Bank of England - Rates down to 3%

Oblivion

GeorgeHowell wrote: »

Labour governments always try to spend their way out of trouble and eventually run out of money -- it's in their DNA.

As in Draining National Assets.


Dave.

nilrem_2

Whenever the interest rate is reduced it is hailed by the media as the 'second coming' they never give a moments thought to people who have scrimped and saved all their lives and depend on the interest they receive, these are often Elderly people who depend on a state pension or someone who retires early for one reason or another.

I am getting to think that savers would be more respected if we just lived beyond our means and borrowed more than we could ever afford or depended on the state for handouts!:mad:

Oblivion

nilrem wrote: »

Whenever the interest rate is reduced it is hailed by the media as the 'second coming' they never give a moments thought to people who have scrimped and saved all their lives and depend on the interest they receive, these are often Elderly people who depend on a state pension or someone who retires early for one reason or another.

I am getting to think that savers would be more respected if we just lived beyond our means and borrowed more than we could ever afford or depended on the state for handouts!:mad:

I totally share your frustration nilrem. My entire life's savings are now being compromised to fund the foolish. This is truly Little Britain.

Dave.

ashcarrot

Quick qn are bonds actually covered by the FSCS (or whatever it is) ie your buying debt so if the institution collapses are you still covered as if it was savings?

Rafter

Nilrem/ Oblivion

Totally share your frustration but you have to remember what activity pays the interest on your savings.

It is the borrowing made to people to buy homes, build businesses and in some cases live beyond their means.

Now if rates are kept high, it is now totally clear that more people will get into difficulty, banks will need more handouts and taxes will rise further in the future.

Much better to cut rates, allow people to keep their jobs and keep paying their loans to get the total amount of borrowing down.

Otherwise you simply have thousands of people on benefits which you will have to fund from higher taxes.

It is totally right that savers have been underrewarded in the last 10 years though and as a result borrowing has been very attractive. The country is going to have to learn how to save and live within its means again.

Mr Obama seems to be telling it how it is, telling people they are going to have to adjust, work harder, look after each other.

Don't see our politicians being as bold and brave, although to be honest I can't see people taking Gordon Brown seriously when he has a reputation for spending like it is going out of fashion!

R.

Agent_C

I share some of the frustrations echoed here - I have been careful and prudent with my money and we have managed to clear our mortgage, plus I've amassed savings that have enabled me to go back to University, a dream I've had for 10 years. But now I've got no income other than the interest on my savings, and so this interest cut spells bad news for me. I was hoping to be able to do my studies without having to work as well, but this might not now be possible. I can't even get many of the other perks that most students are entitled to, such as help with prescriptions, dental charges etc, because of my savings. And I have to pay tax on the savings interest as I was working until last month. (Can you hear the violins!).

When I worked as a benefits adviser, the people in the worst situations come retirement were those who had built up a few grand in savings, or who had paid into a small occupational pension. Their income and/or savings took them slightly over the income support threshold, so they missed out on many associated benefits such as health benefits, council tax benefit etc. Those who hadn't bothered to save for their future were actually better off. It frustrates me that the situation is still the same now.

I think the message is: spend spend spend! :rolleyes:

Rafter

ashcarrot wrote: »

Quick qn are bonds actually covered by the FSCS (or whatever it is) ie your buying debt so if the institution collapses are you still covered as if it was savings?

Makes no difference whether it is bonds or a more conventional savings account.

You are not buying bonds in a company here but a ' savings bond' which is simply a term deposit. Ie you agree to leave your money alone for a period of time usually in return for a higher rate of interest.

R.

Oblivion

Agent_C wrote: »

When I worked as a benefits adviser, the people in the worst situations come retirement were those who had built up a few grand in savings, or who had paid into a small occupational pension. Their income and/or savings took them slightly over the income support threshold, so they missed out on many associated benefits such as health benefits, council tax benefit etc. Those who hadn't bothered to save for their future were actually better off. It frustrates me that the situation is still the same now.

I have come across situations like this all too frequently during my working life in local government. It's all very well for the government to keep banging on about a fairer Britain, but a fairer Britain will only come about when those who have acted responsibly are actually rewarded for their sensible actions.

Dave.

aardvaak

alchemistkevin wrote: »

I think this is a good decision. A very good and a very bold decision.

If this can't bring the economy out of recession nothing can.

All of us are holding on our car purchases, house purchases and that's only driving the economy down.

This will get us to spend our money which is the No. 1 priority right now.

Savings will have to go towards the stock market as investments and that will drive growth too.



I'm happy will be happier if my lender decides to follow suit

How on earth can we spend more on goods if we are to get much,much less for our saving/investments

aardvaak

Lokolo wrote: »

You say that but the cut will mean people will ease up and hopefully start borrowing and get money moving around again. If theres more money moving around then business's will start to improve. But obviously this is based on a lot of hopefullys!

But where would the "new" money be coming from - not savings rates?