Saturday, Aug 21, 2010
What happens when the money's gone?
BBC News: Savings raided to cover income shortfalls
Almost a third of adults in the UK have raided their savings over the past year to cover shortfalls in their income, according to new research. The survey, by investment firm Schroders, estimates that savers have taken out a total of £60bn. They have withdrawn an average of £4,600 each. With interest rates at a 300-year low and the better saving deals pulled from the market, there seems to be more incentive to spend rather than save. Those retired or approaching retirement were most likely to have dipped into their reserves to make up a shortfall in income. "The amount of capital being drawn down suggests that it is not just rainy-day funds that are being drained, but a significant proportion of individuals' long-term savings," says Robin Stoakley of Schroders.
11 Comments
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1. enuii said...
Having 2 kids stuck in further education and another starting his GCSE's this year I can exactly agree with the figure quoted above as we slowly use up savings and shares as we subsidise our kids extended education in the hope that they will eventually find decent employment and leave us in peace!
My parents were lucky as I never asked them for a penny once I was 18 and had my own place at 23 plus with the lack of 24hr tv and digital meeeja there was no incentive for kids to stay up till 3-5am every night and sleep in till 1-3pm everyday during the summer - I effectively get less sleep now than when they were babies!
I feel better now for getting that off my chest, how many other parents are in the same position I wonder.
2. Petrodollar said...
I am in exactly the same position enuii.
Your words could be mine.
3. icarus said...
"More incentive to spend rather than save" assumes that the spending is on things we could do without. I don't think that's the case.
4. paul said...
So much for promoting a savings culture. Nice one Government and Bank of England!
Your combined track records for responsibility and prudence remain in tact!
5. tenyearstogetmymoneyback said...
What a surprise.
Ten years ago I was getting well over £100 a month after tax on £20K from a Portman High Street easy access
account. Nowadays I would get £1.60.
I suspect there is another special interest group called Shaft Our Savers but you have to be invited by the BoE to join.
6. Crunchy said...
Home equity is steadily dwindelling.
Some don't even realise it.
It's a rat trap and ...............
7. alan said...
I pulled a lot of cash and bought gold coins when the prices dipped.
My mates bought new cars from the clunkers scheme. No point keeping it in the BS.
8. sureseam said...
There has been a big discussion on ZeroHedge.com over the last day concerning the level of withdrawals from (401K) pensions in the states. It is a different system than here but the implication seems to be that a proportion of folk are hitting desperate times and cashing in to survive after begging and borrowing from parents and family.
Interestingly more than a few had withdrawn cash from their pensions to put into precious metals but then ZH is full of goldbugs!
9. Crunchy said...
http://www.bbc.co.uk/news/uk-politics-11049538
KARMA?
10. mountain goat said...
I took most of my savings out of banks in 2008, but not because I was strapped for cash. I thought the banks were going under. With the interest rates so low I haven't seen the point of putting anything back. The article doesn't mention if NS&I accounts have decreased as well; some of my savings went there. I would rather "keep cash under my mattress" than keep it in a bank at the moment.
11. tenyearstogetmymoneyback said...
mountain goat A good point.
With one account I blew 50% of my interest in the car park when I went to close it