers to ask “what can I do?” Definitely.

Many years ago a wise man said “If you have two shirts, give one to the poor. If you have food, share it with those who are hungry.”   He was speaking in a time of great injustice, under a government that brooked no dissent.  There was no changing the system, but he was calling every person to make a difference.  He was challenging the culture of the day.  That is what I hope to achieve.

I choose not to follow the culture of self-interest and greed endemic today, where we are expected to make all decisions on the basis of maximising our personal income. I try to make life decisions on what is good and right, and that includes recognising that I have “two shirts”.  I long for the wealthy to recognise the same.

But where does the strength come from to be counter-culture?  It does not come from the media, or from political leadership.  It comes from the one that the wise man served.

Do you want to make a difference?  Then begin.  Choose goodness.  Choose love.  Transfer your allegiance from the culture of selfishness to the one who is supreme goodness; the one whose birthday the world is celebrating.

Have a great Christmas!

two shirts

Greece is on the verge of a great future – don’t throw it away!

/ Minimalist Christian / 8 Comments

What is it that defines a successful country? The wellbeing of the citizens, or the nation’s riches? The two are not the same.

Wellbeing: feeling loved and valued, health, happiness, contributing to society –these are the things that matter, that make us human. These do not come with national wealth but with equality and relationships – how people value and treat each other.

In the war, everyone was ‘in it together’ and although times were hard, apart from the obvious war wounds, people were healthy, valued and fulfilled. Society became much more equal. If Greece chooses to adopt a true attitude of unity (not like Cameron’s phony ‘Big Society’) where everyone looks out for each other, where those with more help out those with less – because they matter as fellow human beings – then Greece will thrive!

The worry is that Greece is so keen to stay in the “Euro” club that they will give up their wellbeing to do so. They are already feeling un-valued, un-loved and betrayed. They are dealing with institutions, but institutions don’t have a soul and don’t care about people, so why is Greece surprised. But they don’t have to shackle themselves to the rich man’s yoke to live well.

So long as there is food on the table and friends to eat it with, so long as their whole society unites in a common cause, they will thrive. But if they choose to be victims of the wealthy, if their society chooses to take what they can as individuals then they will indeed suffer. The richer Greeks will be materially fine but the poor will hurt, health for all will worsen, there will be riots and unrest, and productivity will reduce too – the signs are already there.

Greece is at a crossroads, but it’s not the crossroads reported in the press. It is a crossroads of its citizen’s attitude to each other. They can lead the world in showing how to be successful without being serfs to the economic barons. I hope that they choose wisely.

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Work and Pay

/ Minimalist Christian / 9 Comments

I think the world has become confused about work.

Instead of thinking that work is something to be endured to bring in the money we need to live, or a means of making us rich we should think of our work as our contribution to fulfilling the needs of society. We need to start thinking of it as ‘what can I give’ instead of ‘what do I get’.

And in a similar manner, society needs to think more clearly about the needs of the individual. All of us need to eat, sleep and live somewhere that we can call home. And the reciprocal side of the exchange is that when someone contributes to society, then society has a duty of love to meet the needs of that person.

Jesus told a parable of a man who hired workers for his vineyard. Some he hired in the morning, some in the afternoon, and some just before closing time. But he paid them all the same. He paid them what they needed to live. But of course, those who worked all day felt that this was not just and grumbled. Yet the vineyard owner pointed out that they were happy to work for their agreed wages, and they had received them. All the workers were willing to work. They were willing to make their contribution to society, even if there was no immediate work required. And they all had the same needs. The vineyard owner met their needs. Why can’t we follow this example?

Similarly, how do we decide how much someone should be paid? Is it according to the contribution that the job makes to society? How valuable is it to society when a person sits at a desk and manages our money? How valuable is it to society when a person removes the rubbish that we create during the week? How valuable is it to society when a person serves us a meal in a café or restaurant? I have to say that the most valued workman I’ve encountered is the one who came to clear our blocked drains when the raw sewerage was overflowing! Yet he is paid less than I am, when I spend much of my time sitting at a computer terminal.

It is not my aim to claim that job A is X times as valuable as job B, but to add into our thinking and actions that we need to be willing to pay each person sufficient to meet their needs.

Unfortunately the recent trend is that the rich are getting richer and the poor are getting poorer. I don’t have a problem with unequal pay, and with pay that reflects the value to society of the work. But I do take issue with a system that ignores the ‘need’ part of the equation.

Can you and I do anything? Yes we can. Even if it is only being willing to pay a fair price instead of the lowest price for goods and services.

But also, the reward for our work is more than just money. We all value the respect of our fellow human beings. One thing that we can all do is to treat everyone, in whatever job, with respect and with appreciation.

And similarly, when we are working, we can consider our work as more than just a job but as a contribution to society. The bricklayer can choose to be building a home instead of laying some bricks.

And we also need to respect those who are seeking work but unable to find it. Not only do they receive no wages, our benefit system disrespects them and prevents them making their contribution to the good of us all. Can’t we treat them like those in Jesus’ parable who were looking for work , and who at the end of the day were then paid what they needed to live.

Let’s think on these things as we go about or daily life of working, waiting, shopping and ‘consuming’.  Let’s change our attitudes.

Financial advice from Money Box Live, or Pope Francis?

/ Minimalist Christian / 3 Comments

I was listening to the radio program Money Box Live last week. They were talking about pensions. It seems that if you delay taking your pension for a year then the amount of your pension increases by about 10% per year when you do take it. I guess this is a government scheme to reduce spending on pensions today at the cost of increasing it in future years, perhaps when there may be another government in power – but that’s not the point of this article. The thing that caught my attention was that they got a mathematician to describe the best time to take your pension.

The longer you delay, the higher the pension when you take it, but the less time you take it for. So if you know when you are going to die (which you can look up in statistical tables) the mathematician was working out a time at which the total amount of money you receive reaches a maximum.

All very logical and calculable, so why am I writing about it? Because it is a symptom of the cancerous thinking that underlies so many decisions today:
Our goal is to maximise the money we get, even if we only get it on the day before we die.

We forget that the more we have, even when we don’t need it, the less there is for others.

We don’t consider that the schemes we invest our money in minimise costs, such as the wages of the lowly paid, or maximise income, such lending our money at high rates of interest.

We ignore the fact that making decisions on the basis of maximising our income reinforces the extremely unfair financial systems that we have today, where the rich are getting richer and the poor are getting poorer.

It is not easy to turn down opportunities to make more, or spend less. It is natural to want to buy the cheapest milk, or trainers, or energy – but each decision has its consequence.
When we invest to minimise our tax bill, we are placing the burden of paying for our public services on others. We are encouraging our government to introduce ‘austerity’ measures – “sanctioning” benefit claimants if they miss an appointment (in effect, fining them 100% of their income). We place the burden of balancing the government’s books on the poor.

My mother died last year. She didn’t spend the pension she received, and her investments grew, and we were surprised at the amount of money that she left. I have to decide what to do with the money I inherited. Money Box Live would tell me to invest to maximise my income. But I agree with Pope Francis, I reject that basis for my decisions. How about you?