 | Age: 43 Job: Self-employed with video transfer business Salary bracket: £30-35,000 per annum Married to Jane and they have a three year-old son |
Colin McCormick is 43 and lives near Plymouth in Devon. He is self-employed, running a video transfer business. He is married to Jane, a part-time secretary, and they have a three year-old son called Alex. They are also expecting another baby. This month they have had the worst business takings in over a year. Their plans to move to a larger home with more space for the business were also postponed because of duty stamps costs. LATEST UPDATE Our business takings for April were atrocious, the worst month for well over a year. But part of that was because we were paid early for a few jobs in March so it distorted the figures, and I have been busy enough. | INFLATION CALCULATOR This month's personal inflation: 2.9% |
More worrying is that the takings for the start of May are even worse. Hopefully it will all level itself out in the next few weeks. I've had to spend a fair bit this month on equipment for the business; upgrade a video recorder, replace a worn out printer and purchase software. We have to put by several thousand pounds for our next income tax bill at the end of July, so we can't put anything into our savings for a while. By definition, stealth taxes creep up on you, and so it was for us. We have been considering the possibility of moving to a larger home with more space for the business, and last week we visited an estate agent without having really done our homework. We were showed a very interesting house and a few quick calculations showed that we might just about afford it, with a large mortgage. |  The huge stamp duty cost has almost certainly put the house beyond our reach |
We got quite close to making an offer, when reality set in: we had not taken account of the 3% stamp duty quite simply because we hadn't noticed it had crept up from the 1% we assumed. The huge stamp duty cost has almost certainly put the house beyond our reach. The experience left us frustrated and annoyed about a punitive tax, which we think should be abolished if the house market is to start up again. APRIL March was another record month for the business. | INFLATION CALCULATOR This month's personal inflation: 3% |
There were a couple of jobs that I might have shied away from in a better financial climate. I agreed to them despite reservations that they could have been more trouble than they were worth, but both ultimately went OK and were worthwhile for myself and my customers. However with the bank holiday in April, and just a quiet patch for some unknown reason, I can see already that April will be a very poor month financially. We're now pulling together the spreadsheet for the tax year 2008 - 2009, and can see that we're not earning quite as much as we might have expected considering how hard I've been working. | I've had no option but to increase some prices slightly for a few items where post is a significant part of the cost |
A studio format machine broke down this month, and is beyond economical repair, so I've had to replace that at a cost of £100. With the hike in postal prices, I've had no option but to increase some prices slightly for a few items where post is a significant part of the cost. MOT time hasn't been the disaster I feared but still cost something and we have Jane's car to do soon too. I still plan to sort out the paintwork on my car if I get a sensible quote. Our cars are getting on a bit but we wouldn't consider buying a new one unless we really had to, even though we have enough savings. We were all set up to transfer some savings from a poor interest account to an account paying 3%, but then the interest rate on that was dropped to 2.5%. | The chance to move to a larger home seems a distant dream right now |
We then hesitated for a few days but decided that the 2.5% account was easier to set up for us than those which pay just a tiny bit more. One or two better savings deals are available with companies I've never heard of so they were ruled out anyway. We still have some savings on a very good fixed rate bond for a few more months, but when that ends we will have to find some kind of deal. The chance to move to a larger home seems a distant dream right now, our savings are not increasing very quickly and the gap we need to bridge to a larger place is still huge. MARCH February was another very busy month for the business, only a little down on the record January figures. At the beginning of March we saw a dip in business, though it did recover. These ups and downs are just part of running a small business and it gave me a chance to catch up on some background tasks such as servicing equipment, which have been neglected of late. | INFLATION CALCULATOR This month's personal inflation: 3.3% |
It may be a sign of the times that we have seen our first ever bounced cheque. The customer is not communicating about the problem, and we believe we will never recover our £65. At first we were quite upset about this, it isn't like we are a large company who can easily afford such losses. This is going to come out of our own personal budgets. However, we just have to move on in life and not allow problems like these to get to us. It's just part of doing business that sometimes there are losses. We are probably being more cautious with our spending now in case things get hard around summer time. I would like to get a cosmetic repair done on my 15 year-old car, but I can't bring myself to spend a few hundred pounds on it just now. Perhaps if it sails through its MOT shortly, then I'll get it done. | We are probably being more cautious with our spending now in case things get hard around summer time |
