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dryrot

Europeans Face Savings 'meltdown' That Could Threaten Eu

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Hi

Nowt will be done, tho. At least its mentioned.

Europeans face a “meltdown” in the value of their savings that could threaten both the euro and the EU.

http://www.telegraph.co.uk/finance/personalfinance/savings/10577646/Europeans-face-savings-meltdown-that-could-threaten-EU.html

A report by the European parliament’s budgetary control committee warns: “As a consequence of the macro-economic assistance programmes and ECB lending operations, EU citizens face a meltdown of their life savings with interest rates being lower than 1pc … around the current inflation rate.

“This situation could potentially put the acceptance of the euro currency and the EU as a whole at risk."

Official figures put the euro area’s annual inflation rate at 0.8pc for December. This is well above the eurozone’s benchmark interest rate, which was set again at the record low of 0.25pc last week.

Paul Nuttall MEP, the deputy leader of Ukip, said that the European Central Bank was effectively robbing people of the value of their savings in the name of eurozone dogma.

“In a rare bout of honesty and realism the committee has admitted that the ECB is silently stealing savers’ money,” he said.

Jens Weidmann, a member of the ECB’s governing council and the head of Germany’s Bundesbank, defended the low interest rate policy but also warned of the risks of keeping rates low for too long.

“An ultra-loose monetary policy is a therapy with risks and side-effects. It cannot become a permanent therapy, especially as the positive effects are reduced over time, while the risks increase,” he said.

Last year, Mr Weidmann admitted that he understood growing concerns in Germany about “creeping expropriation” of savings, as assets saved for pensions have declined by 15pc or more for some savers.

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http://www.zopa.com/

Currently getting 5.1%

https://www.fundingcircle.com/homepage

currently getting 5.3%

http://www.nsandi.com/savings-premium-bonds

Currently getting about 1.5% tax free.

http://www.nsandi.com/savings-childrens-bonds

Currently getting 2.5% tax free.

Melt down for the stupid me thinks.

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I have a lot of Euros with no interest, they are used of offset my account transaction charges that would otherwise be €38 per quater on each account.

I think Euros under the mattress is safer than in the banks, and safer than gambling on GBP and the current UK credit expansion lasting.

Ho-hum. My cash would be much better used to offset my rent by buying, but we are not in a position to buy a house at the moment and there is nothing in the UK worth buying at prices being demanded.

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As if the low rates weren't bad enough, Ireland swipes 45% of interest income from savers. This must surely give other countries ideas if ever interest rates go back up.

The interest you receive is subject to a tax called Deposit Interest Retention Tax (DIRT).

From 1 January 2014, DIRT is charged at 41% (was 33% in 2013, 30% in 2012 and 27% in 2011) for payments made annually or more frequently. The tax is deducted by the bank or other deposit-taker before the interest is paid to you.

http://www.citizensinformation.ie/en/money_and_tax/tax/tax_on_savings_and_investments/deposit_interest_retention_tax.html

In 2014 unearned income for everyone else will become liable for PRSI. Unearned income from rents, investments, dividends and interest on deposits and savings will be liable to PRSI at 4% from 1 January 2014

http://www.citizensinformation.ie/en/social_welfare/irish_social_welfare_system/social_insurance_prsi/social_insurance_in_ireland.html

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I have a lot of Euros with no interest, they are used of offset my account transaction charges that would otherwise be €38 per quater on each account.

I think Euros under the mattress is safer than in the banks, and safer than gambling on GBP and the current UK credit expansion lasting.

Ho-hum. My cash would be much better used to offset my rent by buying, but we are not in a position to buy a house at the moment and there is nothing in the UK worth buying at prices being demanded.

If this is right then you are just about keeping pace with inflation under the mattress. Obviously you are better off earning 1% on zero inflation as opposed to earning 4% on 5% CPI. But savers never see it like that.

http://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexdecember2013/#.UtkTCtRFDGI

Edited by crashmonitor

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One thing for certain hardly anyone with savings never mind just pensioners will ever vote for the main players ever again after this theft, even if they throw in a small increase to try win votes then reverse it again after the election the damage is well and truly done . Roll on the election and pay back time :D

Edited by papag

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1.3% actually :(

NS and I index linked certs currently doing OK though for the last 12 rolling months........

