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Rebuilding Savings?

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The difficulties facing building societies were highlighted today with figures released showing they suffered the biggest monthly outflow of savings for 54 years in June — and warnings of continued withdrawals as unemployment forces savers to dip into their nest eggs.

The unprecedented £2.3bn withdrawn from the sector — the largest monthly fall since data was first collected in 1955 — could have implications for the mortgage market, where lending is increasingly being dominated by the banks.

Building societies tend to be more reliant on savers to support their mortgage lending than banks.

The sudden reversal of fortunes for building societies — which enjoyed a boom in savings after the collapse of Northern Rock two years ago — came as the Office of Fair Trading appeared to suggest it should be easier to set up banks to bolster competition.

http://www.guardian.co.uk/business/2009/ju...ings-withdrawal

Edit: c.f., http://news.bbc.co.uk/1/hi/business/8162950.stm

PS. I apologise for the corruption in the cut and paste. I'm using Chrome in WinXP, anyone know how I can fix this?

I'll let wiser heads than mine pick through the implications of this, which I suspect are myriad.

Edited by Cogs

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http://www.guardian.co.uk/business/2009/ju...ings-withdrawal

I'll let wiser heads than mine pick through the implications of this, which I suspect are myriad.

It is very likely the savvy "smug ones" who bought a house (made offers) in the Feb/March this year are likely to have used building societies knowing the risks of banks and probably completed in June on mass. I know people in this position.

Edited by Confounded

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http://www.guardian.co.uk/business/2009/ju...ings-withdrawal

I'll let wiser heads than mine pick through the implications of this, which I suspect are myriad.

but don't the BS's have record levels of reserves at the BoE according to a recent thread ? Possible indicator that queasing has provided the liquidity but that they are sitting on it. a la japan. I am genuinely confused.

who needs savers ? :blink:

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Just a thought...maybe it is not such a bad idea to spend some savings before they devalue further, say on an energy saving products, education, new business....will the future be pay as you go? ;)

It would be a nice idea but I suspect it is going to pay for "assets" that are devaluing faster.

The 250k newbuild flat and the Audi.

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I closed my Nationwide ISA just lat week, the interest rates were pathetic.

I have a NW ISA :( Where did you put your funds?

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I'm not surprised there's been an outflow from building societies, they're taking the p!ss. Nationwide pay 0.25% on their ISA, cheeky gits.

OTOH a colleague of mine found out about a 5% fix with (I think) Yorkshire BS the other day, charged along to grab it (no online facility) only to find that it was already 'full'.

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How many are using savings to live? How many of these people have lost jobs and are now living off savings?

To be honest we need more info as to where the money has gone.

Being spent on living expenses.

Reinvested elsewhere.

Buying a house.

??????????

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How many are using savings to live? How many of these people have lost jobs and are now living off savings?

To be honest we need more info as to where the money has gone.

Being spent on living expenses.

Reinvested elsewhere.

Buying a house.

??????????

Blown on parties and drugs, if they've got any sense :lol::lol::lol:

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I closed my Nationwide ISA just lat week, the interest rates were pathetic.

I was in the other day and told the guy at the service desk about how poor the rate I was getting on my ISA thingy was. He then turned round to tell me how I could get a great rate on their fixed rate 'x' year ISA bonds. I told him that was stupid as I thought rates would be alot higher than their pathetic rate within 6 months - he didnt disagree.

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Blown on parties and drugs, if they've got any sense :lol::lol::lol:

Or, people with substantial savings and low/no mortgage are taking extra cash out and hiding it?

Lose job, 16K savings known to the state, £30K hidden here and there. Mortgage cleared.

Claim JSA/Council Tax Relief etc.

Dip into secret savings to make life comfortable and take advantage of 'cash opportunities' down the car boot, pub etc.

Relax.

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Or, people with substantial savings and low/no mortgage are taking extra cash out and hiding it?

Lose job, 16K savings known to the state, £30K hidden here and there. Mortgage cleared.

Claim JSA/Council Tax Relief etc.

Dip into secret savings to make life comfortable and take advantage of 'cash opportunities' down the car boot, pub etc.

Relax.

Nice strategy ;)

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I was in the other day and told the guy at the service desk about how poor the rate I was getting on my ISA thingy was. He then turned round to tell me how I could get a great rate on their fixed rate 'x' year ISA bonds. I told him that was stupid as I thought rates would be alot higher than their pathetic rate within 6 months - he didnt disagree.

