Are savers being short changed?

rayj_2

lisyloo wrote: »

I don't think that's right.
What got us into this mess is spending money we DIDN'T have.
That's different to spending your savings.
Yes I agree the government would rather we spent and put money in to the economy than saved, but there are a small minority of people that have no other investment options apart from saving.
I'm moving money from cash to stocks & shares and getting about 10% return rather than 3%.
Most people could invest (I accept that the very elderly may not be able to take a "long term" view).

So I'm afraid I have little sympathy for savers who aern't in their 80s or 90s.

What's the issue with putting your money somewhere else?

For most people who have given up working (retired/early retirement) the problem is that the money they have saved to keep them going up to death is about worthless in the building society. The returns are pitiful, remember that most of these people will have paid high interest rates on their mortgages and found they did not have spare cash to spend up the high street.
Now when they want a good return without tieing their investment up for several years they find that they have been forgotten. It must make them feel as if they are being used to subsidise cheap mortgages.

Linton

rayj wrote: »

For most people who have given up working (retired/early retirement) the problem is that the money they have saved to keep them going up to death is about worthless in the building society. The returns are pitiful, remember that most of these people will have paid high interest rates on their mortgages and found they did not have spare cash to spend up the high street.
Now when they want a good return without tieing their investment up for several years they find that they have been forgotten. It must make them feel as if they are being used to subsidise cheap mortgages.

If this is a pot of money to last perhaps 20-30 years why cant 15 years worth of it be put in a long term savings account paying around 4%??

But as lisyloo has pointed out it could be more profitably put into investments - say 10 years worth put into a mixture of cautious and adventurous funds could easily return 5-10% tax free.

lisyloo

For most people who have given up working (retired/early retirement) the problem is that the money they have saved to keep them going up to death is about worthless in the building society.

That's why I'm saying they should being constantly looking elsewhere for deals.
Do you not think that NSI (safe, tax free and accessible at any time) is a good option with current returns (now 5.35%)???
I think this ticks most the boxes (apart from very short term requirements < 12 months).

remember that most of these people will have paid high interest rates on their mortgages

And have had very low house price and good returns on their pension funds.
Let's bring in all the factors eh? not just one side of the story.
I'm 42 and I have no hope of retiring early like people have done in recent history.
For people younger than me it's even worse. They face debts from university before they start and an increasing retirement age.

Now when they want a good return without tieing their investment up for several years they find that they have been forgotten.

Yes, savers are not the priority right now.
We want them to spend and support jobs in the economy.

It must make them feel as if they are being used to subsidise cheap mortgages.

Do you really think that FTBs with massive house prices and huge student debts are being subsidised.
I'm in the middle, so I'm neither old nor young, so I have no axe to grind, but I think the oldies have had a MUCH better deal than young people now. There is no way that anyone my age or below can even think about retiring early. My retirement age is 67 already.

I'm happy to agree to disagree but I haven't seen anything here to change my mind that savers are generally a bunch of whingers who can't be bothered to look for better opportunities (and there have been some).

ESKIMO

YES is my 'simple' answer.

lisyloo

YES is my 'simple' answer.

"Don't save then" is my "simple" answer.

The more complex answer is consider other options (including safe, tax free ones like NSI) for SOME of your portfolio and consider altering (bringing forward) any purchasing decisions.
I accept there are some people with NO options, but I believe most people have options and could manage their money better.

There is a company called ZOPA where you can lend money to others.
I believe you can select your level of risk (although I don't know the parameters).
This is another option.

cloud_dog

I think all lisyloo's posts have abeen reasonable and appropriate.

To answer the OPs question.... Possibly, yes but cirmcumstnaces dictate the structure we have to have in place atm.

We had this discussion about savers earlier in the year (can't find it atm). The bottom line is that a couple / few years ago savers we're getting the benefit of finacial institutions chasing the money; and for savers 'it was good'.

But, if you go back prior to this time the the savings / lending ratio (gap) was different but a few recent years of 'good times' always clouds peoples memories.

ESKIMO

It's rediculous as it only factors in the advertised 'hook' of say 5%AER - which if you read the small-print disclaims that the 5% is only applicable to say the first £1000 or £2500, whilst making standing order deposits of say a minimum of £50 to a max of £250 per month. You could put in as much as you want for as long as you want. You are only getting a return on the 'said' amount.

Savers are totally short-changed. The difference between 'actual' interest payments and what the banks charge on interest loan repayments is unpalpable.

They continue to get away with it scott-free all the time. Enough is enough.

diable

Are the graphs the right way up?

ESKIMO

cloud_dog wrote: »

I think all lisyloo's posts have abeen reasonable and appropriate.

To answer the OPs question.... Possibly, yes but cirmcumstnaces dictate the structure we have to have in place atm..

Yes, certainly out of our 'control'. - Not that we ever really 'had it' in the first place.

cloud_dog wrote: »

But, if you go back prior to this time the the savings / lending ratio (gap) was different but a few recent years of 'good times' always clouds peoples memories.

Savers had it 'good' as did borrowers. Remember literally FREE money. I'm sure you can all remember being canvased to sign-up to new credit/store cards left right and centre. "Don't worry Sir/Madam, its a 0% interest rate on balance transfers, blah, blah, blah."

Borrowers are subjected to the same torture of 'false advertising' - misleading and tantamount to misrepresentation.

Banks are NOT Casinos!

lisyloo

But, if you go back prior to this time the the savings / lending ratio (gap) was different but a few recent years of 'good times' always clouds peoples memories.

Totally agree that you have to go back to "normal" times to look at margine over base rate.
Not the excess of the loose lending period. It would not be a fair comparison to look at the period "that got us into this mess".

I'm stoozing and making money, so I think some people are blaming circumstances because of their own failures to make the best of the opportunities available.
I've got debt linked to BOE rates and savings (NSI) linked to RPI and it's working out well.