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"savings Raided To Cover Spending"

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BBC Article

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.

..

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.

..

The amount of money banking customers have been depositing overall has been steadily increasing over the past two years.

But in the last three months there has been a marked slowdown in the growth of personal deposits in both savings and current accounts, according to the British Bankers' Association.

..

"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.

Yes - when there's a crisis caused by people, organisations and states taking on too much debt, the thing to do is to incentivise people to save even less in order to postpone the economic adjustments which must surely come in response to the crisis. :rolleyes:

You really couldn't make this stuff up.

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BBC Article

Yes - when there's a crisis caused by people, organisations and states taking on too much debt, the thing to do is to incentivise people to save even less in order to postpone the economic adjustments which must surely come in response to the crisis. :rolleyes:

You really couldn't make this stuff up.

You beat me to it... Sky news is also reporting the same news:

http://news.sky.com/skynews/Home/Business/Recession-May-Be-Over-But-Many-Brits-Are-Spending-Billions-Of-Their-Savings-Just-To-Live/Article/201008315701144?

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So the PR person says that when the time comes to buy a property all her savings will have been used up. No problem, just borrow the deposite.

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Very confused about what this article is saying

I'm sure I've read several times that people are saving more

and the BBA figures show personal deposits are 5.5% higher than last year

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Making savings rates rubbish does encourage spending.

The withdrawal of NSI and index-linked was the major factor in my buying a new car as that was the last decent investment.

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There is a fine balance between saving and spending....it all depends on what you are saving for, how old you are, how much debt you have.....savings are to be spent if you need the money, other than that you split into three, short term, medium term and long term.....putting it in places where it has the least chance of losing value from any inflation.

Saving for a deposit is short to medium term so as prices fall your money is keeping pace.

Edit:oo

Edited by winkie

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Very confused about what this article is saying

I'm sure I've read several times that people are saving more

Those that can save are saving more than ever, those that can't are using up their savings more than ever.

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Making savings rates rubbish does encourage spending.

The withdrawal of NSI and index-linked was the major factor in my buying a new car as that was the last decent investment.

I just did exactly the same! a wad which was due for transfer to NS&I went to buy a new car as I could not see any worthwhile saving account.

Some method in the madness as the old motor was costing £200 a year in tax and at 10 years old was getting expensive to repair coughed up £750 in the past year.

So the Skoda I purchased is allegidly VAT free price with 3 years warranty and should save me 10-15% on fuel costs.

Am I mad? ....absolutly!

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I just did exactly the same! a wad which was due for transfer to NS&I went to buy a new car as I could not see any worthwhile saving account.

Some method in the madness as the old motor was costing £200 a year in tax and at 10 years old was getting expensive to repair coughed up £750 in the past year.

So the Skoda I purchased is allegidly VAT free price with 3 years warranty and should save me 10-15% on fuel costs.

Am I mad? ....absolutly!

I wonder if there was a spike of purchases in July and August!

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Making savings rates rubbish does encourage spending.

The withdrawal of NSI and index-linked was the major factor in my buying a new car as that was the last decent investment.

In the short term yes, but once everyone with any savings left has been forced to lock them up in a 5 year term account, what do you think that will do to spending levels?

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Making savings rates rubbish does encourage spending.

The withdrawal of NSI and index-linked was the major factor in my buying a new car as that was the last decent investment.

Cars are NEVER investments...

fun, useful, desirable, necessary etc... but not ever investments (unless you plan to buy and store a rare sports car).

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Making savings rates rubbish does encourage spending.

Only to a point. After that more drastic and opposite effects can quickly swing in.

If you are reliant on savings income for expendiure - you're ******ed under current conditions - we're looking at near double digit increases in bog standard items and near zero interst rates - the ability to prolong this situaton is measured in 10's months not 10's years.

Those spooked/coerced into spending their savings will prbably have done so already, for example your car purchase - will you be buying another one soon? Part of what the "bounce" was all about and for the housing market in particular initially fed by lots of cash house purchases when there was very little mortgage credit available.

For the rest, well maybe longer term plans are be laid now - what to save, where to save it, which currency to save in, which country to invest in, paying down debt, reduce outgoings to a minimum and hunker down, reduce tax and liabilities to a minimum.

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The Ferrari GTO models are.

Have you seen how much they cost to maintain, parts aren't exactly cheap. I think the F40 requires fuel tank bag changes every few years, last I heard they were £20k to change.. and that's before you've turned a wheel.

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Cars are NEVER investments...

fun, useful, desirable, necessary etc... but not ever investments (unless you plan to buy and store a rare sports car).

No, I meant NSI ILs were the last decent invetsments. A new car is a pleasant way to burn money.

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The lower the return on savings the less I spend to redress the poor return. If interest rates were to go up then there's room to do some spending.

Where there's evidence of cheaper goods i.e. deflation I think "ah I can afford to buy that now and why wait as it might not get any cheaper" so go ahead and buy.

Oh well :rolleyes:

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  • 145 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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