Five lives affected by the market's meltdownBy Jasper Hamill
Bad financial news has been everywhere this week. Inflation has risen to 3.3% and is predicted to grow to 4% by the autumn, pushed up by rising food and energy prices. Jittery markets officially entered a "bear" phase, which means share prices have fallen 20% from their peak, seen in June last year. And oil prices shot up to a fresh record high of $147 after Iran's missile tests earlier in the week, described as "provocative" by America, ratcheted up global tensions.
Experts may argue over whether this period is a full recession or simply a slowdown, but whichever it is, the state of the economy is certainly hitting home.
A survey revealed 71% of Scottish parents are so hard up that they worry about the cost of keeping their children entertained this summer holiday. Another showed 17% of British parents had slashed the amount of pocket money they give to their children.
With prices in shops up 2.5% over the past month and a further 25%-40% increase in gas bills expected this year, life is simply getting more expensive.
Hard times hit us all in different ways. We looked at five lives affected by the fallout from the credit crunch.
THE YOUNG WOMAN
Fran Martin, 26, sales assistant and bar worker, lives alone in Maryhill, Glasgow "This is the worst my finances have ever been. Every time I get a council tax or electricity bill, it seems to be bigger and bigger, even though I'm not using any more than I used to. I buy my food at Lidl these days, never anywhere else. Unless things are less than £1, I don't buy them. No shopping at Marks & Spencer for me.
"My debt has grown in the past few months, and I've been paying for bills and food on my credit card, which my parents always told me not to do. When you start doing that, you know you're skint.
"It's harder for our generation. Five years ago, people my age were able to get a mortgage for something like £70,000, but to get a mortgage like that these days, you'd have to live somewhere totally awful.
"Wages haven't gone up enough to cover the cost of living either. When I did street PR work five or six years ago, I was getting £5.50 an hour.
"For my bar job now, which I work as well as another one, I get £5.67 - only 17p more. That can't be right. After tax, it's less than £30 for a six-hour shift. Money is the main thing that makes me miserable."
THE PAWNBROKER
Willie Campbell, 41, owner of Tron Pawn, central Glasgow "People are a bit more frightened to borrow large amounts these days, in case they can't pay and they lose their property. They used to take as much as they could get but are more aware of the other bills they have to pay now.
"People think that we want to get everything from our customers, but all we look for is the interest on the loan, so we're far happier when people collect their property.
"It's a cliche that pawnbrokers become more successful during times of financial hardship. We've not seen a huge upturn in our business because people are finding it harder. We've always got customers with expensive stuff, so we're always busy with the top-end loans. There are loads of other things people can do before they dispose of their valuable assets."
THE WOMAN WHO CAN'T RETIRE
Linda Wood, 60, civil servant, Mosspark, Glasgow "Everything has gone up in price recently: food, gas, petrol, all the essentials. We're being screwed for money we don't have and I have no more belt left to tighten. I've had to sacrifice the little extras in life, like holidays, and I've put off retiring for two years - probably more, in fact.
"On top of all the rises, I've been asked to pay £7500 by the Glasgow Housing Association for work on my house that I don't even want.
"The price of petrol means I get public transport to work and barely use the car. I used to take a pootle down to Largs, but now I just think to myself: That'll cost you.' So I stay at home. Im pessimistic about the future; the economic situation is spiralling out of control. It always goes downhill when a Labour government is in. The Conservatives tend to keep a tighter rein on it. That said, I think that what Alex Salmond is doing, trying to get our oil revenues back, would improve Scotland's situation. But it's going to get worse before it gets better."
THE PENSIONERS
David Oattes, 72, a retired BT engineer, lives with his wife May, also 72, in Clarkston, Glasgow "Life is a bit of a struggle at the moment and it's definitely getting worse. I'm lucky in a way, because I get a pension from BT, but God help anyone that tries to live on just a bare pension. From what I understand, an awful lot of pensioners aren't going for tax credits or anything. I hear bags of moans from them.
"We just moved house a couple of months ago, and we didn't quite get the price we expected. If we'd have sold it earlier in the year, we would have got another £10,000 or £20,000 for it. Prices are up too, particularly petrol and food.
"We're lucky if we get £1000 a month. My BT pension, when lumped together with my state pension, is taxed. Where's the sense in it?
"We are definitely entering a recession. House prices have tumbled and even properties that kept their value during every other crisis are dropping like stones. It feels like we could be entering a pretty bad time."
THE DEBT COLLECTOR
Steven Cowan, 54, Yuill & Kyle debt recovery and credit control lawyers "We are a lot busier at the moment. We represent major high street banks and they are suing people faster than they have before and making efforts to recover their money more quickly. Credit managers and controllers in these organisations are being pushed by their financial directors to get money faster. I don't know if the economic situation is desperate or infectious, but there is a general concern, without question.
"The knock-on effect of this is that people will borrow less. Credit has been so easy to get in the past that people have been seduced into taking loans that have been on offer and now it's payback time, because banks are less relaxed about extending credit terms. There are some horrendous stories of credit card debt, such as people who no-one sensible would ever lend money to that have amassed well over £100,000 of credit card debt. That's not unusual.
"Generally, debtors are reasonable people who managed to get into debt. A lot of people are just using this money to live."
