Where Does It Go? - UK Money Blog £

More doom and gloom on Radio 4 on the way to work last week - Centrica who own British Gas have announced that average annual gas bills could raise to £1000 a year - an increase of 60%.

As oil prices have risen, gas which is an immediate product of crude oil has had to walk in step. To be honest its been a long time coming - follow the money - oil and gas company shares have not historically walked in step with the price of crude for a few years, as this graph shows:

It was only a matter of time before the utility companies started putting up prices.

This is all happening at the same time as the credit crunch starts taking hold - there are some estimates that house prices could dip by 30% and stay there for 20 years! More conservative estimates talk of a four year gap until they reach 2007 levels.

Will the banks learn their lessons? Will sub-prime mortgages be consigned to the past as a silly un-prudent idea, never to be repeated?

As repossessions continue, we could see houses being sold only to the cash rich, leaving less and less people in control of more and more property - we’ll become a nation of renters and a tiny minority of landlords. If it really goes tits-up we could even see those landlords falling foul of high interest rates and rising costs, with more nationalisation of banks to prevent the economy collapsing.

I sit here working, earning more than I have ever done before, yet find myself with less and less disposable income. I work to keep myself in just enough comfort to continue working.

Why does this all sound familiar?

The
worker becomes all the poorer the more wealth he produces, the more his production
increases in power and range. The worker becomes an ever cheaper commodity the more
commodities he creates. With the increasing value of the world of things proceeds
in direct proportion to the devaluation of the world of men. Labour produces not
only commodities; it produces itself and the worker as a commodity — and does so
in the proportion in which it produces commodities generally.

Marx - Economic and Philosophic Manuscripts (1844)

An interesting study by the Joeseph Rowntree Foundation was published today, which claimed a single person in Britain needs at least £13,400 a year for a minimum standard of living (as reported by the BBC here)

This is compared to the national average wage of £26,000 as reported by the National Statistics Office.

In reality this average is a mean, not a median score which would more accurately reflect the chance you bump into someone earning more than this figure half the amount of times, since the top 20% wage earners earn 80% of the cash - this gap is widening.

A guardian news story estimates that supermarket staff need to work 94 hours a week to reach this average.

A recent NY Times story ran showing that contrary to some peoples belief, money DOES buy happiness, in a study carried out there.  Another interesting conclusion was it was more a countries relative income that governed happiness; if a country’s poorest were close to the richest, the happier the citizens overall. 

It is an interesting look into the fundamentals of capitalism, both in its revealings of those deeply involved in the system spending to sustain it, and how the perception of fairness within the society helped everyone’s happiness levels. 

£13,400 a year would be an absolute fortune in a country like Armenia, which wiki currently reports an annual income of $1562 (~£750) - this equates to a minimum British wage being enough for 17 Armenians - are we 17 times more happy than Armenians?

Tags: wages, world news, salary

Hello and welcome to Where-Does-It-Go.Com, a resource to help answer a common cry looking at the bank balance at the end of the month - where does it all go? Rent, loans, credit cards, student debt, petrol, car tax, council tax - let alone food for the table and clothes for your back. In todays ever complicating society, it takes more administration than ever just to keep a roof over your head.

This website is an attempt to try and make sense of it all; for those who don’t want to just pay what they are told but to find ways to make your money work for you and make your life as hassle free as possible so you can get on with what you REALLY want to be doing with your free time.

I’ll be trying to keep the site plain speaking and so a degree in economics isn’t needed to understand all the legalese involved. Obviously this is just some site on the internet so take everything said as my opinion, but I’m hoping that my experience and background in mortgages, marketing and insurance will help focus on the facts that really matter to you on a day to day basis, whilst also tracking my progress as I try and make money matters as hassle free and optimised as possible.