Savers urge rate rise

Graham_Devon

Don't shoot the messenger. I don't personally actually agree entirely with save our savers. Just putting it up for discussion.

The value of UK savings has been eroded by £50bn in the past year because of inflation and low interest rates, a campaign group has said.

The Save Our Savers group has written to each member of the Bank of England's rate-setting committee urging them to raise the Bank rate to help pensioners and encourage saving.

The Monetary Policy Committee is set to freeze the rate at 0.5% later.

Mortgage borrowers have benefited from rates remaining at the record low.

'Permanent' impact In a plea to all nine members of the MPC, Save Our Savers says that "a country without savings is a country without a future".

It warns that those on fixed incomes, such as pensioners, are suffering terribly from the combination of extremely low interest rates and above target inflation.

"For many this is not a temporary setback. Its effect will permanently reduce the value of their future income," the letter says.

http://www.bbc.co.uk/news/business-14060683

The permanent impact, however, is a notable point. Works both ways. For those able to overpay mortgages it has a permanent impact. For those losing interest on their retirement funds, it has a permanent (and I'd suggest harsher) impact.

News articles like this, however, especially the prominence given by the BBC, won't do the BOE any favours.

wotsthat

It's not a human right that savers should get a risk free return above inflation.

Graham_Devon

wotsthat wrote: »

It's not a human right that savers should get a risk free return above inflation.

Blimey.

From putting an article up for discussion, whereby save our savers discuss the ongoing and future issues surrounding low interest rates, to "not a human right, wahhh" in just one post.

No one even implied it was a human right.

Batchy

I love it if they raised saving rates for a year... would suit me down to the ground!

As long as they brought them back down again by Aug 2012

DervProf

wotsthat wrote: »

It's not a human right that savers should get a risk free return above inflation.

Likewise, it is not a human right that a borrower should be offered lower interest rates when the brown stuff hits the fan.

On a more constructive note, it is claimed that lower interest rates help the economy. I'm not so sure. Lower interest rates do not exactly discourage inflation. During times of higher inflation (and lower wage growth), people are more likely to cut back on spending, which doesn't help the economy. Savers, or people with savings, are hardly likely to go on a spending spree if their savings are not getting a decent return, as they are also affected by rising prices.

doire_2

Just who do these damn savers think they are! Imagine the bare-faced cheek of them!

RenovationMan

Low rates are great. I'm currently paying less mortgage for a 5 bed farmhouse with an attached 1 bed apartment than I paid in rent for a 1 bed apartment when I first started work.

Lets the good times continue to roll!!

wherediditallgothen

In other news. Alcoholics vote for lower duty on the old falling over water.

wotsthat

RenovationMan wrote: »

Low rates are great. I'm currently paying less mortgage for a 5 bed farmhouse with an attached 1 bed apartment than I paid in rent for a 1 bed apartment when I first started work.

Lets the good times continue to roll!!

Yes but what about those fluffy haired pensioners (in situations like this a pensioner has to be used as an example - it's the law).

RenovationMan

wotsthat wrote: »

Yes but what about those fluffy haired pensioners (in situations like this a pensioner has to be used as an example - it's the law).

Yes, will no one think of the [STRIKE]children[/STRIKE] old folk!

Radiantsoul

DervProf wrote: »

On a more constructive note, it is claimed that lower interest rates help the economy.

I am not sure that anyone sensible is claiming that. Interest rates are the cost of money and so lower interest rates will tend to bring forwards consumption and investment. They also lower a countries exchange rate and so will reduce a countries real income, whilst reducing the cost of a countries exports.