19 December 2017

A Carbon Christmas Carol: the Ghost of Financial Past

In Charles Dickens’s timeless story, the protagonist Ebenezer Scrooge is visited by three ghosts of Christmas Past, Present and Yet to Come. These three ghosts highlight the mistakes that Scrooge has made in his past, his present and how, if he continues down his self-serving path, he will ultimately face a lonely future.

In keeping with the season, I have prepared warnings from our three ghosts of ‘financial’ Past, Present and Yet to Come. We start with the Ghost of our financial past.

The Ghost of Financial Past

In our first ghostly visit, we are shown the mistakes of our financial past.

With rising tuition fees, the largest contributor to student-debt in England, Wales and Northern Ireland, average student debt has exploded in recent times, with Sebastien Burnside, a senior economist at NatWest, predicting that the UK’s student debt will double to £200bn over the next six years.

This level of debt is less a mistake than a ghostly, ominous warning from our financial Jacob Marley. With the cost of education spiralling, a very serious look will have to be taken by those entering higher education at the associated costs, as well as at possible alternatives, such as apprenticeships and vocational training.

This dual education system has long been the preferred method in Germany, known as Duales Ausbildungssyetm, and, with the UK government very much in favour of promoting this, it is becoming an increasingly attractive option for those wishing to learn whilst receiving an income.

For those attending university or college, taking on unnecessary student debt is a definite ghost of our financial past, with the National Union of Students (NUS) providing the estimated cost of living for students as £12,056 per annum. If the entirety of this cost were to be met from student loans – which receive an interest rate of 4.6% p.a. whilst the borrower is studying – you would leave university after a five-year course with a debt (not including tuition fees) of £66,086.

The effect of older generations, such as parents or grandparents, helping meet some or all of this cost cannot be overestimated. With the Institute of Fiscal Studies estimating that three-quarters of graduates will be paying off their student debt into their 50s, avoiding this financial millstone through assistance from family members could prove invaluable.

The benefits and impact of having a rich benefactor might be slipping more towards Great Expectations than A Christmas Carol in our Dickensian look into our financial past, so our journey must jump ahead a couple of years now, to where we are in employment and beginning to see our expendable income on the rise. Now we value our net pay as sacrosanct. But then, our second financial mistake occurs: we look at our pension contribution and think, “I’d rather have the money now”, and we select the lowest contribution total, or even worse, we opt-out of the pension scheme all together.

Financial decisions for the future should not be taken at the expense of impacting on your current standard of living without careful consideration, but the UK is forecast to be sitting on a £23 trillion gap in retirement provision by 2050, forcing many to work well into their 70s. So the best way to avoid this is by starting your pension from a young age, even if your pension contribution is relatively small at the outset. Missing out on the compound effects of investing early and maximising the period of tax-free growth would be the biggest mistake of your financial past.

Having turned our eye on the mistakes of our financial past, tomorrow we face a second ghostly visitor at the foot of our bed: The Ghost of Financial Present.

Jonathan Young is a paraplanner at Carbon. You can view Jonathan’s profile by clicking on his name, or contact him via email on

Sign-up for our Carbon Catch-Up Newsletter


Sign-up for our Carbon Catch-Up Newsletter.

* indicates required

Carbon Financial will use the information you provide on this form to keep in touch with you and to provide updates and marketing. Please indicate below that you are happy to receive our updates in the future:

You can change your mind at any time by clicking the unsubscribe link in the footer of any email you receive from us, or by contacting us at We will treat your information with respect. For more information about our privacy practices please visit our website. By clicking below, you agree that we may process your information in accordance with these terms.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.

Contact us today...

We have offices in Edinburgh, Glasgow, Aberdeen, Perth and London. You can contact us at any of our offices, or by email.

Carbon Financial Partners Limited is authorised and regulated by the Financial Conduct Authority. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK.

The Financial Conduct Authority does not regulate some forms of tax advice.
Registered in Scotland #SC386400.
Registered Office: 61 Manor Place, Edinburgh EH3 7EG, Scotland.
© Carbon Financial Partners 2023

Client Account | Personal Finance Portal | Privacy Notice | Cookies