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pay off debts, rather than save
lemonjelly
Posts: 8,014 Forumite
http://www.bbc.co.uk/news/business-11418652
In a way, suprised this is news tbh.
Savings rates are miserable, whereas charges/interest rates on borrowing have been increasing consistently.
So Joe public are busy (still) paying off whatever debts they have, rather than adding to any savings they have (or building any).
Martin has put info on the site that most savings accounts are "losing" accounts given inflation. & this is a trend which started as the crunch commenced. So, 18-24 months down the line, we're still paying off debts & not saving.
How are we all building up massive deposits whilst we wait to launch ourselves onto the unsuspecting housing market if this is the case?
& what are the wider implications? Will borrowing continue falling? Will it remain expensive?
When will banks start touting for business by offering better savings rates?
Thoughts?
In a way, suprised this is news tbh.
Savings rates are miserable, whereas charges/interest rates on borrowing have been increasing consistently.
So Joe public are busy (still) paying off whatever debts they have, rather than adding to any savings they have (or building any).
Martin has put info on the site that most savings accounts are "losing" accounts given inflation. & this is a trend which started as the crunch commenced. So, 18-24 months down the line, we're still paying off debts & not saving.
How are we all building up massive deposits whilst we wait to launch ourselves onto the unsuspecting housing market if this is the case?
& what are the wider implications? Will borrowing continue falling? Will it remain expensive?
When will banks start touting for business by offering better savings rates?
Thoughts?
It's getting harder & harder to keep the government in the manner to which they have become accustomed.
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Comments
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Well 80% of FTB's have had their deposits gifted to them by their parents over a recent period (was a news item, sorry, can't remember the actual period). So not many who have bought as FTB's have actually saved their own deposits and then gone on to buy.
Not qualified enough to comment on the rest of the post really!0 -
It is a weird sort of article. It seems there are no numbers attached to the research. And it mentions that another survey said savings had peaked in 2006 before falling(although by how much is not clear).0
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lemonjelly wrote: »How are we all building up massive deposits whilst we wait to launch ourselves onto the unsuspecting housing market if this is the case?
By not having any debt in the first place.
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The spread between Loans and Savings has never been greater.
Who actually thought that banks would continue to loan money out at 0% to 5.9% and would give interest on bank accounts of 7%+ continuously into the future.
The fact is... they have to make their spread. They are no longer allowed to gamble the money away and earn with it, so they have to return to traditional banking methods. Simple as that... they HAVE to make money to exist. if they dont get the money off you one way, they will get it off you another the next.Plan
1) Get most competitive Lifetime Mortgage (Done)
2) Make healthy savings, spend wisely (Doing)
3) Ensure healthy pension fund - (Doing)
4) Ensure house is nice, suitable, safe, and located - (Done)
5) Keep everyone happy, healthy and entertained (Done, Doing, Going to do)0 -
Not sure how this squares with the Bank of England Deputy Governor now saying we need to spend, spend, spend.
http://www.channel4.com/news/bank-of-england-savers-should-eat-into-cash0 -
Don't forget everyone waiting to buy in here has a massive deposit.Official MR B fan club,dont go............................0
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It is not the same for everybody, my ISAs are paying 3.5 - 6.5% and my NS&I is inflation+ contrasted with my mortgage of 1.45%. I paid off a chunk in 2007 when B.R was 5.75% unfortunately
'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
It is not the same for everybody, my ISAs are paying 3.5 - 6.5% and my NS&I is inflation+ contrasted with my mortgage of 1.45%. I paid off a chunk in 2007 when B.R was 5.75% unfortunately
Yeah I know. I have 1 ISA left paying 6.2% (shame there's only 3300 in it!) & I have the ILSC's too (more than I was originally aware of...!)
That said, apart from my vantage acc's, nothing is gaining any real interest, & banks are offering even worse terms to savers on an ongoing basis.
I did wonder whether or not we'd get them touting for business, but quite the opposite appears to be happening.
The way all of them are offering ISA's at 2-2.75% is more like a cartel operation than a competitive market.It's getting harder & harder to keep the government in the manner to which they have become accustomed.0 -
lemonjelly wrote: »Yeah I know. I have 1 ISA left paying 6.2% (shame there's only 3300 in it!) & I have the ILSC's too (more than I was originally aware of...!)
That said, apart from my vantage acc's, nothing is gaining any real interest, & banks are offering even worse terms to savers on an ongoing basis.
I did wonder whether or not we'd get them touting for business, but quite the opposite appears to be happening.
The way all of them are offering ISA's at 2-2.75% is more like a cartel operation than a competitive market.
That is where blue chips paying 6%+ dividends come into play.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
That is where blue chips paying 6%+ dividends come into play.
I would add LTSB paying 4% on their vantage current accounts (you can get 3), plus some into P2P lending. Although all ISA money now goes into S&S.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0
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