Work, debt and households in Scotland 2016-2026 Stephen Blackman, Royal Bank of Scotland Money Advice Scotland Conference 22nd June 2017 Classification: Public

Number of new jobs created in Scotland Source: ONS Job creation remains key to Scotland’s and Scotland’s household’s economic health Number of new jobs created in Scotland (2004 to 2016, in 000s) Classification: Public

The squeeze in on – prices rising faster than pay again Source: ONS The squeeze in on – prices rising faster than pay again The value of pay rises after adjusting for inflation (y/y, %) Year Classification: Public

Source: ONS While wealthiest will see greatest increase in costs, the income poor have less ‘wriggle-room’ Estimate extra cost of higher inflation next year Income Decile (disposable income) Classification: Public

Spending boosted by consumer credit growth Source: BoE Spending boosted by consumer credit growth Stock of household debt – end 2016 New Lending in 2016 Classification: Public

Source: ONS, CML Scotland’s homeowners supported by low mortgage rates not income growth Total change in income by income quintile (2010 to 2016) (%) Income quintile Classification: Public

Market expectations for BoE Bank Rate Source: BoE Low rates should continue to protect the majority of mortgage borrowers Market expectations for BoE Bank Rate January 2017 June 2017 Classification: Public

Share of households buying with a mortgage Source: ONS, CML, Survey of English Housing High house prices means fewer able to afford a mortgage (despite lowest-ever mortgage rates) Share of households buying with a mortgage (2006, 2016 & 2026) Classification: Public

A regular family now and the future Source: ONS, CML, Survey of English Housing A regular family now and the future Meet Julie and Paul (2016) and Sarah and Chris (2026) 2016 Julie and Paul (born 1967), 2 children Nurse and Van Driver Income £52k (7th decile) 1/2 buying with mortgage Year first bought 1995 Mortgage £171,000 Consumer credit debt £4,000 Savings £3000 2026 Sarah and Chris (born 1988), 2 children Nurse and self employed van driver Income £64k (7th decile) 1/3 buying with mortgage Year first bought 2018 Mortgage £334,000 Consumer credit debt £5,500 Savings £0 Classification: Public

A first time buyer now and in the future Source: ONS, CML, Survey of English Housing A first time buyer now and in the future Meet Becky and Matt (2016) and Sophie and Tom (2026) 2016 Becky and Matt (born 1986) Teacher and Programmer Income £83k (9th decile) 57% buying with mortgage Year first bought Mortgage £281,000 Consumer credit debt £5,000 Student Debt £10,000 Savings £14,000 2026 Sophie and Tom (born 1995) HR consultant and App developer Income £120k (9th decile) 1/2 buying with mortgage Year first bought Mortgage £440,000 Consumer credit debt £7,000 Student Debt £60,000 Savings £19,000 Classification: Public

Estimated growth in self employment growth 2016-2026 Source: ONS The world of work is changing and with it how people earn money and use debt Estimated growth in self employment growth 2016-2026 Classification: Public

Thank you and questions Classification: Public

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