The average wage has increased steadily - it's now £27,287 - but house prices have shot up.

The real startling increase was in the 1990s, when because of reckless lending house prices grew to £181,364, seven and a half times the average wage.

Some sanity has been restored because of house price falls in 2008.

However, there has been relatively flat wage growth in the past few years and a recently buoyant housing market has seen the gap today extend again to just over six and a half times.

Yesterday, the Nationwide Building Society reported further evidence of a cooling in the property market.

As it is much harder to get a mortgage today, this table is a further sign that, once more, buyers may be stretching their incomes just a little too far and that prices may be about to tumble.

WHY WE'RE STILL SPENDERS AND NOT SAVERS

From the turn of the last century until 2000, Britain went on a debt binge, stacking up massive mortgages, loans and credit cards. It was a combination of recklessness by lenders and borrowers.

Rather than save for a flash new TV or car, everyone just stuck it on plastic - it was buy today, pay tomorrow.

While both sides have been more responsible since then (and despite the boom in payday lenders), we're still paying. And when easy credit ended, hey presto, the amount Brits saved increased.

The savings ratio (which shows the amount of personal savings to disposable income) rose from 4.6 in 2008 to 10.4 in 2010. But it's started to fall back again and now stands at 6.7.

Laith Khalaf, senior analyst for brokers Hargreaves Lansdown, says: 'Things have not got any worse since 2007 - but they haven't got any better. People need to start spending less and saving more if we are ever going to get on top of this.'



What single event leads to more than fifty percent of all mortgage foreclosures in the USA? If you said disability, you would be correct. It would surprise many to know that your chances of becoming disabled is greater than premature death at every working age from 20 to 65. By the way, premature death accounts for only two percent of the mortgage foreclosures in the country. Yet fewer of us have disability income insurance than have life insurance. Three in ten workers entering the labor force today will become disabled at some point before retirement.

What are the sources of income we could count on in case of disability? An overwhelming number of us (71 percent) live from paycheck to paycheck with little in personal savings. Unless you have replacement income from disability income insurance, income from other sources, or sufficient savings, you and your family will be exposed to great economic insecurity in the case of long-term disability. It can be argued that disability can be more financially devastating to the family than premature death. In the case of long-term disability, earned income is lost, medical expenses must be paid, savings are depleted, employee benefits are lost or reduced, and often someone must care for the permanently disabled person. While social security disability or workers compensation benefits may be available in certain situations, the best solution to this potential problem is the purchase of disability income insurance.

So, let's look at some of our options for disability income insurance. There are a number of options when considering disability income policies. First, you may have the option of buying group disability income policies through your employer. Often the employer will pay all or part of the premium as an employee benefit. These plans fall into short-term and long-term policies. Short-term plans generally will begin paying out benefits shortly after the worker has become disabled, but the benefit period is generally for either 13- or 26-weeks. Long-term plans generally do not begin to pay benefits for 30 days to six-months. However, they will pay benefits for a period from two-years up to age 65. Employers who provide both of these plans for employees will usually coordinate the two plans where there is no overlap. While any disability period creates income loss, long-term disability will prove to be the most devastating and, thus, is the preferred coverage if you can only have one plan.

If you are self-employed or work for a firm that does not provide disability insurance to its employees, you may be able to purchase an individual long-term disability (LTD) plan from an insurance company. The plan features along with you age and occupation will play a major role in determining the cost of the plan. When examining a policy, you must consider the cost now and in the future. Many plans are "guaranteed renewable" which means that your policy cannot be canceled by the insurer regardless of changes in your health condition as long as you pay your premium when due. The "guaranteed renewable" contract allows the insurer to periodically increase the premium for the entire class of insureds in the state of residence if claims costs warrant. However, this feature assures that no one insured can be singled-out for a rate increase. This type of contract is more widely available with regard to occupations than the other major type of policy - the "non-cancelable" contract. The "non-cancelable" contract assures that the original contract will stay in force so long as the premiums are paid when due and that the premium will not increase during the life of the contract. Many insurers provide these types of plans for professionals and some executives. For example, these "non-cancelable" policies are popular with medical doctors, dentists, and lawyers.

In addition to the renewal provisions in the contract, there are other major provisions you need to consider in purchasing an LTD policy. First, you need to decide on a benefit period which states how long you will receive the benefits if you become disabled as defined in the contract. Benefit periods include two-, five-, or ten-years, or up to age 65 or 67. From a protection and risk management standpoint, the longer-period policies are preferable. Another choice that you must make is the benefit amount to be paid to you each month if you do become disabled as defined in the contract. To prevent over-insurance and to reduce moral hazard and malingering, most insurers limit the amount of insurance sold to 60 to 70 percent of the policyholders gross earnings. Next, the definition of total disability is one of the most important provisions in an LTD policy as it determines when you become eligible to receive a benefit under the policy. Most professionals prefer the "own occupation" definition. It defines disability as the "inability to perform the material and substantial duties of your regular occupation."

