The whole episode seems to ba fantasy. When Timothy goes to a scrap yard to get his handbrake repaired (why would he go to a scrapyard for that!) and the car is crushed.
Just as Mrs Lumsden has been planning to take her driving test. (Never knew she was even taking lessons.)
It all leads to Timothy wishing that he was not even born. After all he accused best friend Frank and the barmaid at the pub of being a thief. Mrs Lumsden's wedding ring has gone missing and she thinks one of them stole it.
Only that old woman Timothy saves at the train crossing turns out to be the fairy godmother.
Now Timothy sees what would life be like if he was not born. Frank would be in a dead end job as a barman. His sister would be an only child and infantilised by her mother.
It's a retread of the James Stewart movie with all the tropes. I did think Timothy might be better off if he was not born.