Wednesday, Apr 21, 2010
Save for a home of your own
Telegraph: Britain's savers face 'worst time' to save
"Financial experts warned it is now the “worst time” to save following a drop in savings rates during the last six months and a rise in inflation to 3.4 per cent. It means savers are out of pocket by more than £200 in a year on a £10,000 savings deposit once inflation and tax is taken into account". (Hint: Maybe the government wants us to spend more?)
Posted by alan @ 10:04 PM (1093 views) Add Comment
9 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. paul said...
And of course this is exactly what the Bank of England wants - it is an optimal solution for them because they are an unseen political force and have no choice other than to invest in riskier assets like gold or houses.
These are dark days for the sensible and worryingly good days for the reckless.
2. fallingbuzzard said...
Savers never beat "inflation" but they don't lose capital.
3. paranoia blue said...
paul @1
Gold risky? Hmmm
However, I agree with your general sentiments
4. bidin'matime said...
Inflation is only a problem to savers if what you are saving for rises with inflation - as the consumer price inflation we are now seeing is a catch-up following the disproportionate rise in house prices over the last decade, those saving for a deposit have little to fear - house prices are still set to fall...
5. mr g said...
It's hard work but by using a number of current accounts, Santander / Alliance & Leicester, Lloyds TSB and Halifax for example and transferring the same £1000 between the accounts it's still possible (just) to equal or even beat CPI inflation in terms of the percentage return.
OK, some of these accounts only pay a reasonable rate of interest on the first £2500 but the percentage return is nearer 4% than 3% NETT and before someone points out that the Halifax reward current account only pays £5 per month = £60 pa, consider this.
If you "recycle" the same £1000 over 12 months you have a return of £60 = 6% nett or 7.5% gross. OK, that's peanuts I hear some of you say but the name of the game as I see it, is to maintain the AVERAGE percentage interest rate at the highest possible level and if you can achieve an overall return in the region of 3.5% NETT, your savings are not being eroded with inflation at the current level. If inflation rises considerably, you would obviously have to review the situation.
The NS & I bonds pay 1% fixed plus RPI, does anyone know whether the interest rate on a NEW issue, not the current issue. would be higher than 1% if interest rates rose?
6. James said...
It's the very people that are keeping the economy going financed - savers (the money that is being lent out and keeping the economy afloat) - that are paying the hardest price for the government economic failures - negative returns, loss of job and income. It would be funny if it was perfectic - shameful. With a kick in the teeth like this, what's the point of being a good rationale citizen? Might as well spend it all on recreational pursuitsand then claim benefit for the rest of your working life. Actually sounds like a good plan!
7. letthemfall said...
I wonder how the incipient inflation will pan out. It seems unlikely that wages will rise commensurately, so inflation means a fall in earnings as well as reduction in wealth. Let's hope the house price prop (ultra-low interest rates, desire of the rich to buy everything with bricks) tumbles away.
8. mr g said...
@LTF "I wonder how the incipient inflation will pan out. It seems unlikely that wages will rise commensurately, so inflation means a fall in earnings as well as reduction in wealth."
I think that a lot of people under 40 are in for a big shock as their standard of living drops as a result of inflation and low pay increases.
9. This comment has been removed as it was found to be in breach of our Blog Policies.