Friday, Jun 29, 2007
Squeezing them for every penny!
Guardian: Savings rate hits 47-year low
When did the public become so hopeless over money management.
"The new figure will stoke concerns that with consumer debt at record levels, many people are running down their savings in the face of higher interest rates and spending beyond their means".
Posted by paul @ 10:44 AM (55 views) Add Comment
12 Comments
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1. tyrellcorporation said...
'When did the public become so hopeless over money management'
The day the Governement realised that debt was in fact the only way to keep the carousel going!
2. mattpascoe said...
Im not bloody suprised! When average earnings to buy an average house would cost well in excess of £1k a month, no wonder people cannot save.
Recession looming....
3. royston said...
Who wants to save at current rates of interest? Offer me a decent interest rate and I would consider saving more!
4. Royston said...
.............like, say, 12%.
5. shipbuilder said...
Naively, stupidly, or not, people are living the life that they were lead to expect from a young age. Successive generations are lead to believe that people will be richer in general, better educated and with more free time and more 'luxuries'. Instead thay are finding that with the longest working hours in Europe, they are actually getting shafted with less pay. Perhaps they are spending at the level that they believe their working hours merit? After all, if you were a child and both parents were working 10 hour days, wouldn't you expect them to have a big car and big house?
Just a theory, but to an extent, why shouldn't people feel like this?
6. sold 2 rent 1 said...
"The household savings ratio fell to just 2.1% in the first three months, half the level of the fourth quarter and the lowest reading since 1960."
This is the classic k-winter debt spike before the major collapse.
This is one more economic measure that shows we are 2 years behind the US in this economic cycle.
When will the savings rate go negative? Have we ever had a negative savings rate?
When will HP peak? Q4 2007?
7. Mark Wadsworth said...
This "savings ratio" is a completely meaningless figure.
1) The amount of REAL WEALTH that an economy is important - more houses, well educated people, profitable businesses and so on.
2) The next thing is how wealth is shared - quite clearly as things stand it is all to pot, because young people have to take out ridiculous mortgages, so there is a shift from young to old - and also the credit culture has got a bit out of hand.
8. Samone said...
I think it was in Nov/Dec 2005 the US population actually spent more that it saved - something that has never happened in history. look where they are now...
election in September - crash in October?
9. sirgoogle said...
For those who live beyond their means I have one word. Prats
These is a chap I know who winges because he has 19K of unsecured debt. Oh yes he also had some BTL- which he sold - but still cannot cover the debts - and then goes off on holiday twice in 4 months.
I have zero sympathy.
10. Exiled said...
of course people cannot save when debt levels are so high most of their disposable income paying off huge mortgages on ridiculous overprices houses. of course once housing had been excluded from the cpi stats of course the result of that has been unrestricted increases in house prices. had it been included its evident that interest rates would have to rise to stem inflation. i recall the ex governor of the bank of england stating that cheap money was the only way of preventing a recession, that is primarily why you have had this massive increase in house prices. so the market has been manipulted by the government, used if you like as an economic tool, very reckless in my opinion, incurring massive debts for ordinary people, the social consequences of all this i shudder to think, only in the uk.
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12. Stillthinking said...
So, in fact, having no debts, no inflation weakening cash, and a terrible credit rating turns out to be a crafty plan after all. Who's the daddy now?