Savers should be rewarded.

N1AK

DervProf wrote: »

There have been a few people on this forum that have shown some disrespect for those of us who have savings. They have very little sympathy for those of us who had the discipline and sense to not spend every penny we earn, and now find that the returns on our savings isn't keeping up with inflation. Unless we spend a large proportion of our income on servicing mortgage debt, we are to be dismissed as "parasites".

As a 'saver' I've never felt that I needed, nor deserved, rewarding for it. Frankly, I'd settle for not being penalised for it.

When government policy actively discourages savings, as it does with Job Seekers allowance and housing benefit, it is both unfair to those who save and a reason for others not to bother.

My reward for saving is that I have, excluding a student loan and a house I am now buying on a 60% mortgage, never had to take on debt. Being able to buy cars outright, furniture and appliances outright, pay car insurance annually etc all cost considerably less than 'credit'.

Savings rates at the moment aren't very good. I don't think it is the governments fault or responsibility to fix this. Bank interest rates aren't forced to follow the BoE rate, there is enough competition in the market that if savings were worth offering a better rate for they would be.

The market is clearly showing that if you want to get a decent return on savings then you need to lock in for a fixed period, or consider other options like shares or sites like zopa where risk is higher.

In the meanwhile, feel free to use the fact you are an ideal customer to get a little more for your money.

N1AK

whatyadoinsucka wrote: »

on the whole anyone who is on a very low base rate, is likely to be cash rich and imho damn stupid if they are not lowering their mortgage balance for the bad times ahead..

If you're cash rich you can pay off the balance of the mortgage if/when rates make it financially beneficial to do so. If you had £50k in savings and a £50k balance on your mortgage at say 0.5% (tracker from before the IR crash), you'd be £1000 a year better off if you could earn 2% on the savings.

The old expression about it taking money to make money is still often true today.

jamesd

whatyadoinsucka wrote: »

why would i want savings when pretty much i'm doubling my money for every extra pound i overpay on my mortgage.

Oh dear. You got that one wrong.

whatyadoinsucka wrote: »

my mortgage paperwork clearly states for each £1 borrowed i will repay £1.82 over the mortgage term.

whatyadoinsucka wrote: »

I got a mortgage 2 years ago and we have managed to get it down 15-20% do

whatyadoinsucka wrote: »

come later this year I will be investing in the stock markets (60% into trackers / unit trusts etc & a few FTSE 100s and 40% into Emerging Markets)

So you've overpaid 10-15% on your mortgage and in the process have missed having your money invested in what may well be the best boom stock market you'll see in your whole life, which started... two years ago, just when you got that mortgage.

It's been one of the worst periods in history for overpaying on a mortgage instead of investing. Huge losses for anyone who took the overpaying route, compared to what they would have had if they had invested instead.