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OnlyMe

More And More Raiding Their Savings

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You can lie about inflation but you cannot ignore its effects.

You can lie about interest rate policy, but those lies will still be outed by reality and basic economics.

As I've said many times before the bottom line is the money left in the consumer's pocket, all round that is getting clobbered and discretionary spending sooner or later is going to get the full downdraft from years of economic mismanagement.

http://news.sky.com/skynews/article/0,,30400-1309904,00.html

More And More Raiding Their Savings

Updated:06:39, Wednesday March 19, 2008

More and more Britons are dipping into their savings to stay afloat.

People are being forced to raid piggy bank

New research shows that the tougher economic climate means Britons are withdrawing around £961 from their savings each quarter.

That's the highest amount since the research began in 2004.

The amount of cash people have set aside to save is falling by an average of £148 a quarter.

Birmingham Midshires, which carried out the research, said the rise in people raiding their savings is consistent wityh rises in the cost of living seen during the past few years.

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It said rising bills had also caused people to cut down on the amount of money they spent on luxuries and leisure activities, with people now spending less on recreation and culture, clothes and shoes, and alcohol and tobacco than in 2004.

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I think I'm more surprised by the fact that people actually have savings. What will the ones without do?

Carry on doing what they were doing before, borrowing - now doubled up - to buy stuff that they can't afford in the first place and increasingly buy stuff that they absolutely have to buy to get themselves to work and to pay the basic bills.

The that think inflation is going to save people's finances really haven't thought about the overall repercussions. Inflation will wreck the whole economy, mind you maybe all some are concerned about is bailing out profligate banks.

Edited by OnlyMe

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Me and the missus have zilch savings. Absolutely nothing. Live one month to the next. However, compared to the vast majority of people we know, we (believe it or not) are actually considered quite good with money. We both work, always pay off the credit card each month and have no loans. If we need to save for a holiday, we can do, quite easily.

What I don't understand about this story is that we are constantly told how much money people OWE. This morning I feel like a leper for not having any savings to raid. Are these 2 very different groups of people, or are some strange people saving whilst maxing out credit cards ????

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Me and the missus have zilch savings. Absolutely nothing. Live one month to the next. However, compared to the vast majority of people we know, we (believe it or not) are actually considered quite good with money. We both work, always pay off the credit card each month and have no loans. If we need to save for a holiday, we can do, quite easily.

What I don't understand about this story is that we are constantly told how much money people OWE. This morning I feel like a leper for not having any savings to raid. Are these 2 very different groups of people, or are some strange people saving whilst maxing out credit cards ????

Debt free and living within your means - it sounds like you're in a good position to me.

Do you have a car, house, shares or furniture? Ok, you may not get back what you paid for those items, but you have SOMETHING to fall back on, if things get tough.

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What I don't understand about this story is that we are constantly told how much money people OWE. This morning I feel like a leper for not having any savings to raid. Are these 2 very different groups of people, or are some strange people saving whilst maxing out credit cards ????

Interesting question.

I suspect probably yes.

And for some reason it's considered normal to save and have a mortgage at the same time (instead of using your savings to pay off the mortgage).

And for some reason, when politicians make pronouncements about a "debt culture" of "instant gratification", they don't consider mortgages to be an example of debt.

A strange world.

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Me and the missus have zilch savings. Absolutely nothing. Live one month to the next. However, compared to the vast majority of people we know, we (believe it or not) are actually considered quite good with money. We both work, always pay off the credit card each month and have no loans. If we need to save for a holiday, we can do, quite easily.

What I don't understand about this story is that we are constantly told how much money people OWE. This morning I feel like a leper for not having any savings to raid. Are these 2 very different groups of people, or are some strange people saving whilst maxing out credit cards ????

Good point - when the credit binge was in full swing, the banks and associated VIs pushed the 'why wait when you can buy now' message constantly (I was getting a loan or credit card offer in the post almost every day at one point).

Now that the banks are broke, will they be doing the same thing with savings, trying to make out it's the cool thing to do that everyone else is doing as well? Eg, you can have more savings than Mrs Jones next door with our new Twatinum Plus account etc etc...

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I'm pretty cheap to run, reasonable pay, but a quick budget sanity check shows that for the first time for a VERY long time, I may actually be spending more than I earn. So savings being depleted at around 200 quid a month. Not a killer, but a real surprise. That's by including estimates for the big items like holidays.

