Wednesday, Dec 16, 2009

Keep spending guys, your country needs you

Daily Telegraph: Middle-class savers told no point in saving

A painful combination of desperately low interest rates and the erosive effects of rising inflation mean almost all higher rate tax payers miss out on a return on their savings once tax is taken into account.

Posted by tudorian @ 01:46 PM (2188 views)
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14 Comments

1. bidin'matime said...

As he says - it's a deliberate policy to stop people saving. In North Korea they are a bit more blunt - simply devalue the currency overnight and wipe out everyone's savings - here it takes a bit longer...

Wednesday, December 16, 2009 01:52PM Report Comment
 

2. jack c said...

When everyone is headed (or being told to head) in one direction it's often a good idea to go in the complete opposite

Wednesday, December 16, 2009 02:35PM Report Comment
 

3. Urbanbear said...

What a sick joke of an article, they still talk about (fixed) saving accounts, as though it was a sensible option, when all bank savings accounts consistently lose value against real inflation.

I only keep a float in my bank account, for unexpected expenses, and put the rest in food, allocated precious metal, and other investments, because I would be an idiot to leave the value, rotting in fiat IOUs, in a bank, rather than preserving value in genuine capital.

Wednesday, December 16, 2009 03:04PM Report Comment
 

4. Carol said...

The point of saving is 1) to have some money in reserve in case of emergency, 2) to have some funds on hand to avoid buying things on credit.

Give me a while and I can think of a few other reasons.

Wednesday, December 16, 2009 03:19PM Report Comment
 

5. Daft As A Brush said...

So will saving in index linked saving certs mostly protect you from rampant inflation?

Wednesday, December 16, 2009 03:36PM Report Comment
 

6. mander said...

Still the economy is not out of the woods yet and hot money problem is still there. I think the world learns now how to protect itself from hot money and the decline will continue.

Wednesday, December 16, 2009 05:56PM Report Comment
 

7. paul said...

This is a fantastic example of how the Bank of England quite clearly has its sums wrong. The interest on savings has been roundly confiscated to pay more money to mortgage holders. Trouble is, savers outnumber debtors by 6 to one! In addition, as Carol says, the whole point of saving is to have a buffer during times of uncertainty or as a source of sole income. So the BoE confiscating those returns is like the parable of the wind trying to blow the coats off passersby.

When do we get the vote of no confidence in our central banker's policy objectives of price stability and low inflation!?

Wednesday, December 16, 2009 06:00PM Report Comment
 

8. crunchy said...

2. jack c said..."When everyone is headed (or being told to head) in one direction it's often a good idea to go in the complete opposite"

It's the village nit that takes the scalps. : )

Wednesday, December 16, 2009 06:13PM Report Comment
 

9. matt_the_hat said...

Many of the older generation have told me about inflation paying off their mortgage - I recently asked a relative where did they find the stupid investor on the other side of the deal - they replied its the savers - this person now holds most of their capital in a bank account - QED

Wednesday, December 16, 2009 07:15PM Report Comment
 

10. smugdog said...

3.75% in the old West Brom, instant access, but sadly now withdrawn a few weeks ago, it's there if you look for it.
Don't moan, be active, adjust to your surroundings, it's not rocket science, honestly.

Wednesday, December 16, 2009 07:17PM Report Comment
 

11. smugdog said...

This site breeds net curtain twitching moaning old gits, you took a gamble

" Ya, I sold it 2006, waiting to benefit from the impending doom, yak a di yak a di yak"

You lost. Get over it and move on.

You seem to be acting for the young, hard done by, but no, you act for yourself, greed, self serving blinker greed, you lost, move on.

Wednesday, December 16, 2009 07:26PM Report Comment
 

12. mr g said...

smugdog @ 10 "it's there if you look for it" and @11 "This site breeds net curtain twitching moaning old gits, you took a gamble"

Spot on, on both counts!

Wednesday, December 16, 2009 07:49PM Report Comment
 

13. quiet guy said...

"You seem to be acting for the young, hard done by, but no, you act for yourself, greed, self serving blinker greed, you lost, move on."

Blimey smugdog! That was rather bitter. As it happens, I didn't 'take a gamble' by selling to rent; instead I was priced out. There are millions like me.

Personally speaking, I suspect that anybody selling to rent in 2006 and being patient will do rather well if they can protect their capital by investment but we won't know until years from now.

Thursday, December 17, 2009 01:22AM Report Comment
 

14. Missed The Boat said...

This was an interesting article on Inflation:

http://www.telegraph.co.uk/finance/comment/edmundconway/6830938/Theres-only-one-escape-from-our-debt-trap.html

Apparently "around four fifths of the state's debt bill is inflation-proof.". Is this true? If it is I see no way out for the UK and its Debts.

Thursday, December 17, 2009 11:27AM Report Comment
 

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