The government has recently declared that a 1 billion pound scheme has been agreed with the 8 largest lenders (HBOS, Abbey and Nationwide) to help struggling homeowners. The package is estimated to benefit around 9000 people and will be available to those that have recently lost their jobs or have suffered a loss of income i.e. a bonus.

The bailout will let households with mortgages of up to £400,000 defer their interest payments for up to 2 years however the exact terms of the suspension of payments and how much of the payments are deferred will have to be agreed between the individual and the bank. The scheme is effectively a form of mortgage interest insurance and has been classed as more of a reassurance tool. It is targeted at middle income families and to qualify they must not have more than £16,000 in savings, currently those who are unemployed with mortgages of £200,000 or less can apply for housing benefits

I personally feel that even though the government is stepping in to try and help homeowners it still won’t be enough to fight this economic downturn, there needs to be some serious action to help relieve the millions of people who will feel the burden of debt and money worries. Yes I know they’re trying but all these packages the government puts together have been very rushed and probably not thought through very well. The amounts used for all the different bailouts in recent months (banks etc) have to come from somewhere and taxes will not fully cover it, so what will be happening in a few years time? I see more of us in debt, taxes skyrocketed and prices on goods will be far higher than expected (£8+ a pint!!!) and of course wages will the same!

What do you think of the government bailouts and what do you think the future holds for the economy and the cost of living?