I guess we all have a whinge now and then at the hassles
and costs of living here. Visas, Kitas, training levy, fiscal
tax etc. are all irritations. Medical insurance and other
expenses all add to the strain on the family budget. Think
of all the money you could save by returning to your home
country. But then think again! Earlier this month I paid a
visit to the UK and it provided a useful reminder that the
grass is not always greener on the other side.
Banks are not what they used to be!
In recent years you may have noticed a deterioration in the
personal service you receive from international banks. Not
to mention a sharp increase in charges. A few years ago I
placed a number of my clients in Jakarta and Bali into a money
fund, similar to a bank account, with Rothschild in the Channel
Islands. The account paid a good rate of interest, accepted
third party payments, paid standing orders – even in
US Dollars – free of charge, did not charge for transfers
and offered a free VISA card facility. Needless to say, it
became a very popular account. But then they started to withdraw
some of the facilities and subsequently transferred all the
money fund accounts to a company called Insight, which was
part of the Halifax and Bank of Scotland. Here the administration
was so bad that I spent hundreds of hours over the next two
years lodging complaints on behalf of clients.
And now – a bank only for the wealthy!
This month HSBC, which made almost one billion pounds profit
last year, announced that one of its branches in a village
near Poole in the South of England, would close its doors
to customers with less than £50,000 (= Rp.900,000,000)
in their account or with a salary of less than £75,000
(Rp.1,350,000,000) a year. ‘Loyal’ customers who
did not meet this requirement could still use the ATM machine
– the only one in the village – but they would
no longer be able to enjoy personal counter service. For that,
they would need to travel a couple of kilometres to another
branch. For those without personal transport, including many
pensioners, this would mean a degree of hardship. Needless
to say, it has created something of a furore, but it is a
further indication that small customers are no longer economic
propositions. Much the same applies throughout the financial
services industry where I now advise clients not to take out
a contractual savings plan below $500 a month as the fixed
charges take so much away from the performance.
Pensions – a gloomy picture in the West
While I was in the UK there was a fair amount of press coverage
on the increased taxation faced by pensioners as a result
of recent budget changes. There was also a headline in the
‘Sunday Times’ that read ‘Britain faces
being a nation of impoverished pensioners.’ It was estimated
that in 30 years’ time state pensions would be worth
only one tenth of the average national wage. This situation
is by no means unique to the UK. It is an indication of things
to come in all countries. Expats in Bali, many of whom are
still living in denial on the subject of pensions, are no
exception!
Cost of living – a rude awakening!
Have you complained recently at paying Rp1,000 for parking
somewhere? Then spare a thought for the plight of people in
the UK who own cars. It cost me £5 (Rp.90,000) to park
my rental car for a couple of hours at a seaside resort in
Wales. A TV report also highlighted the cost of parking at
some public hospitals – up to £20 (Rp360,000)
a day due to the government’s requirement that hospitals
make a profit. It can easily cost you £40 (Rp.720,000)
to fill your petrol tank. Yes, petrol is still relatively
cheap in Indonesia! A meal for two at a modest Chinese or
Indian restaurant can set you back up to Rp 720,000.
If you can relate these prices to the current basic state
pension of around £80 (Rp.1,440,000) a week it is pretty
clear why you don’t see too many old people whooping
it up in Britain.
Looking for new property? You will not find much below £200,000
or even £500,000 (9,000,000,000) in some areas. As a
consequence a report this month highlighted the plight of
young people who were living longer with their parents, not
out of choice but because they could not afford to buy a house.
If you have children who plan to settle in a western country
you may well have to give them a lot of help to get on the
property ladder.
How is life in the ‘kampong’?
While in the UK I visited my ‘kampong’, a small
town in Wales called Pontypridd. What were the newspaper headlines
there? – The cost of housing or the global pensions
crisis? Not quite. There were more parochial issues like one
headline: ‘Guard your knickers – a washing line
thief is on the loose!’
I guess kampong life is much the same everywhere. But as to
whether life is easier back home I can only say the jury is
still out.
Colin Bloodworth is a senior adviser with Financial Partners
International. The opinions expressed are his own. If you
have any questions related to personal finance you may contact
him at 021 520 8099 or colin.bloodworth@financial-partners.biz