Nationwide is just one of many on this. Heard a prog. the other day (Moneybox?) where they were discussing this and slating the orgs. in q. for destroying the whole point of ISAs. As they said, even after basic rate tax it was often easier to get a better return with any number of 'ordinary' savings a/cs, even instant access.

My daughter was recently home on a flying visit from Ethiopia. Where she works internet access is so slow and often cut off altogether (not to mention the elec. and water) it's very hard for her to manage her savings. I've been on at her for ages to do it - finally managed to get her to shift from an account that's withered to 0.4% over the past year to a 2.5% with the same BS - took about 5 minutes to set up. Still not exactly great, but until she's home for a bit longer it'll have to do.

Can't help wondering how many others have failed to shift from these pathetic accounts, though. You have to trawl though the website to find out what rates the umpteen old a/cs are paying - and there are so many of them, often with very similar names.

I know Martin Lewis started a petition to make banks/BSs give this info upfront when you view an a/c - doubt it'll get anywhere, though.

Inertia is the banks/BSs' best friend. :(

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Or, people with substantial savings and low/no mortgage are taking extra cash out and hiding it?

Lose job, 16K savings known to the state, £30K hidden here and there. Mortgage cleared.

Claim JSA/Council Tax Relief etc.

Dip into secret savings to make life comfortable and take advantage of 'cash opportunities' down the car boot, pub etc.

Relax.

You are me. Allegedly. <_<

Don't forget the children can have £3 savings which they (DSS) can't touch.

Sales of home safes are booming.

Edited by youthoftoday

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It is very likely the savvy "smug ones" who bought a house (made offers) in the Feb/March this year are likely to have used building societies knowing the risks of banks and probably completed in June on mass. I know people in this position.

this is what I also think is happening BUT also that due to very low volumes, figures are being skewed, hence giving incorrect hpi.

plus they are ALL a lying bunch of tw4ts anyway & fudge every figure they need to. :)

Welcome to Great Depression 2. I also agree with your comment about this being one of the most vicious in history, when all said & done. :ph34r:

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Or, people with substantial savings and low/no mortgage are taking extra cash out and hiding it?

Lose job, 16K savings known to the state, £30K hidden here and there. Mortgage cleared.

Claim JSA/Council Tax Relief etc.

Dip into secret savings to make life comfortable and take advantage of 'cash opportunities' down the car boot, pub etc.

Relax.

Just out of interest, how would one go about keeping savings that he wouldn't want the government to have visibility of?

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My ISA savings also were moved from Nationwide because of their interest rates. As were Mrs. Sod's.

That's at least four of us on this thread so far - I'm guessing that mirrors the wider populace on this matter.

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Just out of interest, how would one go about keeping savings that he wouldn't want the government to have visibility of?

Oh hell - Gold Bugs please don't hijack....

Starter list:

Cash in safe and other safe places.

Silver and Gold coins (wise component of investment anyway)

Silver bars

Collectible such as cameras, watches IF you know your stuff

Load up Gas and Electric for the next 3 years (you can ask for it back if you move).

Prepay other bills.

Kids accounts. 'Give' (lend) 3K each to trusted relatives who are not on means tested benefits themselves.

Holiday paid in full when booked, not waiting for due date.

Get ahead with car and house maintenance that will have to be done anyway.

Document all spending that you want the authorities to see as evidence of cash gone.

Avoid any audit trail of hidden wealth, e.g. get a friend or relative to buy coins then buy them off them cash in hand.

Please feel free to add to the list.

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I would imagine that a large amount of savings has gone towards paying down mortgages. Anyone remember the figure for mortgage overpayments in the 1st quarter of '09?

Barclays still offer about 2.5% on their ISA and Yorkshire BS have an internet instant access savings account offering somewhere around 2%.

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all ISA's are unsafe imo.

following the same logic, all bank accounts are unsafe - ISA is a tax shelter, nothing more.

The disparity between mortgage and savings rates has lead me to secure a better return by paying down the mortgage. I don't think I am the only one doing this !

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I'm not surprised there's been an outflow from building societies, they're taking the p!ss. Nationwide pay 0.25% on their ISA, cheeky gits.

Feckers are taking the pish

I have just given them notice and am pulling out £20K in 60 days time which I shall use to pay a lump sum off my mortgage (approx 1/3rd)

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