A debt timebomb

One of Margaret Thatcher’s greatest achievements was to persuade countless Britons, and her own civil service, that long-term financial health comes from following her motto: ‘Live within your means – put by a nest egg for a rainy day’. It is advice that few people seem to be taking today, both in and out of government.

For the first time in 30 years, households are spending more than they bring in. On average they finish the year £900 short.

Many are dipping into savings – which means they will not have the wherewithal to look after themselves in old age. Many more are racking up vast debts, encouraged by record low interest rates.

But eventually the era of cheap money will end, and doubtlessly the State will have to pick up the pieces for feckless financial irresponsibility. And as usual, those who live frugally will pay the price.