UK goes from footloose to frugal

posh*spice

UK goes from footloose to frugal

After a decade of easy credit and runaway debt, saving is firmly back in fashion.Just 12 months ago, we were saving less in Britain than at any time over the last five decades.
That's changing. Now more of us are cutting back on what we spend and putting our money away for a rainy day.
"The savings ratio is moving back up, it's now up to about 4 to 5% and I think that we're going to see it move up over the next two to three years," says Graham Turner, economist and author.
At a time when interest rates along with trust for financial institutions are at an all-time low, risk is high and there's no guarantee of return, deciding where to put your cash is more difficult than ever.
According to Justin Urquhart Stewart of Seven Investment Management, "We've had the entire population getting drunk on credit, then mugged by feral bankers and ignorant politicians - so people are absolutely bemused as to what they should be doing."
The savings ratio surged from a negative number at the start of 2008 to almost 5% by the end of the year.
Now one in 10 people are saying they intend to save more in the coming 12 months - and three million people who have never saved before say they will start putting money aside.

According to Dax Harkins of savings organisation NS&I, interesting trends have emerged among all age groups of savers, but it is the youngest age group that has provided the biggest surprise.
"The big surprise from our perspective was when we looked at the 25 to 34-year-olds," he says. "We generally look at these people as footloose and fancy-free, but we've seen these as the best savers of the last quarter."

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mbga9pgf

Yeah. 85% of take home last month.

F*ck the economy. Im saving for a hooose.

Arcaine

Savings are good for the economy in the long run, todays savings is tommorows capital. We have to get back to a more sustainable equilibruim of savings and spending.

mbga9pgf

Yep. Or in my case, take all my capital abroad in 10 years and emmigrate.

JonnyBravo

mbga9pgf wrote: »

F*ck the economy. Im saving for a hooose.

Why not get a watering can in the meantime? They're much cheaper.

:rolleyes:

amcluesent

As always, don't follow the sheeple!

There's some amazing bargains to be had, as distressed sellers unload inventory to pay off debt. Always haggle!

mbga9pgf

Such as? Want to give an example there partner? I am personally waiting for the BR wave of 2010 before I get in.

thriftybabe

mbga9pgf wrote: »

Yeah. 85% of take home last month.

F*ck the economy. Im saving for a hooose.

We are the total opposite. We have saved for years and years and now we cant! if everyone did as we did may be we would not be in this bother!

DaddyBear

1 in 10 peopleintending on saving is hardly a sign if a frugal country. It is, however,an improvement on what will be known as the decade of recklessness. Looks like people are now seeing that debt is NOT wealth and that having everything you want NOW is probably not the sensible option. Hopefully this will lead to a nicer, less materialistic society but I won't hold my breath.

inspector_monkfish

mbga9pgf wrote: »

Yep. Or in my case, take all my capital abroad in 10 years and emmigrate.

so are you planning to buy a house here - live in it for less than 10 years - and then emmigrate ?

CLAPTON

be careful what you wish for

try googling 'the paradox of thift'

basically it says
-if everyone decides to increase their saving
-then that means that everyone reduces their spending
-reduced spending mean that shops, pubs, eating places etc etc will experience reduced trade
-when trade is reduced then companies start laying people off
-these redundant people obviously can't increase their savings as they intended ..in fact the exact opposite
-these people who have been laid off will stop/deduce spending in shops/pubs etc and so will lead to a new wave of redundancies
-these new redundancies will obviously not be able to increase saving as intended etc etc and the cycle continues

net effect is that overall there is LESS savings in the nation but massively more unemployed people

so when you read that you can't borrow your way out of debt... that may well be true for an individual person or company but if the nation tries it then the effects will be quite the opposite ... which is why the governments of all the major nations are NOT reducing their spending (unlike the 1920/30s ) because they know this will mean massive increases in unemployment. (ps. the Conservatives know this too which is why they are very vague about their spending/borrowing plans.. remember the difference between aspiration and committed policy)