Savers take more than £8bn from accounts

Andrew64

As the article says, it's normal for savings to go down in January, but this is a very large drop.

http://www.independent.co.uk/news/business/news/shares-crash-as-savers-raid-1638bn-from-accounts-1635889.html

"However, it is the raid on savings that offers the strongest evidence of financial hardship. Companies and individuals withdrew £8.5bn from bank and building society savings accounts during the first few weeks of the year. To some degree this follows a normal pattern... but the extent of the withdrawals is unusually large: in January 2008 the equivalent figure was £1.3bn. On a seasonally adjusted basis, the flow of savings by households in January was £3.3bn down on the previous month."

thriftybabe

My friend has decided to get a new kitchen rather than have the money in the bank earning very little interest as there are good deals around just now. I have heard a few people doing this as they think they are going to get things cheaper.

System

This is good right? This is the whole point of lowering interest rates, make people spend some cold hard cash?

beecher

Would this sum include moneys which are withdrawn from savings accounts and then moved elsewhere? I withdrew all of my savings in December/January and placed them in higher earning accounts.

ad9898_3

Joeskeppi wrote: »

This is good right? This is the whole point of lowering interest rates, make people spend some cold hard cash?

It's unlikely to be being spent, more like moved into some other vehicle, or being used to pay down debt.

itsnever2lateisit?

ad9898 wrote: »

It's unlikely to be being spent, more like moved into some other vehicle, or being used to pay down debt.

I am concidering what to do, personally I am not prepared to lend my money to a bank for less that 0.5% when they are lending it on at 11.9%. Rates on loans have gone up if anything, and I may withdraw out of spite

Sir_Humphrey

itsnever2lateisit? wrote: »

I am concidering what to do, personally I am not prepared to lend my money to a bank for less that 0.5% when they are lending it on at 11.9%. Rates on loans have gone up if anything, and I may withdraw out of spite

It is the real rate of return that counts. YoY RPI is 0.1%, and prices have been falling MoM since the late autumn. With deflation, savers get a return even at 0% interest, and continue to outperform other investments. Don't fall victim to money illusion.

We savers need to stop whinging.

Old_Slaphead

Sir_Humphrey wrote: »

It is the real rate of return that counts. YoY RPI is 0.1%, and prices have been falling MoM since the late autumn. With deflation, savers get a return even at 0% interest, and continue to outperform other investments. Don't fall victim to money illusion.

We savers need to stop whinging.

RPI includes mortgage interest - most savers don't have a mortgage.

Their personal inflation rate (mainly food, fuel costs and council tax) is several percentage point higher

bo_drinker

itsnever2lateisit? wrote: »

I am concidering what to do, personally I am not prepared to lend my money to a bank for less that 0.5% when they are lending it on at 11.9%. Rates on loans have gone up if anything, and I may withdraw out of spite

The very reason most of it is being withdrawn / moved I would say.

ad9898_3

Sir_Humphrey wrote: »

It is the real rate of return that counts. YoY RPI is 0.1%

The question I want answering is RPI is at .1%, CPI is at 3%, why do we use CPI when inflation is going up, and all of a sudden we use RPI when inflation is going down. The simple reason seems to me is to keep interest rates low, and so try to blow some air in to burst housing bubble.

Like I say a question I would like answering.

Sir_Humphrey

Old_Slaphead wrote: »

RPI includes mortgage interest - most savers don't have a mortgage.

Their personal inflation rate (mainly food, fuel costs and council tax) is several percentage point higher

1) I don't know where you get the idea that most savers have no mortgage.

2) If a saver is saving to buy a house, then the fall in house prices makes RPI more relevant than CPI.

3) These are the non-seasonally adjusted MoM CPI figures from the ONS website.

2008 Oct -0.2
2008 Nov -0.1
2008 Dec 0.9
2009 Jan -0.8

Of course, if people here want to flush away their savings for no reason, then why should I care!