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

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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
Classification: Public

12. Thank you and questions
Classification: Public

13. A word from our lawyers Classification: Public
This material is published by The Royal Bank of Scotland plc (“RBS”), for information purposes only and should not be regarded as providing any specific advice. Recipients should make their own independent evaluation of this information and no action should be taken, solely relying on it. This material should not be reproduced or disclosed without our consent. It is not intended for distribution in any jurisdiction in which this would be prohibited. Whilst this information is believed to be reliable, it has not been independently verified by RBS and RBS makes no representation or warranty (express or implied) of any kind, as regards the accuracy or completeness of this information, nor does it accept any responsibility or liability for any loss or damage arising in any way from any use made of or reliance placed on, this information. Unless otherwise stated, any views, forecasts, or estimates are solely those of the RBS Group’s Group Economics Department, as of this date and are subject to change without notice. The classification of this document is PUBLIC. The Royal Bank of Scotland plc. Registered in Scotland No Registered Office: 36 St Andrew Square, Edinburgh EH2 2YB. The Royal Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. © Copyright 2013 The Royal Bank of Scotland plc. All rights reserved
Classification: Public