Cameron makes savings tax pledge

PasturesNew

nickmason wrote: »

1)
2) there are many people who don't understand tax, and don't use their ISA allowance. Self-evidently, they are the ones that should be encouraged to save.

They also don't understand ISAs.

PasturesNew

!!!!!!? wrote: »

Anyone on an average income should have been able to accumulate something for a rainy day during the unprecedented prosperity of much of the last decade.

But (semantics of average/median etc excepted) by its very nature, half the people won't be earning average.

!!!!!!? wrote: »

Seems to me that a lot of the reason for the woeful amount of saving amongst the general population today is that people are more interested in having stuff now and figure that they'll always have access to cheap credit (and have a job). That perception is set to change as events unfold.

There are also a lot of hidden people who never had these things and would go to work and go home to hibernate until the next working day. Existing. But as they're "not out there", you don't see them.

!!!!!!? wrote: »

the average person with a job should certainly be able to put money aside with some sensible control of their spending. It would appear that this has not happened and the population has for the most part chosen to go on an orgy of consumption and borrowing during the good times. A bit like our woeful government in fact......

You would think so, but if you live in an area where there aren't many jobs and the jobs are low paying, the cost of living has escalated by quite a bit. I had a friend who sold his house, he could still afford the mortgage, he couldn't afford the bills that kept going up.

I think people assume everybody's got the same money that they have. I've often been called tight for not wanting to do something because I couldn't afford it - after which time you aren't asked again, because you're tight.

I found most people who called me tight were in a couple, with a partner earning significantly more than they were.

If you have to merely exist, to save, then others would tell you you have to live for today or live a little too.

PasturesNew

Sir_Humphrey wrote: »

The biggest emergency that eats into savings is unemployment.

Unemployment has happened to me just about every year (sometimes twice a year) for the last 20 years. I don't sign on, I just take "the first/next job", which we're told to do (when in reality it locks you further into less pay).

For most people, losing one month's pay randomly every year would leave them overdrawn. As it's happened to me so many times, finding myself not working is "just another normal day", which means when I am working I am having to backpay the hole I just created from not working, then building up the nest egg for the next time.

Sometimes I end up doing some "self employed" work, part-time, because it's better than nothing, that then ends up not even paying out etc. But I've always taken "the first/next thing anybody offers me that I can do, at any rate". While this would seem a bad move retrospectively, at the time, you just do what you can to keep going.

If you didn't get paid at the end of January, if your next pay was 28 February, how long would it take you to dig out of that one month's financial blip? It can take 6+ months. ... what if it happens again in August?

baby_boomer

The Conservatives should commit themselves to maintaining the government's inflation rate target which the Bank of England is supposed to safeguard. And they should ask Gordon to commit himself to it as well.

This is the most important long term defence of pensioners' hard earned capital.

Unfortunately it may be the most important medium/long term casualty of the current crisis .

WTF?_2

baby_boomer wrote: »

The Conservatives should commit themselves to maintaining the government's inflation rate target which the Bank of England is supposed to safeguard. And they should ask Gordon to commit himself to it as well.

This is the most important long term defence of pensioners' hard earned capital.

Unfortunately it may be the most important medium/long term casualty of the current crisis .

Keeping inflation under control has been shown to be the least of the government's priorities. They allowed crazy amounts of inflation under the cover of 'imported deflation' from cheap consumer goods and cheap immigrant labour (which had the effect of keeping CPI low and creating downward pressure on wages) and the moment they get the chance they are preparing to print money and throw even the pretence of inflation targeting out the window.

They're a one trick pony - relying on inflation and cheap money to create the appearance of economic prosperity and even after it all blows up in their faces, their stated policy objective is to restore the supply of cheap money by creating it out of thin air if necessary without addressing the fact that the country (and many individuals too) is living beyond its means.

Too much debt? Borrow more and print money!

StevieJ

!!!!!!? wrote: »

A move like this is extremely welcome. It sends the right general message (we need to save more and borrow less to get out of this mess) and it encourages people to be sensible with their cash.

It sends the right general message (we need to save more and borrow less to get us out of this mess)

Not the best of policies in a Recession, although may be useful further down the line when the economy is booming.

nickmason

PasturesNew wrote: »

They also don't understand ISAs.

I think that was my point!

PasturesNew

nickmason wrote: »

I think that was my point!

Should have made it clearer then

I'm having trouble following your postings and knowing what the points are I'm afraid.

I am not sure if it's your style or because I've no idea about 90% of the subject matter. It's certainly not a blonde moment as mine's out of a packet.

nickmason

PasturesNew wrote: »

Should have made it clearer then

I'm having trouble following your postings and knowing what the points are I'm afraid.

I am not sure if it's your style or because I've no idea about 90% of the subject matter. It's certainly not a blonde moment as mine's out of a packet.

Thank you (genuinely) - it's almost certainly my style - I always wonder whether I'm coherent or not.

Somewhere along the way there's been enough evidence that I've a good brain. A good brain doesn't necessarily mean a good communicator - often the opposite, in fact - but typically I seem to be able to communicate well enough (my economics tutor used to describe my essays as a combination of a business report and a Gladstonian speech to 'the House' ).

I have therefore rationalised the fact that if I can't explain what's going on, then it's probably too complicated! If politics becomes too complicated to understand, then it's a sham, because the vote isn't informed.

Therefore I conclude that we must simplify. (taxation and tax credits being just one area).

This is a highly personal position - I do recognise that some people think that democratic government doesn't require politics to be understood; that politics can be delegated; or indeed that it is useful to complicate matters beyond comprehension. I just find all of those positions awkward, if we are to put people first. Another explanation is that we should trust politicians, but somehow that "culture" seems to be pretty dead in the water (with no help from most of the current incumbents).

nickmason

PasturesNew wrote: »

Sometimes I end up doing some "self employed" work, part-time, because it's better than nothing, that then ends up not even paying out etc.

Talking of "self-employed", I've just realised I'm up for a £100 fine for not registering myself as self-employed, for a piece of freelance work I did for a charity, that I thought I would need to declare in my self-assessment.

Only found out when I tried to get registered for self-assessment! (which was an expensive 0870 exercise in itself - and no, the saynoto0870 number has been disconnected/changed).

Not sure how I was supposed to know that I needed to register. Spoke to an accountant friend of mine about this, and she pointed out that this is happening a lot. Unsurprisingly many people are just pocketing the cash, rather than declaring it and incurring a £100 fine.

Complexity and the law of unintended consequences.