Why are we saving?

john_s_2

sh856531 wrote: »

Cripes!

Does that mean that people were essentially losing money having it in a savings account after inflation was factored in. I can't remember this far back but I know inflation was way higher than 12 during the 80s...

In 1989 the BoE rose from 12.9% to 14.9%. RPI stayed around 7.5% although went up to 8.3%.

From 85 to 89 RPI went down to nearly 2% and up to nearly 8.5%. While the BoE started around 13% then went down to just below 8% then back up to nearly 15%.

Maybe inflation wasn't as high as you remember? It last went above 12% in the Spring of 1981. Apart from a brief period it spent most of the 70s in the teens, if not the 20s.

This is all from a spreadsheet I put together some time ago but I would have got the data from the ONS and BoE websites (RPI was the only index I kept).

sabretoothtigger

What was the inflation vs rates during the 70's and isnt it best to be invested in a house if that 'slippage' was to occur in the currency again


I dont have anything more relevant then this to hand, obviously the lower chart is usa

cheerfulcat

sh856531 wrote: »

Cripes!

Does that mean that people were essentially losing money having it in a savings account after inflation was factored in. I can't remember this far back but I know inflation was way higher than 12 during the 80s...

12% was a pretty good rate at the time - perhaps you are thinking of the base rate, rather than inflation?