Savers you've never had it so good?

shindigger

gozomark wrote: »

thats correct, I'm assuming they are an average person, which is all I can do

Your average person neither commutes nor eats.
Useless analysis.

shindigger

MiserlyMartin wrote: »

I am sorry but I don't buy this deflation arguement, RPI has been distorted by lower mortgage repayments due to stupidly low interest rates. Martin talks about the price of cars falling in the last posts, but we all know how the price of cars has been rising lately not falling! Vauxhall and Ford have raised prices partly due to the weak pound. The weak pound, which has been hammered by having such low rates is making all our goods increase in price because most of what we buy in this country is imported now.

So for most people RPI is not really useful, CPI is 3% but even that is not indicative of a lot of peoples real inflation rate as Martin admits himself. Petrol up too. Until I actually see a real decrease in inflation, I will not feel richer. My personal rate of inflation has hardly changed since RPI was 5%, yet we have crazy 2% savings rates. I don't see any sign of deflation, with Gordon printing money all I can fear is high inflation. The 15% VAT rate was another way that they have fudged the inflation figures and that will go back to 17.5% in less than a year taking prices back up with it.

So I can't really see the point of this articles headline as it is for many people, not the case.

And then theres the VAT cut. The only reason the government lowered it was to manipulate headline rates. Totally corrupt. Totally discredited.

shindigger

gozomark wrote: »

council tax is a tax, and so is excluded from CPI and RPI......

Your point being?????:rotfl:
Do you work for NuLiebour by any chance??

shindigger

lukekelly wrote: »

You can't talk about capital without considering inflation. If there's 20% inflation and 20% interest then spending your interest will mean that as an absolute sum your savings remain the same but in real terms your savings will become almost worthless. In times of deflation it goes the opposite way, you can spend your capital and not reduce your spending power.

Have a look at Martin's and other's posts on this thread for some clear and lucid explanations of this.

If you want a concrete example there are plenty on this thread, Martin's car example is particularly good. Here is another one.

At present suppose you have enough savings to pay for 100 months of residential care. If that care increases in cost by 10% then you'll now only have enough money left for 90 weeks. If at the same time you earn 10% interest you could add it to your savings and would still be able to afford the same length of care. If you spent that interest, even if you left the capital alone, you would have reduced the amount of care you could afford. If it was the other way round, care decreased in cost by 10%, then you would have enough money for 110 weeks of care. Even if you earned no interest you could spend £10 of your capital and still be able to afford 100 weeks of care. It's not your capital that matters, it's what you can buy with it.

(All these numbers are very slightly wrong, but if you can see why they're wrong then you'll know that it doesn't really matter and if you can't it also doesn't matter!)

Except car manufaturers are raising prices.
Unless you want a 3 litre Chysler for £12000:rotfl: :rotfl:

harryhound

If you don't need to go into a care home, you are automatically at least 250 GBP a week better off.

The only organisation capable of forcing down care home fees is the local authority, and by doing so it forces up the costs for those not financed by the taxation system.

Come on gozomark, how old are you and who pays your wages?

apt

Despite the moaning of the Daily Telegraph and presumably also the Daily Wail the coming year will be a lot better for the vast majority of pensioners than last year. Fuel and food prices are likely to be stable or falling compared to the sharp rises last year. And basing the state pension rises on September when inflation was close to its peak (plus £60 on top) has also worked out favourably. Many pensioners are quick to complain about the costs that have gone up, and much less quick to acknowledge some of the areas where they are favoured e.g. no National Insurance, free off-peak bus travel, free prescriptions, free TV licences for the over 75s. The government has been pushing these costs up for the working population, but pensioners are largely protected. I'm not particularly opposed to this, but pensioners should appreciate that they've had gains as well as losses from government policy.

GeorgeHowell

So what's the conclusion then ?

It's not true that savers have never had it so good, but again not true that they've never had is so bad. Nobody knows what is going to happen to real interest rates over the short, medium, and long term, so we don't know which group is going to come out of it all best off or worst off. It's the uncertainty and the insecurity that's the killer.

There's nothing any of us can do about the macroeconmic circumstances.

Don't worry; be happy.

harryhound

apt wrote: »

Many pensioners are quick to complain about the costs that have gone up, and much less quick to acknowledge some of the areas where they are favoured e.g. no National Insurance, free off-peak bus travel, free TV licences for the over 75s. .

I don't think the above actually cost the government anything significant, that is why I have taken free drugs out of the list.
Don't forget the free eye test:j

For what it is worth, I think a lot of retired people have a similar irresponsible "the state will provide" attitude, similar to some young people. We all have kidded ourselves that the state can produce magic money of its own, having been brainwashed by 60 years of the welfare state.

Harry

:beer: Free beer that is the answer, then we can all drink ourselves to death and not be a drain on the exchequer.

GeorgeHowell

harryhound wrote: »

For what it is worth, I think a lot of retired people have a similar irresponsible "the state will provide" attitude, similar to some young people. We all have kidded ourselves that the state can produce magic money of its own, having been brainwashed by 60 years of the welfare state.

Yes, this is a major problem for this country nowadays. Many people do not have as mature or self-reliant an attitude as their forebears did. It manifests itself in many ways, not least of which is the tendency of some young people to believe that their parents can, will, and should underwrite them financially all their lives. Similarly many older people seem to believe that they are entitled to the same standard of living in retirement as when they were working. Also whatever goes wrong in some people's lives, in their minds' it's someone else's fault, and someone else's responsibility to sort it out. It's a national cultural problem which would take a long time to turn round even if the will and the werewithall existed to attempt to do so

gozomark

harryhound wrote: »

Come on gozomark, how old are you and who pays your wages?

seeing as you ask so nicely, I'm in my 40's and retired, living off savings