Page last updated at 11:28 GMT, Monday, 19 January 2009

Squeeze panel: Colin McCormick

Colin and Jane McCormick and their son James
Age: 43
Job: Self-employed with video transfer business
Salary bracket: 30-35,000 per annum
Married to Jane and they have a two-year-old son

Colin McCormick is 43, and from near Plymouth, Devon. He is self-employed, running a video transfer business.

He is married to Jane, a part-time secretary, and they have a two-year-old son called Alex.

Their business hasn't been affected by the credit crunch but they have been working hard as they are concerned difficult times might come in 2009.

Colin is also worried about his pension.

DECEMBER
The business takings for November were very good with the run up to Christmas, but perhaps not as good as I might have hoped, considering how hard I'm working.

We've had few good large jobs in from businesses and studios, but also some small and sometimes fiddly jobs from people wanting Christmas gifts.


If only the tax cut had been in income tax rather than VAT, it might have been beneficial.
I'm absolutely exhausted by it all and I'm in complete denial about Christmas shopping, which will have to wait until the last few days. Jane is a little more organised and has started some Christmas shopping.

We want to take advantage of the low prices which equipment is being sold for on eBay at the moment. The professional Betacam video deck you may have seen on our video clip last month cost 200 last year. I've just bought another one as a spare for less than 30.

Next year we hope to get a Digital Betacam player. They were selling for 3000 earlier this year, so that will be a significant investment.

I've had a statement from my stakeholder pension provider. Over 27% of my pension's value has been wiped out. I have two other company pensions from previous employers, and doubtless they will be suffering just as badly. I can only hope these recover, and don't collapse completely in the next 15-to-20 years.

INFLATION CALCULATOR
This month's personal inflation: 6.9%

Inflation is supposed to be falling but I can't say we have noticed a fall in the weekly shopping bills. The VAT drop hasn't helped either, as many smaller shops have simply ignored the change. If only the tax cut had been in income tax rather than VAT, it might have been beneficial.

Most of our savings are in a fixed rate bonds, so unaffected by the latest drop in interest rates for now, but other savings we have will soon be earning virtually no interest at all.

I heard that a previous employer of mine was making redundancies this month, so I'm glad I started my business when I did. It would be hard to start up now.

It seems that the recession has only just started, and the full impact hasn't been felt by everyone yet. We are very concerned that early next year the business will be hit hard.

NOVEMBER

Colin says that financially his family will be alright for the rest of this year

We are saving for a bigger house and have some savings.

With interest rates falling, we're glad that we took out a fixed rate savings bond earlier in the year, so that won't be affected.

Business was reasonable last month.

We are starting to see the Christmas work come in, so financially we should be OK for the rest of this year.

What is also important to us though is professional work from studios and businesses.

INFLATION CALCULATOR
This month's personal inflation: 7.9%

We worry that perhaps that kind of work will be harder to find as we go into next year.

It is businesses as much as individuals who are finding it hard at the moment.

OCTOBER

With being away for two weeks on holiday during September, the business earned only half the normal amount. It is one of the challenges of being self-employed, and it means we were not able to put any money aside this month towards the tax bill we will get at the end of the year.

We have a little gadget which measures the power consumption of appliances, and with this I have gone around the home and business equipment to see where it is worth putting in the effort switch off.

The savings account for that tax bill is with the Bradford & Bingley. We didn't panic about that company's demise as we knew that the account would be protected, but we'll watch the interest rate. Our savings bond is not with an Icelandic bank, we had made a point of avoiding them because they looked fragile months ago.

We studied the recent price increases from our energy supplier and found that particularly for electricity, the increase in what they call the "Primary Units" (the first units used) is a whopping 38%, yet the Secondary Units which make up the largest part of a higher energy users' bill (like us) have risen just 3%. Even so we've had a look at what we can do to reduce electricity consumption.

INFLATION CALCULATOR
This month's personal inflation: 7.9%

It's often said that we should all switch off or unplug equipment which has a standby function, but this is not always convenient. We have a little gadget which measures the power consumption of appliances, and with this I have gone around the home and business equipment (used for video transfers) to see where it is worth putting in the effort switch off.

