Will The Banks Offer Decent ISA Deals Come April 2009

harz99

RayWolfe wrote: »

Not if inflation is dropping as well!

Inflation in my book refers to costs going up, so when it is dropping that simply means costs are still going up, but less quickly.

That is not the same as a decrease in one's standard of living, from having less money to live on this month than I had last month!!!

RayWolfe

That may well be true but if you are getting "inflation" or "inflation plus" in interest you are as well off as you were when both inflation and interest was high. I can remember 15% interest rates but I promise you that with inflation of 17%, I was not quids in. If inflation is now 2-3% and interest is 3-4%, you're still winning.

harz99

RayWolfe wrote: »

That may well be true but if you are getting "inflation" or "inflation plus" in interest you are as well off as you were when both inflation and interest was high. I can remember 15% interest rates but I promise you that with inflation of 17%, I was not quids in. If inflation is now 2-3% and interest is 3-4%, you're still winning.

If you go back to #6 you will see I was referring to the loss of income those that rely on it to supplement pensions etc. have suffered. Not as you appear to refer to; keeping your return ahead of inflation and not eroding the value of capital.

To use myself as an example; with interest rates halved to around 3% for a monthly income seeker I am about £80 per week worse off. That is what matters to me and people in my situation.

MiserlyMartin

RayWolfe wrote: »

Not if inflation is dropping as well!

But inflation is still 4.1%. That is more than twice the 1.5% base rate. It is getting harder to find any savings accounts paying over 2.5%. The weaker pound is not helping this at all. Most of our goods are imported and they are getting more expensive. The government/BoE haven't a clue. We'll see what happens on 16th, but I think it won't fall by much for Dec.

Milarky

If it's the having the tax concession - rather than the actual interest - that people are after they could wait all of tax year 2009/10 before dipping their savings into an ISA - in the hope that by waiting it out rates will have picked up...

Gambler

Milarky wrote: »

If it's the having the tax concession - rather than the actual interest - that people are after they could wait all of tax year 2009/10 before dipping their savings into an ISA - in the hope that by waiting it out rates will have picked up...

I'm thinking of closing my ISA's in April (£50K) and transferring to FD offset mortgage. I have 4 years left so might drip feed £7,200 into ISA's for 4 years.

jon3001

harz99 wrote: »

I don't disagree with most of your sentiments; but you are ignoring those of us who rely on income from our savings to supplement pensions, and whom are suffering huge drops in the amount we have to live on since rates nose dived.

Then don't rely on income from savings. Get it from investments instead.
http://forums.moneysavingexpert.com/showthread.html?t=1404275

LesU

jon3001 wrote: »

Then don't rely on income from savings. Get it from investments instead.
http://forums.moneysavingexpert.com/showthread.html?t=1404275

So why aren't the banks doing the same thing and offering us , say a third, of what they are making? If it is that easy to make money then corporate bonds could yield a half of what they are supposed to be making and still attract the whole of the savings community.

jon3001

LesU wrote: »

So why aren't the banks doing the same thing and offering us , say a third, of what they are making?

I'm not sure what you're asking. Why aren't banks doing the same thing as what? Investment banks do exist if that's what you're asking. How much do you think they make and why should they give you a third of it?

Or are you asking about buying corporate bonds issued by banks?

LesU wrote: »

If it is that easy to make money then corporate bonds could yield a half of what they are supposed to be making and still attract the whole of the savings community.

Savers usually want security of capital. That's not guaranteed with corporate bond - you have to assume an investment risk and the value of the bond will fluctuate on the secondary market. The income is more reliable though because long-term fixed-rate coupons exist.

What I'm saying is that capital fluctuations should be less of a concern to those seeking income.

harz99

jon3001 wrote: »

Then don't rely on income from savings. Get it from investments instead.
http://forums.moneysavingexpert.com/showthread.html?t=1404275

Thanks for the reply, but no thanks!

This thread is on the ISA's board and primarily concerns interest rates not other forms of investment.

In any case I've been there before, got badly burnt and will never go there again.