Gordon acts against savers again........

MrLlama

Last time I checked it wasn't Gordon Brown or any government official who set interest rates, its the bank of England. They set interest rates independent of what the government wants and based on what the overall economy needs!

The interest rate change isn't targetted at punishing savers, the reason is to try and boost the economy so people will increase spending and therefore boost the economy. Its selfish to want interest rates increased just so you can get some more interest on your savings and not care that it will prolong the country's recession.

apt

Undoubtedly PEPs were more generous than stocks and shares ISAs, but with TESSAs £9,000 was the limit apart from interest. If saving the maximum you could only add £600 in the fifth year and then nothing. Even taking inflation into account that's much less generous than Cash ISAs.

GooeyBlob

apt wrote: »

Undoubtedly PEPs were more generous than stocks and shares ISAs, but with TESSAs £9,000 was the limit apart from interest. If saving the maximum you could only add £600 in the fifth year and then nothing. Even taking inflation into account that's much less generous than Cash ISAs.

If Brown had merely abolished TESSAs and replaced them with ISAs, you would be absolutely correct. However, he abolished both TESSAs and PEPs. ISAs were the replacement for both schemes. There was also no upper limit on the amount held in PEPs, and with annual limits being higher than those for ISAs these were far more generous than ISAs. Add TESSAs on top, and you see why the man who raided our pensions also raided our tax-free savings.


@MrLlama:


Having taken an excellent decision to give the BoE its independence, Gordon interfered with the Monetary Policy Committee's decisions by replacing their inflation target, RPI, with CPI. RPI includes house price inflation, and generally tends to be quite a bit higher (although not for the past couple of months). It was a move designed to keep BoE rates lower than they might otherwise have been, and has been widely criticised since. Indeed, many economists point to this as one of the main reasons why debt spiralled out of control in the UK. Within a few years we were seeing insolvencies exceeding 100,000 per year, the highest figures ever recorded, long before the "credit crunch" became big news. In reality, the warning signs were there long before Northern Rock, the US banks, et al.

RayWolfe

GooeyBlob wrote: »

and you see why the man who raided our pensions

So you understand all the implications of the dividend credit tax change that Mr Lamont started and this government completed, and its effect upon Advanced Corporation Tax. Or are you just following a wrong, but admitedly populist, line?

ray123

Pssst wrote: »

Thats not how it will work for me. I have no mortgage, I have pots of savings and the way it will work for me is that I'll keep switching to get the best saving/investment deals and if lending rates keep dropping,i'll borrow loads of money and buy stuff that i need,go on holiday or whatever.

I am sorry, but you are missing out on the fundamentals of the British mentality...
Put the savings in someone else's name (as you are sensible enough to have savings), take out a couple of unsecured loans, max out your credit cards and overdraft, live the high life and then declare yourself bankrupt... Problem solved (well not really, but why should you care...)
A very wise man said that the only way to beat the system is to live your life and then die in debt.... his name is Mick!

23rdian

Last time I checked it wasn't Gordon Brown or any government official who set interest rates, its the bank of England. They set interest rates independent of what the government wants and based on what the overall economy needs!

One word.

Naive.

Aegis

23rdian wrote: »

One word.

Naive.

A few months ago the MPC wrote a letter to Gordon Brown essentially telling him where he could shove his request that they do what he says. The MPC is independent of the government, and the minutes of each decision meeting are made available online for anyone who wants to read and find out why the rates were changed or left alone. Every now and then I have a read through, and it's quite clear that a lot of information goes into these meetings and that there is a lot of discussion on some extremely key issues.

They are independent, and they are looking at the best thing they can do for the economy in the medium to long term, and skepticism alone won't change that fact.

ManAtHome

Aegis wrote: »

They are independent, and they are looking at the best thing they can do for the economy in the medium to long term, and skepticism alone won't change that fact.

I'd like to believe that, but how many times in the last 3 or 4 years have they been "relaxed about increasing debt as this is a managable proportion of assets (mainly property)" - may have paraphrased a bit there, but pretty close to the sentiments of their meetings.

ed123_2

.....Following these cuts there will be a some stage be a massive increase in inflation which is the usual answer to govt./private debt. This again will hit us "greedly/selfish" savers. Without the savers there would be no money to lend out in the first place. Banks/building soc.'s cost of money is not base rate but money market interbank rates ( 3 month libor is 3.39% today). The real problem is not interest rates but the failure of the banking system ie banks no longer lend to each other (due to the fear of toxic debt hidden within their balance sheets). It also seems to me the BOE have been leaned on to cut rates and can no longer be regarded as independent....

Aegis

ManAtHome wrote: »

I'd like to believe that, but how many times in the last 3 or 4 years have they been "relaxed about increasing debt as this is a managable proportion of assets (mainly property)" - may have paraphrased a bit there, but pretty close to the sentiments of their meetings.

Sounds like they (like most others in the industry and outside, for that matter) didn't realise the shear size of the problem that arose because of adverse credit. I wouldn't say this means they were working against the economy, they just didn't appreciate quite how big an effect this would have. I'd say they're in fairly good company as far as that goes.