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moonriver

Bloomberg - "national Savings Says Savers 'flight To Safety' Ends"

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Why? :unsure:

I assume many are either believing things have improved so much, that all the banks problems are over?

Or they trust the government will be able to honour their bank guarantees to their savings, if things get worse?

Or maybe they are believing that with the taxpayer having a bottomless purse, the government will just be able to continue throwing tax money in any troubled banks direction?

http://www.bloomberg.com/apps/news?pid=new...id=alb31S7HuVXM

" July 22 (Bloomberg) -- National Savings & Investments, the U.K. government-owned savings bank, said outflows exceeded new money invested in the first quarter as consumers withdrew savings.

Gross outflows were 4.5 billion pounds compared with 3.2 billion pounds of inflows in the period to June 30, the London- based bank said today in an e-mailed statement. In the year to 31 March, new savings exceeded outflows by 9.9 billion pounds.

“The ‘flight to safety’ is now over and NS&I is operating in a more challenging savings environment,†the bank said in the statement."

Anyone else not feeling this confidence in the banks?

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Maybe people are paying down debt or have lost their jobs and need the cash.

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Or maybe savers no longer trust the government or banks with their money and are choosing to put it under mattress instead.

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Maybe people are paying down debt or have lost their jobs and need the cash.

Yes, could be, and probably is, one of the reasons. Or as IMHAL says, it could be going under the marttress.

But of couse, I guess it does sound better if the reason given in the news, is that it is because it is an end to the "flight to safety" for savers. :rolleyes:

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I never really understood the safety of NS&I. Either the regular banks' deposit protection scheme works up to £50k (via the FSCS backed by the Treasury) or it doesn't. And if it doesn't - ie if the FSCS defaults on that protection - it can only mean that the whole of UK Plc is bankrupt at which point any money in NS&I will be defaulted on too...

Or am I missing something ?

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Why? :unsure:

I assume many are either believing things have improved so much, that all the banks problems are over?

Or they trust the government will be able to honour their bank guarantees to their savings, if things get worse?

Or maybe they are believing that with the taxpayer having a bottomless purse, the government will just be able to continue throwing tax money in any troubled banks direction?

http://www.bloomberg.com/apps/news?pid=new...id=alb31S7HuVXM

Anyone else not feeling this confidence in the banks?

NS&I rates are so utterly rubbish at the moment, it would be amazing if money wasn't gushing out by the billion.

They have recently introduced a slightly better rate, but only on a long-term fix, 3 or 5 years. Given that IRs are bound to rise in the not-too-distant, who on earth wants to fix for that long, when you can get much the same rate for 1 year, or even instant access?

Presumably people are reasoning that as long as they stick to the £50K limit...

I got a one year NS&I fix last Dec at 4.2%, not bad at the time (pulled shortly afterwards) but come maturity I'll almost certainly be shifting it elsewhere.

I'd be particularly interested to know how much money is draining out of Premium Bonds. Maximum holders who were regularly winning a hundred or more a month, are now getting a measly £25 if they're lucky.

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