My three tranches originally invested back in 2009 and 2011 are at 3.7%, 3.2% and 2.95% tax free (with RPI + 0.25% to 1%) Beating inflation by between 47.5% and 85% on the CPI measure.

2.0% target is still beatable with a range of fixed rate bonds and retained NS and I certs etc. Maybe not much good if you are chasing house prices in London these last couple of years though.

Edited by crashmonitor

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NS&I? Isn't that state run? Adding to the public debt mountain are we? Hope you're proud of yourself.

Yeah, give you money to the spivs in the banks or the spivs in the state...take your pick :P

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Their 'savings' were effectively wiped out when they lent them to the PIIGS.

It's just accounting for those losses that they're too scared to face up to.

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The system is:

Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->Devaluation->Property Boom->etc.

I see no laws have changed to change this system, so why will it not continue happening?

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Does the article also criticise the Bank of England for adopting identical policies to the ECB and keeping rates at 0.5% for the last five years?

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NS&I? Isn't that state run? Adding to the public debt mountain are we? Hope you're proud of yourself.

I have some NS&I too. Pebble on the public debt mountain. Besides, personally I'd rather support government spending than mortgage lending.

Q

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Hi

Nowt will be done, tho. At least its mentioned.

Europeans face a “meltdown” in the value of their savings that could threaten both the euro and the EU.

http://www.telegraph.co.uk/finance/personalfinance/savings/10577646/Europeans-face-savings-meltdown-that-could-threaten-EU.html

A report by the European parliament’s budgetary control committee warns: “As a consequence of the macro-economic assistance programmes and ECB lending operations, EU citizens face a meltdown of their life savings with interest rates being lower than 1pc … around the current inflation rate.

“This situation could potentially put the acceptance of the euro currency and the EU as a whole at risk."

Official figures put the euro area’s annual inflation rate at 0.8pc for December. This is well above the eurozone’s benchmark interest rate, which was set again at the record low of 0.25pc last week.

Paul Nuttall MEP, the deputy leader of Ukip, said that the European Central Bank was effectively robbing people of the value of their savings in the name of eurozone dogma.

“In a rare bout of honesty and realism the committee has admitted that the ECB is silently stealing savers’ money,” he said.

Jens Weidmann, a member of the ECB’s governing council and the head of Germany’s Bundesbank, defended the low interest rate policy but also warned of the risks of keeping rates low for too long.

“An ultra-loose monetary policy is a therapy with risks and side-effects. It cannot become a permanent therapy, especially as the positive effects are reduced over time, while the risks increase,” he said.

Last year, Mr Weidmann admitted that he understood growing concerns in Germany about “creeping expropriation” of savings, as assets saved for pensions have declined by 15pc or more for some savers.

what the feck is "macro-economic assistance?"

call a spade a f***ing spade for once.

lets call it "incessant meddling and micromanagement of the general public"(not to mention the me priest..you serf ..shut up and do as you're told" mentality of those holding public office)

nothing much changes in europe does it?

a few hundred years ago you used to have the spanish inquisition come round for daring to suggest the world might not be flat.

.....same thing now with global warming( except it isn't so lets call it climate change.......whatever happened to acid rain?....and cfc's in the ozone layer...which ain't it's to do with geo-magnetics but of course you can't dare tell them that the world ain't flat).

you might just be demonised as one of them there vagrants and heretics.

ostracised and not part of the "gang" any more.

boo hoo.

we're starting a new gang anyway...excommunication just don't hold the threat it used to.

Edited by oracle

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It gets better- the bankers are now making noises to the effect that they will start to charge for current accounts- so not only will you get derisory rates of interest- you will pay the bankers for the right to lend them your money in the first place.

The bankers have carefully suppressed the fact that by depositing money with them you are lending them money- you become a creditor of the bank. But once the bail in's start to roll they will cheerfully pull this rabbit out the hat as they inform you that the money is gone- poof! Annnnnnnnnnnnnnd-it's GONE! :lol: ( For south park fans).

