The moral hazard of being kind to the indebted

DervProf

StevieJ wrote: »

I have received 6.2% tax free over the last year (obviously not guaranteed for the next year) from NS&I RPI linked (readily accessable), unfortunately not for you, now withdrawn In addition my ISA was filled this year with a 5 year fix (5%) from the Coventry with 120 days penalty for earlier closure (pretty good if you can survive the first few months) sadly again withdrawn You need to keep your eyes open

TBF, neither of those investment products quite match GD's criteria of a low risk 5% return with quick access to his money. Good investments (NS&I, in hindsight) yes, but both have strings attached.

PaulF81

Plus Julie has completely ignored my very valid point ref means tested benefits.

StevieJ

Oh BTW I paid most of my mortgage off in 2007 when mortgage rate was 6.5%, seemed sensible at the time, not so now when it is 1.45% I am on one of those mortgages where I can borrow it back but I couldn't be bothered, has anyone on the board actually borrowed the money back after paying off? I wonder if they would put obstacles in your way.

StevieJ

DervProf wrote: »

TBF, neither of those investment products quite match GD's criteria of a low risk 5% return with quick access to his money. Good investments (NS&I, in hindsight) yes, but both have strings attached.

No strings for me (onNS&I), I am past the initial investment period so funds are totally liquid, but yes I hear what you are saying.

StevieJ

Graham_Devon wrote: »

I.e. those 2 above aint going to work for long. Most people would be able to pay more of their mortgage off in a year than they would be able to invest, in terms of caps.
In addition, with the index linked certificates, if you take any money out before maturity, I don't believe you get anything. Whereas compound interest works on the mortgage for each and every month.

That is incorrect, providing you hold for 12 months you receive index linking plus a named %. BTW I would be impressed if they were paying off £35k a year (£15k+£15k+£5.35k Isa limit). Having said that it is immaterial at the moment as the NS&I have been withdrawn for the time being

Graham_Devon

StevieJ wrote: »

No strings for me (onNS&I), I am past the initial investment period so funds are totally liquid, but yes I hear what you are saying.

To be honest, the index linked certs are a bigger gamble than I was expecting Julie to come back with.

They are based on a moving target, inflation. Great over the past 2 years. But going forward from today, would you suggest this would be a wise way of getting a 5% return instead of paying your mortgage down!?

Could go either way. So it's exactly that. A gamble. Where as paying off the mortgage is a one way bet. That amount is paid off. There is no gambling on how much you may have gained. If you pay off a grand, a grand is paid off.

I was looking more for an investment open today. Not investments that are no longer available, and also based on past performance over a very small timeframe.

StevieJ

Graham_Devon wrote: »

To be honest, the index linked certs are a bigger gamble than I was expecting Julie to come back with.

They are based on a moving target, inflation. Great over the past 2 years. But going forward from today, would you suggest this would be a wise way of getting a 5% return instead of paying your mortgage down!?
.

Then again I only have to beat 1.45% (at the momment) would you say it was a big gamble for me? I suppose it is horses for courses

Graham_Devon

StevieJ wrote: »

That is incorrect, providing you hold for 12 months you receive index linking plus a named %. BTW I would be impressed if they were paying off £35k a year (£15k+£15k+£5.35k Isa limit). Having said that it is immaterial at the moment as the NS&I have been withdrawn for the time being

I didn't suggest they were paying off 35k a year. Rather that many people could, especially those outside of their initial mortgage deal. Like myself. No cap on how much I can pay off. No charges.

So with NSandI, I would only invest 35k, based on past products that are no longer available. However, with the mortgage, I don't have that cap. I can pay as much as I like....and therefore, if I can pay more than the cap on the NSandI product that doesnt exist, I would fair better in monetry terms.

I'm just quizzing Julie really, as shes come across as telling everyone else she knows better, and there is no other alternative to strategy, yet none of us know, or can state, any product which will allow us to do what Julie is telling us to do.

Graham_Devon

StevieJ wrote: »

Then again I only have to beat 1.45% (at the momment) would you say it was a big gamble for me? I suppose it is horses for courses

Certainly not.

But that goes back to my point that everyone is different. And different things work for different people.

There is no one way that is best. Unlike what we were being told. And we weren't just eing told the best way. We were being told we were financially illiterate if we didn't choose Julies way.

silvercar

StevieJ wrote: »

Oh BTW I paid most of my mortgage off in 2007 when mortgage rate was 6.5%, seemed sensible at the time, not so now when it is 1.45% I am on one of those mortgages where I can borrow it back but I couldn't be bothered, has anyone on the board actually borrowed the money back after paying off? I wonder if they would put obstacles in your way.

Yes. No obstacles, no conversation. Online transfer from offset savings pot to current account with different bank (took 2 days) and then outwards from there.