SOS Save Our Savers

gozomark

EdInvestor wrote: »

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

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What a stupid article :-)

People who have worked for 30 years have more assets than people who have worked for 10 years...what amazing revelation can we expect next, under 5s own less shares than over 40s ...

tradetime

EdInvestor wrote: »

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.

I don't know who that's directed at, I suppose it depends on the age bracket you define as "the young generation" Though I have nothing to "whinge" about, so I assume it's not me on either count.

I personally never said anything about how mortgages should be "wholly" thought of, but for the purposes of interest rates they represent a debt, if interest rates are driven up to the point where you can't repay, then you default, doesn't really matter how you look at it then. The point still remains the same, driving interest rates up purely to appease the money in savings accounts, at the risk of defaulting the debt is not in the countries best interests as a whole.

I don't seek to justify where we are, or the rights and wrongs of the situation, but we are where we are and "cutting the nose off to spite the face" won't solve it.

bendix

gozomark wrote: »

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

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I'm getting over 7% in interest at the moment. :j Should I be smug?

gozomark

Is it in £ ? If so, you've every right to be smug :-)

MarkyMarkD

Old_Slaphead wrote: »

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.

Sorry, but that's a completely ignorant assessment of the situation.

Are you comparing average mortgage rates (including the impact of low-rate trackers) against average retail funding rates (including the impact of high-rate fixed rate products)?

Or are you making the Daily Mail mistake of comparing headline, new business, mortgage rates against a completely irrelevant Bank of England base rate?

Old_Slaphead

I don't read DM so it's the former (although I don't know ratio of products so it's a fairly crude observed average).

Are you saying, against perceived wisdom that banks haven't used the credit crunch to increase their gross margins?

I'm also looking at what's happened to a number of local business interest rates over last 12 months.

Old_Slaphead

jon3001 wrote: »

Savings accounts are completely the wrong way for providing a retirement income though. Sure - keep some cash aside for emergencies but the rest need a different strategy.



E.g.:

• Invest in income producing assets (dividend yielding shares, bonds, property) to provide a diversified and more stable income.
• Buy an annuity

Average bond fund has gained jus 12% over 5 years, share values (presuming high yielding ones too) down 25% over past 12 years, property is highly illiquid - not sure your suggestions are 'no brainer strategy' for someone trying to provide for retirement.
Maybe the 2 former will generate income but they haven't done much for capital preservation.

jon3001

Old_Slaphead wrote: »

Average bond fund has gained jus 12% over 5 years

A single 5yr snapshot isn't a lot of research data compared to the length of one's retirement. Decent funds have done okay.

E.g. Invesco Perpetual Corporate Bond Fund returned an annualised 5.1% over 5 years.
http://www.morningstar.co.uk/uk/snapshot/snapshot.aspx?lang=en-GB&id=F0GBR06HU8

Old_Slaphead wrote: »

share values (presuming high yielding ones too) down 25% over past 12 years,

I'm not sure but it sounds like you're cherry-picking the FTSE-100 high (6950, actually just over 10 years ago) and comparing it to today's close (5188)?

1. That doesn't include dividends.
2. You'd be very wrong to presume equity income fared as badly as the FTSE-100 (an index not many here recommend investing in).

E.g. the very popular Invesco Perpetual Income Fund returned an annualised 10.39% over 10 years.
http://www.morningstar.co.uk/uk/snapshot/snapshot.aspx?lang=en-GB&id=F0GBR04RX6

Old_Slaphead wrote: »

property is highly illiquid.

Are you trying to earn an income from it or sell it?! If you needed the money then that's what the emergency funds were for. You can get better liquidity in property funds and investment trusts. Granted, some have seen recent liquidity problems but I don't see how that's an issue for someone wanting to hold an income-producing asset for the long-term.

Old_Slaphead wrote: »

- not sure your suggestions are 'no brainer strategy' for someone trying to provide for retirement.

Provide what for retirement? I'm talking about building income streams. What are you trying to do?

Old_Slaphead wrote: »

Maybe the 2 former will generate income but they haven't done much for capital preservation.

No maybe about it - they will provide income. Capital fluctuations are part of investing; I'm not sure why that would be of great concern.

MarkyMarkD

Old_Slaphead wrote: »

I don't read DM so it's the former (although I don't know ratio of products so it's a fairly crude observed average).

Are you saying, against perceived wisdom that banks haven't used the credit crunch to increase their gross margins?

I'm also looking at what's happened to a number of local business interest rates over last 12 months.

Yes, I am saying that the perceived wisdom on this issue is incorrect.

It may be true - indeed, it almost doubtless IS true - that the margins on NEW lending have increased quite significantly. But new lending makes up a tiny proportion of any lender's total loan book, and the margin on their historical business has been hammered by the declines in BBR and LIBOR, and not balanced by similar reductions in the cost of retail and wholesale funding.

So, overall banking (and even more true for building societies) margins have worsened, not improved.

C_Mababejive

I would support the save our savers campaign.

We are in a situation whereby institutions seem to think its ok to pay a pittance in interest and yet at the same time,they would like to loan it out at much much higher rates. The best loan in the land at the moment is about 7.6% apr from nationwide (existing customers only).

The disparity between savings rates and loans rates is way too wide so it is no wonder that savers feel ripped off.

Let us also take a look at ISAs.

Institutions know that received wisdom is that you cant go wrong in an ISA,,tax free interest and all that. Surely a sure fire winner and yet many providers are paying less in real terms for ISAs than they are paying for instant access accounts!

Also ,they seek to lock us into pitiful longer term bonds and falsely represent new accounts by sneakily including a bonus rate in the account.

The truth is that savers own that pot of money. Sooner or later,institutions will have to compete for it.
I would urge all savers not to get involved in pitiful isas and longer term bonds.

Interest rates must rise soon. We have the power if only we can seize it.

The system is presently using your money to prop up and reward crooks and the profligate. Whilst you have been denying yourself and saving,others have been having a fine old party but they want you to pay for it so that they can go on partying.

As for rates of inflation..well..will we ever know the real truth as to what the rate is or will they continue to cook the books as they did with their laughable announcement about GB exiting recession last month!!