Anyone noticed lately how the insides of bank branches are plastered with those notices about the The FSCS savings protection limit of £85,000? Time was when this limit was much lower-and never mentioned. Then these cute posters began to appear with smiling model customers being happy about how protected their savings were. At first the posters were placed in obscure corners or in odd windows- but now they have migrated to the cashiers desks- just to make sure everyone knows just how safe they really are.

My theory is that the larger the FSCS notices are and the closer they are to the cashiers desks the closer we are to bank bail in time- and the ones in nationwide have now grown from a modest A5 to an eyecatching A3 :ph34r:

After all- if you were a government who suspected it may have to start dipping into people's private savings to save bankers you too might want to take some pre-emptive action- at the very least you might want to be able to say -'well- we did warn you- anything above that 85 grand limit is up for grabs.'

True the posters don't actually use the phrase 'up for grabs'- that might be a little indelicate- but the point is being made- and with increasing urgency in my view.

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It gets better- the bankers are now making noises to the effect that they will start to charge for current accounts- so not only will you get derisory rates of interest- you will pay the bankers for the right to lend them your money in the first place.

The bankers have carefully suppressed the fact that by depositing money with them you are lending them money- you become a creditor of the bank. But once the bail in's start to roll they will cheerfully pull this rabbit out the hat as they inform you that the money is gone- poof! Annnnnnnnnnnnnnd-it's GONE! :lol: ( For south park fans).

Anyone noticed lately how the insides of bank branches are plastered with those notices about the The FSCS savings protection limit of £85,000? Time was when this limit was much lower-and never mentioned. Then these cute posters began to appear with smiling model customers being happy about how protected their savings were. At first the posters were placed in obscure corners or in odd windows- but now they have migrated to the cashiers desks- just to make sure everyone knows just how safe they really are.

My theory is that the larger the FSCS notices are and the closer they are to the cashiers desks the closer we are to bank bail in time- and the ones in nationwide have now grown from a modest A5 to an eyecatching A3 :ph34r:

After all- if you were a government who suspected it may have to start dipping into people's private savings to save bankers you too might want to take some pre-emptive action- at the very least you might want to be able to say -'well- we did warn you- anything above that 85 grand limit is up for grabs.'

True the posters don't actually use the phrase 'up for grabs'- that might be a little indelicate- but the point is being made- and with increasing urgency in my view.

What % of people have more than 85k in the bank though?

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I have some NS&I too. Pebble on the public debt mountain. Besides, personally I'd rather support government spending than mortgage lending.

Q

Better than saving/hording private debt where your poor debt slaves can't change the terms of the game.

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I have some NS&I too. Pebble on the public debt mountain. Besides, personally I'd rather support government spending than mortgage lending.

Q

If you are a 40% tax payer, NS&I index-linked certs have been the greatest cash investment of the last 5 years. I have had RPI+1.35% tax free. This has been near the equivalent of 7% interest at times, govt. guaranteed.

The new ones only pay RPI + 0.05%, but that is better than most savings accounts.

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If you are a 40% tax payer, NS&I index-linked certs have been the greatest cash investment of the last 5 years. I have had RPI+1.35% tax free. This has been near the equivalent of 7% interest at times, govt. guaranteed.

The new ones only pay RPI + 0.05%, but that is better than most savings accounts.

They are no longer on sale for new customers. ;)

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What % of people have more than 85k in the bank though?

Good question- I certainly don't-But if we include business accounts perhaps quite a few- but even most STR's (if they still exist) would hopefully have split their money over different banks.

On the other hand the fact that EU wide (not just Euro zone wide) bail in legislation has been put in place is not just down to bored MEP's passing the time- so they must believe that they will be able to raise some fairly substantial sums from somewhere- and given that the banks are bust and the Governments are bust the list of doners is not looking that long. The IMF are suggesting a 'one off' wealth tax of 10% of savings- but how this might apply to those with less than 85k is not clear.

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The IMF are suggesting a 'one off' wealth tax of 10% of savings- but how this might apply to those with less than 85k is not clear.

I think that proposal is really aimed at assets.

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They are no longer on sale for new customers. ;)

Unfortunate. They offered me a rollover at +0.05% but I turned it down because I am having the loft done and needed to raid the rainy day fund.

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