We looked again at our savings account. The bank's website is very vague about the interest being earned, it seems to be deliberately hiding this information! So we contacted the bank and found that they were paying just 2.11% AER. We will be moving those savings to accounts offering 3% AER. Not that 3% is much to get excited about either. A letter from the Nortel UK Pension plan has done little to make the situation look any better. It will probably be two years before we know where we will stand and if the government's Pension Protection Fund will salvage it. Since that will be well beyond the next election, you can see why this government does not consider it necessary to pledge the funds to support it. I find myself lacking faith in pension schemes and I'm so I'm not increasing contributions to my current stakeholder pension, I could be better off looking to invest in my own business instead. FEBRUARY Strangely perhaps, business is still booming. I'm still working excessively long hours and getting exhausted at times. January was another record month in turnover for the business. I have had to invest a bit in equipment lately, not least because I've had the stress of serious breakdowns on two expensive machines. It seems as though, for many people the recession has not affected them, so work keeps flowing in. | INFLATION CALCULATOR This month's personal inflation: 4.4% |
I'm still receiving some commercial contracts too, though I would still prefer the balance to be more towards commercial than domestic. I almost never turn work away, we may be thankful for some savings later in the year. We're doing OK financially at the moment, but need to have some reserves because we get hit with some motoring bills in spring. Shopping bills have steadied, though we did see the price of our favourite local free-range eggs rise again. I'm still worried and annoyed by the collapse of Nortel recently, not so much because my shares were wiped out (after all, shares are supposed to be a risk), but because of the impact on my pension with them. The government's Pension Protection Fund (PPF) could only pay 90% of the pension which should have been due to me, and anyway the collapse of Nortel's UK pension is so huge (43,000 members and a £1 billion deficit) that it will cripple the PPF in one hit. | The interest on our saving we have in an ordinary savings account, is now so miserable as to be barely worth it. |
Successive governments have encouraged us to contribute to private and company pensions, yet it really feels like it wasn't worth it. The interest on our saving we have in an ordinary savings account, is now so miserable as to be barely worth it, and certainly below inflation. I was narrowly outbid on an expensive machine I want which came up on eBay. Perhaps it is just as well, it would have been a major investment right now, having just paid last year's tax bill. Some good news: We're expecting a new member to the family, due at the end of June. Our present house is a bit small for us already, so it will be a struggle at times, but we think we can cope for now and won't need to move for a year or two. JANUARY The business did very well throughout December. I've been working every day for several months now without a proper break, including Christmas Day! I had expected the work to fall off during January but it at the moment it is still busy. My income isn't properly reflecting the very long hours I'm working, but I don't think it is a good time to increase my prices. | INFLATION CALCULATOR This month's personal inflation: 5.8% |
My hopes for an eBay bargain on an expensive piece of equipment I want came to nothing, so I will have to see when another suitable machine comes up and try again. Prices on some older technology have wilted recently, but more modern professional machines are stubbornly expensive. We've had our income tax bills for 2007 - 2008 which have to be paid at the end of January. It's not as bad as I had expected, though we do also have to pay in advance for part of next year's tax, so I had to pull various savings together in order to write a very large cheque to H.M. Revenue & Customs. Some of our savings are earning a good rate of interest in a fixed rate bond until later in the year, but some are in a deposit account which has suffered a large drop in interest (even greater than the base rate change). We will have a look to see if we can get a better rate elsewhere. | Prices on some older technology have wilted recently, but more modern professional machines are stubbornly expensive. |
Some years ago I worked for the Canadian Telecoms company Nortel, who have now filed for bankruptcy protection. I had bought shares with them as part of a staff purchase scheme, and sold half my shares with them around 2004, leaving some £7000 worth in place as a long term investment. Those Nortel shares have now been wiped out and I have made an actual loss on how much I paid for them. Furthermore I have a pension fund with them, the future of which is uncertain. I'm very concerned about that because I had transferred in a private pension to Nortel when I started working for them. I anxiously await news on what happens next with this pension. Click here to return to the families front page Click here to read Colin McCormick's reports from 2008
| 
One-Minute World News 
E-mail this to a friend 
Printable version 
BBC News
Bookmark with:
What are these?