SOS Save Our Savers

tradetime

Old_Slaphead wrote: »

There's a lot more savers than borrowers. Many borrowers are perceived as being reckless, greedy &/or naive in their accumulation of debt.

Well I don't know, as the only country in Europe with more credit cards than people and given that our personal debt was in excess of our GDP in 2007 and the last time I saw the figures, in 2008 I wouldn't have thought we were overly burdened with savers.

gozomark

Old_Slaphead wrote: »

Many borrowers are perceived as being reckless, greedy &/or naive in their accumulation of debt.

Are people with mortgages reckless, greedy or naive ? After all, mortgages represent the vast majority of most people's debt.

tradetime

gozomark wrote: »

Are people with mortgages reckless, greedy or naive ? After all, mortgages represent the vast majority of most people's debt.

Agreed, the majority of debt in the UK is indeed mortgage related, the point I was trying to make is that there's no free lunch, any significant increase in interest paid on savings will result in a disproportionate increase in interest charged on debt. For the purposes of the point I was making, the source of the debt is not as important as the amount. Significant increases in interest rates will make the country as a whole worse off. The value of debt needs to be significantly reduced before the country as a whole wants interest rates moving upwards.

Old_Slaphead

gozomark wrote: »

Are people with mortgages reckless, greedy or naive ? After all, mortgages represent the vast majority of most people's debt.

Many people could/can afford their mortgages but now have the bonus of a much lower than anticipated monthly repayment. Many people I know are quite smug as to how much they are 'saving' - several hundred pounds a month in many cases.

Low interest rates will ultimatedly mean higher house prices as people chase property and bid prices up to the max. once credit restrictions ease - something to do with the British obsession with property ownership.

How many people naive people got conned into 125% mortgages (were they really that thick to think that HPI would last forever?) BTL ownership and how many were seduced by the 'because I'm worth it' culture and MEWed to 'invest in high depreciating luxuries - new cars, kitchens, plasma TVs, assorted bling etc.

They're the irresponsible people who are now being 'baled out' by the interest rate cuts.

gozomark

Old_Slaphead wrote: »

Many people I know are quite smug as to how much they are 'saving' - several hundred pounds a month in many cases.

Almost as smug as many savers were when they were getting 7% in interest...

It sounds like borrowers are either niave/stupid or smug/clever.

gozomark

As a matter of interest, where do you think base rate should be now ?

Old_Slaphead

gozomark wrote: »

As a matter of interest, where do you think base rate should be now ?

Probably around 2%.

The big issue is that banks have hugely increased their margins from around 1-1.5% to nearer 3-3.5%. They're the ones exploiting the situation.

EdInvestor

More whingeing from the young generation who seem to forget about the Bank of Mum and Dad.

http://www.telegraph.co.uk/news/newstopics/politics/7085489/Baby-boomers-own-half-of-Britains-wealth.html

It is wrong to think of mortgages wholly as debt.You have to live somewhere and this is accomplishd either via a bank loan or paying rent.Part is debt, part is investment.The investment part mounts up as long term assets (you hope), like a pension or shares.

gozomark

If base rate was 2%, I don't think it would make much difference to the best savings rates, or to many mortgage rates

gozomark

EdInvestor wrote: »

It is wrong to think of mortgages wholly as debt.

A mortgage is debt, but used to purchase an investment that will hopefully go up in value.