The global financial crisis occurred in 2017 hit the UK economy more shockingly than the Wall Street Crash of 1929. Until the crisis, the economy faced the boom period, low inflation and low interest rates, which encouraged as many borrowers to take out money as possible and investors to purchase high-risk investments.

During the economic boom, investors were able to invest with the help of securitisation process that drew attention of many less wealthy borrowers to buy a mortgage. However, the crisis burst the bubble when house prices dropped down leaving mortgage buyers no longer financial stable to make interest payments. As a result, institutions also went into huge losses.

The three areas of your finances have been taken into account - homes, savings and borrowings - to measure the impact of financial crisis.

Homes

The average UK prices before crisis in September 2007 were £190,032 that fell to £154,452 in March 2009. This is not good news for homeowners. During this phase, the prices of houses in London and the south-east soared, but the picture is different elsewhere in the country.

Though a decade has passed by since the crisis has occurred, house prices have still not gone up. Homeowners are still struggling to get a good price by resale of their property.

Northern Ireland and related parts, Scotland and Wales are most affected area of the country where house prices continued to diminish until four years after 2008. The significant reason for such a harsh scenario was poor availability of credit and weak economic growth.

The house prices in the capital started to go up in 2010 when employment and overseas investors rose. It means the house prices across the city were more than 50% of the prices in 2008. According to experts, prices will continue to rise but the pace will be less than in the last decade. Further, they estimate that property prices will fall to 2.4% by the end of this year. However, some predict that prices will increase by 2.5% over the next two years.

Savings

The last decade has been disaster for various savers who had been receiving decent returns before. They could earn £652 on the investment of £1,000 a decade before the crisis has emerged. However, after the crisis, the interest dropped down to £149 on the same amount of investment.

Prior to crisis, you would get 5% on instant access savings, over 6% on a one-year bond and 7% on a five-year bond from a popular financial institution. However, after the crisis, the interest rates are no longer generous. You will get 1.35% interest rate on instant access, 2.05% on one-year bond, and 2.7% on a five-year bond. People can still get the best interest rates because more than 30 new banks and 40 other financial institutions have entered the savings market since the crash. Yet, the market is brimming with traditional financial institutions. They hold about 85% of the share across the country with many savers repaid very little interest rates.

"While the share of savings market has risen up around 5%, the new entrants have taken much of growth in the market rather than make significant progress against the big players," said Mr Blower. Experts still believe that things may improve soon. Savers might be optimistic about the future because the industry is looking to make efforts to protect them from the lowest interest rates.

Borrowing

The crisis left no significant improvement in the economy rather they left the citizens alone to handle the pressure of debt. Since crisis, average household debt has climbed from £3,000 to £4,000 throughout the decade. Among various reasons, one of the significant reasons for a rise in debts was easier availability of money with plastic cards.

Credit card companies have been providing cards on interest-free periods to attract a large number of borrowers. Easy online application procedure and high credit card limit spurred on borrowers to use credit cards every time they need money. The use of credit cards increased even for a smaller amount as people had stopped getting decent return on their savings.

Until 2008, the maximum length of zero-percent balance transfer was 15 months, but now it has been extended to 36 months. The more the lenient terms, the higher the indulgence on debt.

Experts are still not certain whether this should be continued or not as some customers smartly managed to transfer balances to pay little or no interest and to get rid of debt, but the others struggled to repay the debt within the time unless the 0% interest rate time expires. Failure to repay the debt within this period leads to imposing of high APR based on the total amount of borrowings, which means you will end up with paying high interest rates despite your poor repayment capacity. At last, you find yourself caught in a vicious circle of debt.

Despite the risk of high APR, the debt level continued to rise since financial crisis. Experts believe that easy availability of these loans during unexpected expenditure could be the reason for high demand of these loans. You do not need to get into hassle of applying for a personal debt, but paying back the debt can be painful and difficult for some borrowers.

The scenario of overdrafts has also changed since the financial crisis has occurred. Most financial institutions, including online lenders have changed the way they would charge traditionally. Now they charge daily or monthly fees. Loan companies like British Lenders state that daily fees are easier to comprehend for borrowers. However, these changes have caused additional burden on the pocket of borrowers.

The bottom line

The impact of financial crisis has not been good across the country. The simple way to wisely manage your finances is to pay off your debt on the scheduled date. Try to ignore any temptation. Borrow money only from reputed online lenders. Compare loan deals and choose the best the fits your budget. Set aside money for a rainy day so that you do not need to rush after expensive short-term loans.