Political action by savers

niord

Hi all

Bit of a strange one this one, but I was wondering if anybody on this forum had ever thought about or discussed the possibility of forming some kind of union or political action group for savers? I tried to find something using the search function but couldn't. I also couldn't find anything on the internet. Its not hard to find similar things for debtors and they also have credit unions, the banks have the British Bankers Association and the Bank of England doesn't need such an entity because its accountable to nobody.

It seems to me that savers are one of the most abused groups of people in the country and have been for a good decade now. We respond by trying to get some kind of real return on our money ever more desperately but with a monetary policy totally built around the interests of debtors, inflation and currency devaluation it is now flat impossible. I'm just wondering what people think about the possibility of political action or whether people have already though about that and decided that it isn't feasible.

Such a group wouldn't even have to lobby for anything particularly big like a new monetary policy, it could just suggest that inflation linked certificates not be withdrawn and small things like that.

I'm probably missing something already in existence but just wanted to see what people's thoughts are on that.

Thanks.

ses6jwg

I am a saver but I recognise that low interest rates are beneficial to our economy at the moment.

AirlieBird

niord wrote: »

I'm probably missing something already in existence

http://www.saveoursavers.co.uk/

dunstonh

It seems to me that savers are one of the most abused groups of people in the country and have been for a good decade now.

In what way? Savers historically have had rates which are at or below the rate of inflation. Currently they are a little lower but that is not uncommon.

We respond by trying to get some kind of real return on our money

Savers have rarely been able to get real returns on their money. Hence why you have investments.

but with a monetary policy totally built around the interests of debtors, inflation and currency devaluation it is now flat impossible.

Pretty obvious to see why.

I'm just wondering what people think about the possibility of political action or whether people have already though about that and decided that it isn't feasible.

If you want to make it political then you need to come up with alternatives. Otherwise you just come across as a NIMBY.

Such a group wouldn't even have to lobby for anything particularly big like a new monetary policy, it could just suggest that inflation linked certificates not be withdrawn and small things like that.

NS&I have an annual funding limit. When the limit gets close, they withdraw the products that are drawing the money. That has always been the case. Apart from the fact they havent often got close to the annual funding limit in the middle of the year. You had 3 months to get this issue of NS&I index linked certs. So, plenty of time.

I am partly playing devils advocate with my response, as I so often do. However, you need to be aware that just saying you want something is not good enough. You need to come up with a viable alternative and need to consider the pros and cons and consequences.

opinions4u

it could just suggest that inflation linked certificates not be withdrawn and small things like that.

While in the great scheme of things this may appear to be a good idea, NS&I have a clear market advantage in their ability to offer such a product. While it can be imitated on the high street, products are invariably unprofitable for providers.

One of the impacts of a high return on offer from NS&I is that it sucks deposits away from the banks and building societies. At a time when banks and building socieities are trying to increase savings balances and reduce loan balances this creates a key strain on their balance sheets. In "normal" times, it's good old competition. In the current climate it actually increases the risks of bank failure - at a time when HM Treasury can borrow money internationally at a far lower rate than they are paying on index linked savings certificates.

In other words, a return to strong and sustainable growth in the economy would be far better for savers than, for example, another wave of financial institution failures. If low interest rates are the best way to achieve this, great.

If you want a higher return, invest.

inearlygaveup

AirlieBird wrote: »

http://www.saveoursavers.co.uk/

Good link thanks AirlieBird

le_loup

opinions4u wrote: »

While in the great scheme of things this may appear to be a good idea, NS&I have a clear market advantage in their ability to offer such a product. While it can be imitated on the high street, products are invariably unprofitable for providers.

Not sure I entirely agree.
There are now a number of providers offering index linked savings, which I assume are profitable. They are not competitive with NS&I because of tax. However, none of them make the offers in Cash ISA form which would compete and I know of no legislative aspect that prevents that. OK the annual limits are less but if they were to accept "old" money, the limit would be higher than NS&I. Indeed, they could have a lower limit of £5,340.
Clearly, commercial providers must make their turn, but the additional cost of ISA administration cannot be enough to prevent such a solution.

cloud_dog

niord wrote: »

It seems to me that savers are one of the most abused groups of people in the country and have been for a good decade now. We respond by trying to get some kind of real return on our money ever more desperately but with a monetary policy totally built around the interests of debtors, inflation and currency devaluation it is now flat impossible.

So when inflation was running at about 2% and interest rates were 5%, 6%, 7%, with excellent fixed rates available........ Shall we just ignore this.

As dunstonh comments on, rarely will savings continually beat inflation. People who only rely on savings returns are just as reckless with their future as those who put their capital on a horse at the Kempston 3:45.

Things tend to go in cycles and you need to act (financially) accordingly.

Whilst I am a debtor (mortgage) my mum is retired and living off savings etc especially with the increases in living (food) costs recently, not to mention energy.

I understand where you are comming from but it is unrealistic and blinkered view.

opinions4u

le_loup wrote: »

Not sure I entirely agree.
There are now a number of providers offering index linked savings, which I assume are profitable.

Hedging costs will almost certainly erode any profit potential.

They are not competitive with NS&I because of tax. However, none of them make the offers in Cash ISA form which would compete and I know of no legislative aspect that prevents that.

Birmingham Midshires were doing this the other day. Not sure if they still are (not got itme to check).

atush

I am a saver., but also still have a mtg and have a VERY LOW lifetime base rate tracker. I have come out pretty well overall. I miss high interest rates, but our economy needs low base rates.

GeorgeHowell

There is no point in savers considering political unionisation or action because as a group they have virtually no leverage whatsoever. All they can do is to vote with their feet and move money to the least worst options.

Without having access to statistics I would bet that savers are predominantly :- mature, indigenous, law-abiding, tax-paying, hard working, responsible and self-supporting, conservative (small c). As such they are the lowest form of life in the eyes of the establishment in this country.

All savers can do is to vote with their feet and move money to the least worst options. But I bet that many who moan about the current situation are leaving their money in low interest earning accounts for a number of dubious reasons :- misplaced loyalty to certain banks and building societies, fear of internet banking, over-preoccupation with keeping money accessible at all times, inertia -- can't be bothered to regularly check it out and make the moves.