Savers you've never had it so good?

Stavros_3

gozomark wrote: »

how on earth was my question patronising ?

It wasn't

As for money saving medals - true irony in your comment - I've had one per every three posts, you've averaged one every post - where did yours com from if not other members congratulating you - still I guess it means your comments are three times more useful than mine - congratulations
Here's another 'gong' ignore their comments,

The majority of poster's appreciate your efforts
:T

gozomark

at the risk of being accused of mutual backslapping, thank you Stavros

Reaper

As I see it there are two ideas which are causing all the problems.

1) Many pensioners are emotionally unable to cope with the concept of spending any of their capital now, and refuse to accept the idea that they have been for years without realising it.

2) Despite the title of this thread some will be worse off than before - and yes that includes many pensioners. The point we have been trying to make is that it does not automatically follow that low interest rates by themselves mean you are worse off than before. Those that still haven't grasped this after all the careful explanations that have been posted never will.

Although I ducked out early I have been looking back from time to time and get increasingly depressed. Gozomark and others have been very patient trying to explain the ideas in the face of blinkered and even aggressive responses. A big thanks from me, who gave up early, for trying.

harryhound

Perhaps everyone entering into this discussion should give an idea of their age.
I am one of those dreaded "Baby Boomers" that are going VOTE to bankrupt UK Plc.?

In my life time I have seen the effects of Wars & Credit Crunches (The used to be called "Credit Squeezes") & Inflations reduce my parents and grand parents to a "proud" near poverty. At least the FEMALE ones who were stupid enough to live too long.

The reality is that this country in particular is up to its eyeballs in debt, both corporate, governmental and personal.
It is also running a deficit with the rest of the world that is about 400 GBP per inhabitant. Does this feel like the 1960's & 1970's ?
No the situation is a whole lot worse than when Harold Wilson had to devalue the currency by 15% and ran around telling lies about "the pound in your pocket".
We have already devalued by 30%. This this time there is no North Sea Oil and Gas waiting to be found to rescue our government and people.
This time the toxins have been spread throughout the world by the banking system and there is no lender of last resort. Giving money to a UK vehicle plant simply means bigger profits (or smaller losses) in the far eastern HQ.

Most of the World's money that has not gone to money heaven is in China or some of the lesser sovereign wealth funds in Asia and Arabia. Barclays Bank is paying its Arab friends 14% to avoid bankruptcy.

When you know what the WEALTHY countries of this world are going to do for us
supplicant countries, do let me know. Apologising for the Opium Wars might help.

In the meantime our government has to think of a way of getting back on an even keel.

Getting rid of the debt requires a default, telling the voters to work a 7 day week, jacking up the falling tax take or inflating it away somehow.

The future is grim - you might be able to say it is not as grim as some people might think it is, but playing games with small percentages of an already 30% devalued currency is pointless. Most of the so called price reductions are VAT and desperate companies who know you cannot actually go out of business until the cheques bounce, so sell at a loss until they have liquidated the business.

So tell me how a pensioner already facing a declining standard of living (as income drops) is going to be better off in years to come if they go out and spend now?

Harry.

PS I've posted elsewhere that the government has no other choice than to "ease" the situation to try to keep production going and keep the economically active in a job - BUT I would wager that living standards in this country will be lower in 5 years time,
especially for pensioners.
What the government is NOT doing is getting this message across to the 40% (?) of the economy and employees that it finances.

gozomark

harryhound wrote: »

So tell me how a pensioner already facing a declining standard of living (as income drops) is going to be better off in years to come if they go out and spend now? .

who says their standard of living is dropping ? how much of this thread have you read ?

GeorgeHowell

Short of trying to mess about with 'personal inflation rates', RPI is still the best arbiter for people with a substantial mortgage and RPIX for those without one. CPI is an economists' measure really which facilitates international comparisons and allegedly provides the best guide to the trend in consumer behaviour.

I too cannot really foresee any mainsteam inflation measure coming in at -2% within a year. I think that Brown's forthcoming 'quantitative easing', the falling pound, the greed and profiteering of the oil and utility companies, and the resistance of wages to cuts in the UK will put paid to actual defaltion. But clearly we have to relinquish past "certainties" and open our minds to the previously unthinkable. So maybe it will happen. In which case savers can draw on their capital by up to 2% without being any worse off in terms on real purchasing power. Many will still not see it that way however, because none of us behaves totally rationally and many are relative strangers to rationality.

harryhound

You just don't begin to understand.
Virtually all pensioners face a falling standard of living.
They lose their earnings.
Their cost of living goes up faster than the average because they are in a make do and mend situation.
They continually face the problem of "bits not working the way they used to"; at the simplest level they cannot run for a bus and have to get a taxi. That situation fits a lot of daily tasks where they are forced to employ personal "services".
These types of costs tend to "inflate" faster that industrially produced goods.

That is BEFORE we come up against the credit crunch.
The current lull in price rises, as I have explained, is a short term effect: 2.5% off VAT, previous prices rises in double figures falling out of the calculation and commerce making the decision that it is better to go bust in 12 months time rather than 12 weeks by consuming the seed corn of working capital..
Industrial output is falling all round the world, this makes ALL of us poorer and capitalism tends to make sure that the burden falls hardest on the poorest.

The only people enjoying an improvement in their living standard are those who borrowed silly amounts of money and have just had a nice cut in their mortgaged debt payments.
Never mind those trying to live on a pension, knowing taxes will go up or prices will go up, probably both; how would you feel if you were a peasant farmer living partly on a grant from Oxfam?

Harry

BTW how old are you and who pays your wages?

shindigger

gozomark wrote: »

more nuts than in a family sized bar of Cadbury's whole nut chocolate

Really?
Care to explain why?

You believe official stats. OK, thats fine. Nothing to see here.

shindigger

gozomark wrote: »

CPI over the last 12 months was 3% - what did you earn on your savings in the last 12 months ? 5-6% ? - so you had a real return of 2-3%.

what will CPI be over the next 12 months ? 1-2%, and you can still fix at 3.5%, so a real return of about 2%

unless you eat food or get on a train to work.:rotfl: :rotfl:

I like you youre fuuuuunnnyyy.

shindigger

RayWolfe wrote: »

There are none so blind as those who don't want to see. <proverb>

Or those that dont have to eat or commute.
Obviously you dont do either of these things.