We found fully switching off three Betamax video recorders from standby will save 21 per year. But unplugging a Minidisc recorder saves 2 per year and so isn't worth the inconvenience. I installed a new energy efficient power supply in my business computer which is always on, and that will pay for itself in a couple of years.

We often would leave kitchen cabinet lights on because the switch is inconveniently placed, so we installed a remote control light switch to overcome that. A supermarket was selling energy saver light bulbs for 10p each and we ran around Jane's parents' house fitting them, as we have energy savers already.

We had several quiet days with the business, which was worrying, but it has picked up again. We had a large unexpected car repair bill and had to buy a whole new winter wardrobe for our little boy, so it has been a lean time for us.

SEPTEMBER

By the time you read this we will have enjoyed a well-earned holiday in Lanzarote. The island seems to have suffered from the Spanish property crash, with dozens of abandoned part-built hotel and appartment skeletons.

We got our Euros just after the chancellor's remarks which depressed the value of the pound, giving us a very poor exchange rate and making many purchases abroad look very expensive.

However, we feel lucky that we haven't become victims to the collapse of travel companies which has affected so many people this year.

The video transfer business was much better in August than July, and with having to complete work before going away it was a strain on the whole family at times.

We will have to see how the rest of the year goes. What we are really not looking forward to is the tax bill to pay in January.

One business related event I did notice this month was that my largest supplier of materials was out of stock of almost everything. They are a fairly small local company which I've used many times, but I wonder if they are in financial difficulty. I had to place my order with a different supplier who turned out to be cheaper, too.

It's odd how increasing prices for individual food items are so easy to miss. Who remembers how much some small item cost a week or two ago? So it is only occasionally I notice something significant.

This week we treated ourselves to a box of assorted chocolate miss-shaped biscuits, not something the waistline would tolerate buying very often. I went to the checkout with a 2 coin expecting 1p change, just like the last time we bought these about 6 months ago. But I was 30p short, because of a 15% price increase.

With the low mileages we do, petrol prices don't hurt us as much as people with long commutes, but even so it is helpful to get unleaded at 109.9p now.

AUGUST

WEEKLY STAPLE FOOD BILLS
Bread 1.25
Salad (5 times) 1.00
Fresh Organic Milk, skimmed, 2ltr 0.98 (2 a week)
Fresh Organic Milk, full fat, 4ltr 1.64 (1 a week)
Apples gold, 1kg 1.48
Bananas 0.67

Our video transfer business certainly took a noticeable dip in July.

Of course this may be just a seasonal drop or a random event. We shouldn't worry too much, particularly as business did pick up again at the end of the month, and I've been very busy lately. The prices of materials I buy for the business have not changed in recent months.

We've been rate tarts with our savings and set up a one year fixed bond. It's odd that with credit so hard to find, savings deals don't seem to be getting much better.

We put in everything we could afford, but hope we haven't overdone it and left us short of enough for a holiday. We need a break! We hope to get away in late summer.

Our energy supplier has a fixed direct debit payment system. No doubt they will increase the monthly payments for this soon.

Our gas consumption is not very high anyway, but the business uses quite a bit of electricity (equipment is running day and night) so we will notice that.

We've seen the weekly shopping bills rising, especially for our essentials like bread, eggs and salad. We are being very careful to make sure we do not ever allow food to go out of date and be wasted.

JULY

I run my own business, a video transfer service, for both private customers and commercial contracts. This business has been running for almost a year and the work is carried out from the family home.

Jane works two days per week, and has a fairly short drive to work.

We have paid off our mortgage recently, and are trying to save towards a larger house with more room for the business, in the next few years.

We are lucky because we don't do much mileage, so the high fuel costs have not impacted us much directly.

We are seeing an increase in food costs, but food isn't usually a very high bill.

Poor interest rates are a concern, in that our savings may not be keeping up with inflation, let alone making any real gains.

Our biggest concern with an economic downturn is that the business may suffer.

So far we have seen a slight slowdown in business, but this may be just a seasonal variation and nothing to worry about.

Autumn to Christmas time will be the test of whether there has been a loss of business compared to last year.



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