Survive the Recession
Economic recession in the UK
The recession is still affecting us, regardless of what people say, and people’s spending is much less than it has been in the past. The economy has shrunk down in the last six months, a figure which has been calculated by negative gross domestic product figures for two quarters in a row. This will therefore mean that businesses are generally struggling, with suppliers and sales decreasing quite significantly, as well as profits not being made and jobs under threat due to companies not having the money to hold on to staff.
People who are lucky enough to be working nonetheless end up worrying about being made unemployed if their company is not doing so well, meaning they tend towards spending less money. This leads to shops being put under pressure due to lack of sales, which means that manufacturers will not have as much business, leading to a potentially neverending vicious cycle.
The recession must not be confused with a depression, as a depression is far worse, the term being used to refer to deeper and more problematic economic woes. It must be remembered as well that not everyone will suffer during a recession, and it is possible to keep earning a good income during it without allowing any debt problems to arise. People in this position then benefit from the lowered prices in shops all around the country.
It is also a great time for people who have money to buy property. House prices are down and are unlikely to fluctuate anytime soon. Regardless of whether you feel secure in your job position, you should still review your financial status in this economic climate, as you may not have the bonuses or overtime pay that you had been hoping for.
People’s biggest fear during a recession is definitely the idea of losing their job, therefore suffering from a drop in income which could mean getting behind on bills and not being able to meet financial commitments, especially their mortgage. Your lender should be notified as soon as possible if you cannot pay a mortgage loan installment, as they may be sympathetic and give you an extension to make up for the payment that is overdue, or suggest lower monthly installments instead to make the payments easier.
An easy way to ensure that you are still able to pay your monthly mortgage repayments while unemployed is by taking out Payment Protection Insurance for your mortgage, which will pay your mortgage for you for up to 12 months if you are either unable to work or are made redundant and therefore end up in a position where you do not have a regular income. However, you must be careful when purchasing Payment Protection Insurance, as it can sometimes be mis-sold to people without their knowledge on credit cards or personal loans, and this is currently under investigation.
Does the Financial Services Authority work?
The Financial Services Authority (FSA) is the financial regulator of financial services in the UK and set rules for companies to follow.
Find out more about the Financial Services and Market Act
The Financial Services and Market Act 2000 is responsible for a number of important changes within the field of financial services and regulation.
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