So I have a choice, reduce spending or dip into savings.

I KNOW that many others will be in a far worse situation as most of my friends earn around the same, but have no savings and instead have debts.

Do I think some people have savings and debts at the same time?

Perhaps 1 half of relationship has debts and other savings - but I think people fall into 2 camps with reagard to non-mortgage debt.

1) Fear of being in debt - hate even a hundred quid not paid off on credit card etc

2) Use debt as a constant way to fund.

Not sure many are between.

As for mortgage debt, many even in camp 1 see it as completely different - as a form of investment. I see it as another form of debt.

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I'm always deeply suspicious of overall savings figures containing as they do 'MEW money' put in a savings account which then gets frittered away, generally over a period of three years. Anecdotally came across a strange situation at the weekend, changing my wife's car, she's getting a '55 reg mitsubishi lancer, bought at auction for 4K, could retail it for 5K in a heartbeat. Mate of mine is buying a 13K new Ford on tick, tried to politely suggest that buying new is a mugs game; why don't you buy a 2-3 year old quality used car for 3-4K? "Yeah but who can just put their hands on 3-4K just like that?" came the reply. Kinda symptomatic of how marginally so many live now, they'll happily spend 400 quid a month on a new car that depreciates by 2K the minute they take delivery, but would never consider buying at 2K car :blink:

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I'm always deeply suspicious of overall savings figures containing as they do 'MEW money' put in a savings account which then gets frittered away, generally over a period of three years. Anecdotally came across a strange situation at the weekend, changing my wife's car, she's getting a '55 reg mitsubishi lancer, bought at auction for 4K, could retail it for 5K in a heartbeat. Mate of mine is buying a 13K new Ford on tick, tried to politely suggest that buying new is a mugs game; why don't you buy a 2-3 year old quality used car for 3-4K? "Yeah but who can just put their hands on 3-4K just like that?" came the reply. Kinda symptomatic of how marginally so many live now, they'll happily spend 400 quid a month on a new car that depreciates by 2K the minute they take delivery, but would never consider buying at 2K car :blink:

I was watching some game show or other where a contestant, about 40ish, was risking £4k of winnings. She said 'I don't really want to risk it. I've never had that much money in my account, have you? And her fellow teammate agreed. They weren't chavs or anything, just ordinary people.

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Me and the missus have zilch savings. Absolutely nothing. Live one month to the next. However, compared to the vast majority of people we know, we (believe it or not) are actually considered quite good with money. We both work, always pay off the credit card each month and have no loans. If we need to save for a holiday, we can do, quite easily.

What I don't understand about this story is that we are constantly told how much money people OWE. This morning I feel like a leper for not having any savings to raid. Are these 2 very different groups of people, or are some strange people saving whilst maxing out credit cards ????

It's called the "Win Win" world!! :lol::P

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I'm always deeply suspicious of overall savings figures containing as they do 'MEW money' put in a savings account which then gets frittered away, generally over a period of three years. Anecdotally came across a strange situation at the weekend, changing my wife's car, she's getting a '55 reg mitsubishi lancer, bought at auction for 4K, could retail it for 5K in a heartbeat. Mate of mine is buying a 13K new Ford on tick, tried to politely suggest that buying new is a mugs game; why don't you buy a 2-3 year old quality used car for 3-4K? "Yeah but who can just put their hands on 3-4K just like that?" came the reply. Kinda symptomatic of how marginally so many live now, they'll happily spend 400 quid a month on a new car that depreciates by 2K the minute they take delivery, but would never consider buying at 2K car :blink:

Ah, but without people like your mate where would the supply of second hand cars at 3-4K be?

I say don't discourage them. I've got my 4K waiting for when I've put another 10,000 miles on the Pug I'm driving at the mo.

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I was watching some game show or other where a contestant, about 40ish, was risking £4k of winnings. She said 'I don't really want to risk it. I've never had that much money in my account, have you? And her fellow teammate agreed. They weren't chavs or anything, just ordinary people.

It doesn't surprise me, after I read this article.

http://www.dailymail.co.uk/pages/live/arti...in_page_id=1770

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If this research is essentially true (and points taken about the VIs wanting to encourage saving at the moment), it's more bad news for anyone trying to borrow, because a net outflow of retail deposits from the banks will exacerbate their cash flow problems.

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  • 293 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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