From Ferraris to foreclosures: the hidden cost of living crisis hitting Britain's wealthy

I’m sure many of you will not have much sympathy for families that may have taken 3-4 holidays per year, have a second home in the South of France or who have had to slum it in the Maserati for the weekend because the Ferrari has gone in for an oil change, but for many of these families the pain of downward financial fortunes is felt in much the same way as for others less fortunate.

Children being forced to move school, cars being towed away by the finance companies, houses being repossessed, family-run businesses being closed down, families uprooted and relocating. The pain is very real for many of these families.

Now I’m not expecting many of you to reach for the violin cupboard - many readers would have experienced financial hardship.

That being said, the devastation of financial hardship can be felt through all layers of society and the issues faced have many similarities whether you holiday in Clacton-on-Sea or in the Cote d’Azur or if you have no funds for your Vauxhall Corsa to be serviced or if you can’t afford juice for the Ferrari.

Pawn shops are a great barometer for the economy. We are the front line in terms of the economic pulse of the country and are able to predict what is going to be reported in the news months in advance.

This morning a client came to me and is borrowing money secured against a Banksy piece of art that was purchased from one of the major auction houses 9 years ago.

Luckily for my client this was a shrewd investment, and it is now worth double (£210k) what he originally paid. He went on to explain that the Cost Of Living crisis and demands for higher wages, along with VAT on school bills, was the tipping point.

He has made the unenviable decision to retire to France somewhat earlier than he anticipated. He explained he had to make the 18 permanent staff of his 4 restaurants redundant.

He went on to talk about the impact on his personal life, his marriage as well as his relationship with his children who are now having to move schools.

New Employment Laws along with the Cost Of Living were a factor in his decision to move. The need to borrow cash secured against his art was a short-term option.

My client had also invested in gold bullion over the last 5 years, and this has seen increases with 35% climb in value in the past 12 months alone.

With gold prices at an all-time high, individuals up and down the country are seeing an opportunity to cash in on the recent hikes and are surprised at just how much their gold pieces are worth.

Another client who had collected gold trinkets over the years, many from the shopping channel QVC as well as High Street pawnbrokers where she was a regular visitor, explained to our team that she had fallen behind with her electricity bill.

She was astonished to find that the items in her bedside drawer, most of which were broken, realised £4,325. The lady was astonished - she literally had tears rolling down her face as she explained how this would be life-changing, and it would sort her out financially for many months to come.

She was expecting a few hundred pounds and had no idea - her electricity bill was approximately £500.

We are seeing what is known in the industry as the “Gold Rush” as more and more people are becoming aware that they are sitting on a small fortune.

This along with the spiralling price of gold is helping some individuals manage their debt accordingly. This is obviously not a long-term solution but it is certainly helping some people as a short-term fix.

So whilst the Lionesses have managed to bring back the gold, UK families too are turning to the asset in order to put a short-term smile on their faces.

________________________________

James Constantinou is the owner of the leading pawnbroker chain Prestige Pawn.

LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.

The views expressed are those of the authors and do not necessarily reflect the official LBC position.

To contact us email opinion@lbc.co.uk