Interest Rates

FairyElephant_2

sarah_elton wrote: »

No - at the moment saving is the last thing they want you to do.

.....but I am not going to suddenly start spending my savings that I worked so hard to build up - I'm more likely to tie them up in longer term accounts to get fixed rates, which are a bit higher than the varibale ones at the mo' - so surely this doesn't make sense?

I know it a simplistic way of looking at it - but I thought that part of the current problem was that banks didn't want to lend to each other, so surely they would want as much of our savings as possible, so they can lend it on? If less people save, then where are the banks going to get the funds from to lend to people as mortgages, and how then does this help the housing market??

tara747

FairyElephant wrote: »

.....but I am not going to suddenly start spending my savings that I worked so hard to build up - I'm more likely to tie them up in longer term accounts to get fixed rates, which are a bit higher than the varibale ones at the mo' - so surely this doesn't make sense?

I know it a simplistic way of looking at it - but I thought that part of the current problem was that banks didn't want to lend to each other, so surely they would want as much of our savings as possible, so they can lend it on? If less people save, then where are the banks going to get the funds from to lend to people as mortgages, and how then does this help the housing market??

Same here. This is only going to make me spend even less too, to compensate for the lower IR on my savings. So if enough savers do it, it may backfire spectacularly!!!

The cuts won't even be passed on to borrowers. What a joke.

I am really angry. Bye bye UK economy and sterling. :mad:

aardvaak

MORPH3US wrote: »

Hope you don't mind me asking...

Is that through choice or because you cannot work / have retired?

Nothing to do with the thread really, I can just never imagine being able to live off my savings interest rather than work so I assume there is a reason you don't work.

I have built up my savings thoughout my life when others were spend,spend,spend so that now I don't need to work because of what I have saved - and before you say well dip into my capital - I can't as that would give even less interest.
Also nobody would want me.

cheerfulcat

Hi there,

aardvaak wrote: »

My only form of income is from tracker savings a every cut counts to me

If I may say so, this really highlights one of the risks of keeping all of your capital in one asset class. Cash is often considered risk-free but it isn't - the risks are just different ones to those faced by equity holders.

This might be a good time to diversify a little more - a corporate bond fund could offer higher interest and a possible capital gain on top eventually. An equity income fund would offer similar rates to cash ( possibly higher ) and stand a far better chance of keeping up with inflation.

As an aside - why on Earth choose trackers? Why not fix when the interest rates were relatively high?

aardvaak

cheerfulcat wrote: »

As an aside - why on Earth choose trackers? Why not fix when the interest rates were relatively high?

Because I need a monthly income

isofa

cheerfulcat wrote: »

As an aside - why on Earth choose trackers? Why not fix when the interest rates were relatively high?

Discussed on page 1...

fullstop

What are the odds that the interest rates on credit cards will drop ?

isofa

fullstop wrote: »

What are the odds that the interest rates on credit cards will drop ?

Zero, if I was a betting person!

LongTermLurker

Barclays RS for me tomorrow - if they don't close it before half 9

cheerfulcat

isofa wrote: »

Discussed on page 1...

Ah yes, so it was - sorry.

ETA - Aardvaak, you might like to have a look at the Motley Fool's Investing for Income board. There is one thread in particular which may be of interest - LINK - but the whole board is worth reading.