While this is the most expensive of policies, it is desirable for the person who has spent much time and resources to achieve a specialty occupation such as a surgeon. It assures her that if she damaged a hand in an accident that resulted in tremors which no longer allowed her to perform surgery, she would draw her benefit under the LTD policy. Other definitions might not consider her disabled if she can "perform the duties of any occupation for which you are reasonably fitted by education, training, and experience". If she could teach in a medical or nursing school, she would not be considered disabled under such a definition. However, she would suffer a major loss in earning potential in this example, perhaps hundreds of thousands of dollars per year. A final decision that needs to be determined in purchasing an LTD policy is the choice of elimination period, the time after a qualifying disability when benefits are not paid. This period may range from 30 days to one year with 90 days being the most common. All things being equal, the longer your elimination period, the lower your LTD premium. In choosing this period, it is important that you have an emergency fund that will cover your expenses for this length of time should you become disabled.

The risk of long-term disability is one that should be considered by all of us, regardless of occupation. This is a complicated decision that should be approached in conjunction with a professional insurance agent or financial adviser who specializes in the area.

Stanley Adamson, PhD, is an associate professor in finance and general business at Missouri State University and has held the Baker Chair of Insurance since 2008. Adamson specializes in risk management, employee benefits, property and liability insurance, as well issues of broad interest to the insurance industry. Email: This email address is being protected from spambots. You need JavaScript enabled to view it..



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A closely watched index of consumer sentiment rose to its highest level since 2007 as consumers expressed positive views both about the outlook for the economy and for their own personal financial prospects. That confidence level comes on top of falling gas prices, which is putting more money in consumers pockets, and upticks in personal savings rates.

Still, the market has a notoriously short memory, and some of the problems that spooked the market in the middle of the month havent gone away. Chief among them is Europe, which is struggling to stay out of a recession and where a Japanese-style stimulus is much harder to pull off for political and structural reasons.

And the US has its own structural economic problems that could weigh on the market. John Lonski, an analyst at research firm Moodys Analytics, noted that the recovery has been concentrated in the corporate sector and at mostly upper income levels.



Fashion Hounds, the first big fundraiser for the Wags and Whiskers animal rescue organization, surpassed all expectations, co-organizer Kimberly Phipps said.

"We set a goal of raising $10,000 and we made over $30,000 with donations still coming in," she said.

Run by Jodi Baur and her son, Jordan Baur, Wags and Whiskers is in the former Stanislaus County Animal Shelter at 2846 Finch Road, off Mitchell Road. The all-volunteer staff rescues animals from organizations that otherwise would euthanize them. The dogs and cats go directly to a veterinarian to get shots and be examined, and are placed in foster homes so their personalities can be evaluated. Only healthy animals are allowed into the compound.

The fundraiser was Oct. 25 at Salon Salon, with roughly 350 people attending. Business co-owners Chris Johnson and Norma Foster closed the salon and boutique for the entire day to hold the fashion show in which models showed off outfits from the boutique while leading dogs prepped for the event by trainers from Two Paws Up, a grooming and boarding facility in Modesto. The show also included an art and jewelry auction.

The event was dedicated to the late Jan Nelson, who co-owned Valley Sporting Goods, by his son, Ed Nelson, who co-organized with Phipps.

Oakdale woman drives pet food drive

Niki Schiveley, a 27-year-old nursing student from Oakdale, spearheaded a pet food drive to help the Delta Humane Society in Stockton, whose supply had been cut.

Last Tuesday, she saw a posting that the society was having problems and called to confirm. She decided to help, contacting Petco in Riverbank and then making a flier to promote the event. She needed less than 24 hours to organize it, using the media and social media to promote Wednesday's drive while also studying for school exams.

She asked people to drop off food between 3 and 5:30 pm, setting up a table outside the store.

"I stopped everybody who came in and told them we needed help - even a can of food would help," she said.

In 180 minutes, the drive generated nearly 1,000 pounds of dog and cat food, along with $400 in cash. Her 7-year-old daughter, Peyton, spent her personal savings of $25 to buy dog toys at a dollar store.

Schiveley delivered the bounty to Delta Humane Society on Friday.

Schiveley interns at Memorial Medical Center and volunteers in the Oakdale Joint Unified School District and with other organizations while maintaining a 4.0 grade-point average in Modesto Junior College's nursing program.