Should we punish savers to help the feckless?

[Bagpuss]

Interest rates reflect the state of the economy. No one is borrowing, everyone is saving because they are scared of investing in stocks and shares, property or businesses. Interest rates are therefore low in order to stimulate people into spending.

How hard is that to understand?

Not true, look at the figures, savings are at a low, GB is tring to stimulate debt funded spending at a time when the banks want to attract savers

With the wholesale money market not functioning it is vitally important that the banks attract savings and deposits – yet lower interest rates will encourage savers to look around for alternatives, or force them to spend capital to maintain their standard of living.

And it’s already happening. Savings levels fell by over £19 billion over the last quarter although that is balanced by a net reduction in debt of £23 billion. However, those reducing savings are likely to be the elderly who need savings to subsidise income while those reducing debt are more likely to be those in employment paying off their credit card debts.

Savings levels almost halved over the last quarter to an all-time low, from £38.5 billion in quarter two of 2008 to £19.3 billion in the third quarter - a reduction of over £19 billion. Is this really what the government wants? Isn’t it about time we thought of savers?


I think you are confusing saving with not spending

[d000hg]

Your maths are OK, but 1% seems totally unrealistic.

Up to a few months ago, which is when the £20 we are talking about would have been be earned, 5% was easily available.

A differential of £20 a week is approximately 5% annual interest on 30K coming down to 2%.

The 30K could be the result of a small endowment, cash stowed away during 40 years of work, anything. Lots of people trying to save a bit for themselves only ended up with these sort of figures.

Anyway, why are we implying that we should not consider old people with savings, even those with low levels of savings? Are you Gordon Brown?

If you are getting a decent pension and have a reasonable amount of savings, you are not the person facing the most problems. You are well off compared to people who risk losing their houses after being made redundant.

Maybe a bit socialist to suggest helping those in greatest need at the cost of those better off, but any change will be bad for someone. And it seems better to have the people who are disadvantaged being those who can probably afford it.

[DimPrawn]

If you are getting a decent pension and have a reasonable amount of savings, you are not the person facing the most problems. You are well off compared to people who risk losing their houses after being made redundant.

Maybe a bit socialist to suggest helping those in greatest need at the cost of those better off, but any change will be bad for someone. And it seems better to have the people who are disadvantaged being those who can probably afford it.

You mean the fcukwits who bought property at 8 times salary?

They really do need help. Muppets.

[d000hg]

Your maths are OK, but 1% seems totally unrealistic.

Sorry, I was talking specifically about today's 1% change, not the total change over the last few months. Yes, a 3% change means a weekly difference of £20 on only £33K of savings.

[d000hg]

You mean the fcukwits who bought property at 8 times salary?

They really do need help. Muppets.

So what... the fact is they bought them. You can't change the past. They still need to be protected from all losing their homes otherwise everything will REALLY go bad. These are professional people in many cases, not work-shy benefit leeches. Most people are fairly ignorant as evidenced by how everyone kept paying such stupid prices... the government's role isn't to let stupid people flounder and care only about the intellectual elite.

[DimPrawn]

So what... the fact is they bought them. You can't change the past. They still need to be protected from all losing their homes otherwise everything will REALLY go bad. These are professional people in many cases, not work-shy benefit leeches. Most people are fairly ignorant as evidenced by how everyone kept paying such stupid prices... the government's role isn't to let stupid people flounder and care only about the intellectual elite.

Fook em.

[SallyAnne]

Fook em.

Prawn style reasoning at it's finest.

[d000hg]

Fook em.

Then the country will collapse even more, and hardworking, dedicated contractors will end up having to sell even more sports cars.

[Doggy Styles]

Does it occur to any of you that in order to save someone has to borrow. No one is borrowing so there is no demand for savers money which is why interest rates are so low. Why is it some of you stupid fools believe that it is virtuous to save yet wrong to borrow?

You're normally quite sound dodgy, but that is a load of old bollocks.

Firstly, until a few years ago, banks more or less balanced lending and saving, which is sound business sense. Now they find they have lent 700 billion more than they've got in savings. Oops. The only way around this is for the balance to switch the other way. That means they need more savers. Lots of them.

Secondly, it is virtuous to save for a rainy day, and all days are rainy when you get old.

Thirdly, it is not wrong to borrow, but it is wrong to overborrow. One can understand the ignorant masses doing that, but what is diabolical, and stupid for any business, is overlending.

Lastly, the more I think about it, the more convinced I am that you are having a laugh.