Are you still affluent?

Derek F gurgled happily, sounding much like they were saying:

"Before the credit crunch struck in 2007, there were 7.9million people in Britain who were classified as ?affluent?."

So basically it's "

And can they just unilaterally exclude the value of the house.

Is someone with a million pound house, a 900K mortgage, and 30K is savings better off than someone with a million pound house, owned outright, but only

tim

"tim...." gurgled happily, sounding much like they were saying:

In terms of liquid assets, yes. Houses are pretty damn illiquid.

In message , tim.... writes

Yes, because if anything happens to them they will die owing lotsa money, which makes them a winner. ;-)

Not when the amount of capital required is insignificant to the amount of equity. You can just get a loan secured against the value of the house

tim

"Gordon H" wrote

Eh? - How would they be a "winner"?

Assuming that both have the same income, then no. The person without the mortgage is better off than the one with the mortgage.

I know,

but that is not how this "survey" sees it

tim

In message , Tim writes

Because anyone who dies owing money is a winner.

At least that was the t-i-c ambition of a rather dubious acquaintance of mine. I'm not sure if he succeeded, because he left some decent amateur radio gear behind, which his partner must have sold or given away...

I wrote an "appreciation" of him for an amateur radio publication, and the vicar used it at his funeral, with the approval of his partner. It got a few laughs from his close relatives and friends who knew him as well as I did. :)

But that doesn't fit the facts above. He may owe a 900k mortgage debt, but has 1030k of assets with which to repay it. So his estate is still positive. He's no winner, because there is no loser.

If things were different, and his estate ended up negative, then there would be losers (those to whom more money is owed than his estate can repay). Technically, he would *then* be a winner, but we don't like to accord such accolades to someone who "wins" by basically cheating society.

Yep, die in debt and you win on points.

He hasn't cheated society. He's made money from the bank. It could be argued he's taking back the money he's probably given the bank and its shareholders in the past. His method is just unpalatable to anyone who currently has shares in a bank. Much less immoral than the fees charged by solicitors.

Nonsense. Don't be fooled by the bad press banks have had recently into believing they are not really part of society, or are the principal baddies against whom getting one over on them is to be considered a Good Thing.

Remember that the bank is merely a broker for money. If you die without your estate being able to repay your mortgage, it isn't the bank you're hurting, it's the people who've deposited money in them. In other words, it's "society".

Only if you regard a bank as something more than just a private business. I certain don't.

I don't understand your comment. Yes, the bank is just a private business, but the implications of hurting it do go well beyond it. If you leave the bank with a bad debt when you die, you are not just hurting the private business which is the bank, and its shareholders and employees, you are hurting the people and businesses who have deposited money in it.

Well I guess you're right on that last point I suppose.

Of all the people you don't hurt are the depositors. The person dying with a debt to the bank hurts the profit, which would otherwise be paid to the shareholders. I'm assuming here that the bank doesn't recklessly lend unsecured loans which they can't cover.

Other than that, a private bank is just that, a private business. It assesses risk of lending money vs the likely return. Higher the risk, the greater the interest. Friends Provident take on high risk customers. High street banks don't. Both are out to make a profit for their owners/shareholders, just like any other business.

"Fredxx" wrote

You don't think they'll reduce the interest rate paid to depositors, to boost back up their profits?

The interest rate will reflect the market conditions. For example, Barclays came out far less scathed from bad losses, but I don't see their interest rates any higher than others banks which were badly caught out.