Letters to Liz - Telegraph

Innys

Guys

Have you read the following article?

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/08/cmlets08.xml

I'm specifically referring to the last letter she responds to - about regular saver accounts

Her penultimate paragraph is disappointing in that it fails to understand that you can invest your money somewhere else before transferring it to a RS.

It's all the more alarming as her readers will be relying on her for advice. :eek: I know I won't be making that mistake in the future! :rotfl:

aleph_0

Oh dear, you would have hoped that she would have better understanding than that and realise you would be drip-feeding, or at least see the benefit for someone who is saving that money from their monthly income.

dunstonh

I think she makes some valid points.

When you actually look at the limits and the fact its just one year and the amount of work you have to do to get one and then the number of T&Cs they can use to throw you out, is it really worth it.

You have to cost the time that is required for these things to be put in place and a £50 gain over a year isnt going to be worth it for a lot of people.

As I read it, she isnt saying dont do it. She is just pointing out that they are financially not as good as the headline rate often suggests and that she wouldnt bother. In her case, and one suspects a good number of the Telegraph readers, would find the amount of work for just £50 a year just isnt worth it.

Innys

aleph _ 0, quite.

This is what I said in the e-mail I sent to her (after I explained where she had gone wrong):

"It is disappointing that you do not appreciate the fundamentals of these products especially as your readers will, no doubt, be placing reliance on your advice."

I doubt she'll bother to respond but I won't be taking her advice in future either.

Innys

Dunstonh

I don't disagree that they are a lot of work.

What I do have an issue with is the fact that she has got her sums wrong and implied that you will only get an extra £50 by taking one out.

Given she has implied she is some kind of money expert, one would hope she get her facts right. Let's face it, the error is pretty elementary.

If one accepts she has made an error (and presumably the article went through some kind of checking before it was posted), it doesn't inspire a great deal of confidence, does it?

RayWolfe

dunstonh wrote:

In her case, and one suspects a good number of the Telegraph readers, would find the amount of work for just £50 a year just isnt worth it.

True, Telegraph readers put their money in The Funds in 1892. It was good enough then so they see no reason to change.
You’re wrong about the £50 though, they still work in guineas. :rotfl:

Secret_Wookie

Innys wrote:

Guys

Have you read the following article?

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/08/cmlets08.xml

I'm specifically referring to the last letter she responds to - about regular saver accounts

Her penultimate paragraph is disappointing in that it fails to understand that you can invest your money somewhere else before transferring it to a RS.

It's all the more alarming as her readers will be relying on her for advice. :eek: I know I won't be making that mistake in the future! :rotfl:

Can't say i've expected a journalist to give accurate or correct advice. They find it much more fun to right stories putting things in a negative light.

It certainly wouldn't fit with the current trend of bank bashing to right a story stating that you could benefit from the high rates offered by Regular Savers. Yes, they are complicated and you need to work out how they work, but would we rather the banks didn't offer them? That seems to be what many of the journalists would rather suggest.

She clearly didn't understand how to take advantage, stating that she would rather put her 3k in a lump sum deposit. You can of course cycle your 3 grand lump sum deposit held in a savings account through the regular saver and earn even more as all the money saving experts know.

She also fails to mention that for many people its the discipline of not being able to touch the money that makes the accounts attractive or that many people may not have 3k already.

For people savings smaller amounts, such as £50 per month, they may well be more attracted by the fact that they will make themselves save up a lump sum of £600 plus a bit of interest. They like the discipline and the high rate is the added bonus to encourage them.

A journalist could easily right a story praising the banks for helping to encourage more people to get into the savings habit and all the benefits to
the economy and society that it brings.

Obviously thats not going to happen, they clearly believe that their readers are for more interested in bad news rather than a balanced and informed view.

Thats why the Money Saving expert forums are so good, for me they provide a more balanced view looking for the positive ways of taking advantage of offers first, then crticising any bad points 2nd. The journalists are so busy looking for the bad news in everything that they miss out important facts that can actually be of benefit to their readers.

aleph_0

dunstonh wrote:

I think she makes some valid points.
[snip]
In her case, and one suspects a good number of the Telegraph readers, would find the amount of work for just £50 a year just isnt worth it.

Certainly agree on the above, especially given the readership, but for someone who is saving £x per month out of their wages, these accounts offer a very good deal. Also, an account such as Yorkshire BS's one, allows you to build up a large amount in the account quite quickly (OK, it is a lower rate), and so for the long term it may be worthwhile (obviously we can't say if Yorkshire BS will soon remove the account/add terms to avoid this! :P).

Secret_Wookie wrote:

They find it much more fun to right stories putting things in a negative light.
[snip]
It certainly wouldn't fit with the current trend of bank bashing to right a story stating that you could benefit from the high rates offered by Regular Savers.
[snip]
A journalist could easily right a story praising the banks for helping to encourage more people to get into the savings habit and all the benefits to
the economy and society that it brings.

I hope you don't consider me too much of a pedant, but I thought I should write to you pointing out the right choice of write! Otherwise, I do agree with quite a lot of the points you have made.

(Now to weight [sic] for someone to give me a list of errors in my above post! :P)

Chrismaths

Nice name aleph - the smallest and only countable infinity! Very erudite.

Secret_Wookie

Sorry wrote that in a bit of a hurry in between some other tasks. Clearly this is why i'm not a journalist.:o

dunstonh

I just put the figures through a calculator.

£250pm for 12 months at 12% = £3192 at the end.
£250pm for 12 months at 5% = £3081 at the end

Of course, you can play with the figures a bit to give different scenarios. For example, £250pm into an ISA at 5%= £3081 but a regular saver at 12% with tax deducted = £3,154. A higher rate taxpayer would be looking at an equivalent of £3,116.

If you think of these short term offers as being only short term and you dont use the ISA allowance, then once these regular savings options are gone, you could end up worse off than had you used your ISA allowance each year instead.

It really depends on how much you want to save. How much you have overall and if you use the ISA and what your tax status is.