The losers so far

The financial shenanigans over the past year have masked the fact that there are already losers.

The rate of house repossession is likely to be much more than twice this year what it was last year. In the vast majority of cases this will have been devastating, especially in the cases of losing jobs as well. Experts are estimating that in a year or two there will be over 3 million houses on mortgage with negative equity, or about 10% of all dwellings, whether rented, owned outright or owned on mortgage.

Unemployment could rise to somewhere between 2 million and 3 million, overtime will be severely reduced and incomes will be reduced enormously. It promises to be a time of great hardship.

Savers generally seem to have been protected, although their income seems set to fall as interest rates fall.

A further group will suffer, namely shareholders. If you think that they deserve no sympathy, that they are the wealthy who can afford to lose a little, think again. "They" include most of us who have savings which include equity elements, in unit trusts, investment trusts, ISAs, etc.
"They" also include those with company pensions, and those who have taken out private pensions. As the Tories have pointed out, those who were due to retire have pension pots not only raided for years by Gordon Brown but now savaged by share price collapse. In addition those with private pensions who have reached the age of 75 must convert their "pots" into an annuity stream immediately, despite the poor conditions.

The younger holders of equity backed investments may hope that they will lose income for a few years, but within perhaps 8 years things may have picked up again in share values. (We can't be quite clear, as we do not yet know what "permanent" damage the Brown mismanagement years have done.)

At the moment The (Brown) Economic Wizard is insisting that all the Government salvation investing in banks is paid back before other dividends are again paid. He doesn't admit it, but the EU Commission has made that stipulation. Experts think that full repayment of government investment will take perhaps 5 years. So those holding bank shares will have this additional medium term disadvantage. The interest on the Government held preference shares in the ailing banks is set at the punitive rate of 12%. I can only assume that the general antipathy towards bank shareholders is because of the (partly wrong) assumptions that Bankers have reduced us to this point.

The group of people most hit by all the above is the elderly who, unlike many younger people, had saved hard for some comfort in their retirement and who now will struggle to meet some of their bills in the face of a state old age pension diminishing in value because their pension has not kept pace with inflation. But there are not many votes there, - within a few years and perhaps sooner now, they will have left this life.