500,000 pensioners pay the price for the indebted.

ad9898_3

I saw Yvette Cooper on Newsnight last night, she gave short shrift to savers/pensioners, then started blathering on about mortgage customers and how they are saving £200 a month. I'm not having a go at mortgage holders in general, just those who are looking out of their front window today at their BMW X5 that was bought by mewing, holding a letter from the bank saying they are in arrears, while the pensioner next door can barely afford to eat, something's gone badly wrong.

The country's 8.5m pensioners with savings have lost massively through the base rate collapsing from 5% in October to 0.5% yesterday. Many of them rely on the income from their savings accounts for their day-to-day survival.
Last night, the country's biggest pensioner group warned that yesterday's cut would push a further 50,000 older people below the poverty line - bringing the total in the past six months to an estimated 500,000.

http://www.thisismoney.co.uk/news/article.html?in_article_id=480169&in_page_id=2&ct=5

Jennifer_Jane

Thanks so much for this ad9898. We have a morally corrupt government, once again. So much for the joy and high ideals of when they were first elected.

Of course all pensioners rely on savings, by the nature of the term they cannot work so even if they are lucky enough to have the full basic state pension and a good Company pension, they will still rely on their savings to see them through. And, as described, many pensioners (including my sister who did not work) are relying on a combination of BSP and savings.

They are now using their capital to pay for the basics in their lives, but still have to pay increased energy, food, and council tax rates which have increased way above inflation. The argument that if savings are at 2% and inflation is at 0.1% then everyone is winning, is just mathematical (and spurious), it does not account for what constitutes Pensioners' inflation.

Jen
x

lostinrates

The point has also been made that it is pensioners who spend. I don't know whether that is true or not...but I can see why in theory it would be!

The other big groups of savers are of course those of us saving to get on the property ladder and will according to many 'kick start' the property market again. Now while I worry about the hopes behind a kick started property market it seems to me that if FTBs are the future of the property market, and pensioners are the big spender....isn't it a bit daft that these groups are effectively losing out on the loss of spending power?

As I say, its the theory put forward yesterday not a theory I am sure I agree with, but if you follow the reasoning presented as it was last night....its very flawed.

dealsearcher

It is not only pensioners. At least pensioners have their pension.

What about people who have had to take early retirement or have been made unemployed for medical or other reasons? They are not old enough to take their pension, have 'too much' in savings to claim benefit and are totally reliant on their savings.

So much for being prudent!

MyLastFiver

ad9898 wrote: »

not having a go at mortgage holders in general, just those who are looking out of their front window today at their BMW X5 that was bought by mewing, holding a letter from the bank saying they are in arrears, while the pensioner next door can barely afford to eat, something's gone badly wrong.

http://www.thisismoney.co.uk/news/article.html?in_article_id=480169&in_page_id=2&ct=5

I agree with the sentiment, but would take issue with the strong caricatures you draw, which I believe simplify the debate.

1echidna

Unfortunatel if one looks at the past forty years or so savers have very often been looking at a dwindling capital base in real terms. Interest rates need to be well ahead of inflation rates to give a real return on savings and this often has not been the case. Nothing new really about the usually dwindling capital base in real terms of savers who rely on their savings for income.

ad9898_3

MyLastFiver wrote: »

I agree with the sentiment, but would take issue with the strong caricatures you draw, which I believe simplify the debate.

I admit, it does simplify things, but I feel when using a forum to make points it's easier to do that, to try and get right to the heart of the matter. If you're standing in front of someone debating a point it is easier to go into more detail.

Radiantsoul

ad9898 wrote: »

I saw Yvette Cooper on Newsnight last night, she gave short shrift to savers/pensioners, then started blathering on about mortgage customers and how they are saving £200 a month. I'm not having a go at mortgage holders in general, just those who are looking out of their front window today at their BMW X5 that was bought by mewing, holding a letter from the bank saying they are in arrears, while the pensioner next door can barely afford to eat, something's gone badly wrong.

http://www.thisismoney.co.uk/news/article.html?in_article_id=480169&in_page_id=2&ct=5

A lot of pensionners have probably benefitted from rapidly rising house prices though. You could argue that rising house prices distribute wealth from the young to the elderly. Many old people seem loathe to sell and prefer to leave it to their ungrateful kids for some reason!

I also wonder how many pensionners are really living off bog standard savings rather than longer term fixed rates?

ray123

I believe the technical term for this is ECONOMIC EUTHANASIA!

beecher

Radiantsoul wrote: »

Many old people seem loathe to sell and prefer to leave it to their ungrateful kids for some reason!

Many want to remain living in the house they have lived in for decades. Many live in strong communities with good neighbours and the upheaval of moving would be too great for them. Why should they sell up?

StevieJ

The state pension will be uplifted by 5% a good rise at the moment :beer:
The worry is not meagre interest rates they are receiving now but the threat that they may be washed away in the future by very high inflation.