Political action by savers

Ark_Welder

le_loup wrote: »

However, none of them make the offers in Cash ISA form which would compete and I know of no legislative aspect that prevents that.

The YBS index-linked product can be held either inside or outside an ISA, but is only open until 15th September. Whether or not an investor would want to hold it is a different matter. KRBS have also provided index-linked cash ISAs, but the last issue closed about a month ago.

le_loup

opinions4u wrote: »

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

Ark_Welder wrote: »

The YBS index-linked product can be held either inside or outside an ISA, but is only open until 15th September. Whether or not an investor would want to hold it is a different matter. KRBS have also provided index-linked cash ISAs, but the last issue closed about a month ago.

Wow!
I got this spectacularly wrong then.

MarkyMarkD

The point about NS&I having an unfair advantage is still valid.

The effective cost to the taxpayer of many of the NS&I products is way over the top. For example, index-linked bonds held by higher rate taxpayers cost the taxpayer the equivalent of the inflation-rate, plus the premium, all grossed up by the tax rate - so that's around 9% or so!

Taxpayers who have already used up their full ISA allowances cannot invest tax free with another provider - but they can with NS&I. That's unfair.

dtsazza

GeorgeHowell wrote: »

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.

That's an interesting point - what constitutes leverage?

Why are savers any different to, say, transport workers (as in the RMT union)? Both provide something which is arguably essential to how the economy runs at the moment, yet could be performed by just about anyone willing. Both, it could be argued, ought to vote with their feet and move to the least worst option if they don't like the one they have now.

What's the underlying difference?

thor

cloud_dog wrote: »

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.

OR people investing in stocks and shares.

fairleads

niord wrote: »

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.

Go on strike, but instead of withdrawing our labour rather combine as a group and pledge that we all withdraw 10% of our savings each month from the Banks and BS's until they give us a decent return. For starters we could concentrate on those institutions that pay employees obscene bonuses while still supported by the tax payer. Highly impractical - maybe, controversial -definitely, but an option nevertheless.

jimjames

thor wrote: »

OR people investing in stocks and shares.

Why? Could you explain further?

jon3001

fairleads wrote: »

For starters we could concentrate on those institutions that pay employees obscene bonuses while still supported by the tax payer. Highly impractical - maybe, controversial -definitely, but an option nevertheless.

Do they need savers' money?

Weren't they recapitalized courtsesy of the tax payer after printing new money?

opinions4u

jon3001 wrote: »

Do they need savers' money?

Yes. Otherwise their balance sheets won't balance and they'd be insolvent.

Weren't they recapitalized courtsesy of the tax payer after printing new money?

In two ways.

1. Share capital which provides them with a cushion against bad debt (note that the existing shareholders lost 90%+ of their value, so have paid big time for the poor performance).

2. The Special Liquidity Fund which replaced wholesale funding which disappeared when the Credit Crunch hit. The banks have to repay this by 2012. The easiest way to repay it is not to lend it out.

GeorgeHowell

dtsazza wrote: »

That's an interesting point - what constitutes leverage?

Why are savers any different to, say, transport workers (as in the RMT union)? Both provide something which is arguably essential to how the economy runs at the moment, yet could be performed by just about anyone willing. Both, it could be argued, ought to vote with their feet and move to the least worst option if they don't like the one they have now.

What's the underlying difference?

The problem for savers is that even the least worst option is a poor option. But as some have indicated the leverage, in theory, is to withdraw savings altogether from the organisations that are paying such poor rates (ie all of them). But where would this leave savers ? Firstly they would have a stack of money to safeguard, presumably in the form of cash. But the shoebox under the floorboards is definitely not a good idea. Secondly the additional financial pressure put on the banks by large withdrawal of domestic savings funds would make them even less likely to pay decent rates, and they would just loan out even less, causing more of a squeeze on the economy to everybody's disadvantage.

This is not all about the banks anyway. It is clearly unstated government policy to try to inflate its way out of its debt to an extent with very low interest rates and relatively high inflation. It (especially the Lib Dem contingent) also rather likes the redistributionary effect from the "haves" (ie savers) to the "have nots" (ie everyone else) which it thinks might be politically advantageous at the next election. But I suspect that all three parties would broadly follow this policy, so I don't think savers even have any meaningful leverage at the ballot box in respect of the negative real returns they are suffering.