Shafted savers

Lloyd_Barclay

Surely there are enough of us out there who have followed the 'prudent' route and are now seeing our savings savaged, because the government (all parties) are giving our money to the people who have recklessly gone beyond their means, to form a lobby group to get some redress. I've just retired and in the last few weeks I've seen nearly 40 years of 'prudence' vastly devalued through the 'imprudence' of those sucked into the credit approach. I own my house, I have no debt to anyone but my savings are running like sand between my fingers. Justify this Mr. Brown.

Aegis

What sort of "redress" would you like? Are you arguing that you should be compensated for not moving some of your cash into a fixed-term account when the rates were good?

The fact of the matter is that cash savings rates are pretty awful at doing anything other than more or less matching inflation over a given period. Until recently the rates have largely been ahead of inflation, now they're lagging behind. At some point they'll be ahead again. In the end, though, you'll not really see huge amounts of growth from cash.

Lloyd_Barclay

Thanks for your support! It's a matter of timing and my time is now. I've not had the funds to take advantage of good interest rates in the past so I am in the position of having worked towards a point, after working since 1971, where I thought, at the age of 61, I could deservedly live off my lump sum/savings even with son at university, and be OK. Not so, because of the last few weeks. I repeat.... why am I subsidising credit fantasisers?

Aegis

Lloyd_Barclay wrote: »

Thanks for your support!

I should probably clarify. This interest rate cut is something that the independent Monetary Policy Committee has decided on looking at the inflation targets and the market conditions both now and projected into next year and beyond. Their decisions to reduce the interest rate is not a punishment for savers, it's an attempt to shorten the recession and stimulate the markets. As such, I have no idea why you think there's any entitlement to redress of any sort, and I'm trying to work out why you think there should be some.

The news has been filled with talks of rate cuts recently, and if you wanted the best returns on your cash there were 1, 2 and 3 year fixed accounts that could have had the interest diverted to another account. If you're really desperate to know exactly what interest you're going to get for life, there are undated corporate bonds and gilts.

In short, there were many possible ways to protect your savings interest rate, and the news of possible rate cuts has been going on for a while. So why should you be given any sort of compensation for not sorting your own finances out ahead of this news? It's all well and good to blame borrowers, but not all of us are reckless and unable to pay our debts. Many of us are in fact quite responsible with money, and have been servicing our debts even with the base rate increases we saw over the last couple of years before the recent cuts. This just gives us a little reprieve, and an option to fix our rates when LIBOR relaxes a little.

It's a matter of timing and my time is now. I've not had the funds to take advantage of good interest rates in the past so I am in the position of having worked towards a point, after working since 1971, where I thought, at the age of 61, I could deservedly live off my lump sum/savings even with son at university, and be OK. Not so, because of the last few weeks. I repeat.... why am I subsidising credit fantasisers?

Have you seriously gone from no savings less than 6 months ago to a large amount of savings that you're looking to live off now? Do you not have pension arrangements that are supposed to give you an income for life?

All in all, it's hardly the end of the world because as I mentioned before, cash rarely outperforms inflation, so in real terms all these cuts will only have a small and very short term effect while the inflation rate drops. However, if you have a large sum and are worried about maintaining a growing income and appreciating the capital value of your money, why not go and talk to an IFA and ask for a portfolio of funds designed to maintain its value and provide a decent income? That way you'll be happy and won't need to worry when borrowers get a break.