Why ISAs and saving just serve to penalise us all

qpop

DemiDee wrote: »

I presume that the kind of advice I spoke of above up to YOUR standards then, Credit Crunched? Or is it that when something's free, it's OK to be misleading or simply terrible? Also, I'm not sure why you feel that the person I saw was a volunteer. Many CAB staff are currently paid - up to 7000 staff across the country, if I'm correct.

Clearly, my ramblings above left you confused as to the intention of my post. I wasn't disputing the fact that 20% for doing nothing feels satisfying, but rather warning that if you fall on hard times and you save savings, they aren't going to last very long, and you'll be penalised for having saved at all. Better to spend it as you're paid IMHO.

As I read it, you're complaining that due to having made sensible provisions in case of an emergency, you now find yourself in an emergency situation, and are unhappy at having to spend these provisions?

Has it struck you that your quality of life will be far better whilst using these savings, and that the baseline level of state support will kick in if/when those savings are diminished? Are you aware of how the welfare state is designed to work? (like this).

As for the CAB, it sounds like a mistake made by (probably) a volunteer has rubbed you up the wrong way, and not helped what already sounds like a stressful situation. To then claim that the whole service is a sham is a complete failure of logic.

Please take the inane ranting elsewhere and take a breather, then perhaps return to discuss your options / debate the pros and cons of savings and investments.

DemiDee

evenasus wrote: »

Well, even with interest rates at an all time low, last year I received over £11K net interest from ISAs & savings accounts.

Are you saying I should forego this interest?
And if so, what else should I do with my savings?

I would say that you've done pretty well, Evanasus, but your situation is likely to be very exceptional, especially in this climate. With the savings you are likely to have in order to guarantee this kind of interest, it's likely that if you stumbled on hard times, they'd last a considerable length of time. Alas, for many, the situation is very different. Once out of work, savings do not last as long as you might think. And they are even less likely to last should you need long term medical attention or care.

MrMalkin

The point of saving is to give yourself something to fall back on when times are hard. Now you're complaining that you're having to fall back on your savings when times are hard?

Plenty of people would dearly love to be in a position where they were ineligible for benefits due to having their own savings instead. Why do you think you deserve to be treated differently?

Derivative

DemiDee wrote: »

Once out of work, savings do not last as long as you might think.

Unless you are bad at budgeting, this is quite frankly just simply not true.

It's not hard to figure out how much you spend.

If you know you have expenditure of £15k annually, then you know £15k in savings will give you (slightly less than) a year.

All you are saying is that if you don't save, your savings won't last very long when you call upon them. Pretty obvious, no?

The penalties for saving hit you hardest if you only save about £16k. Then you get no benefits, and not much income from savings/investments either. What that should be telling you is that you need to save a lot harder.

margaretclare

When we have savings or ISAs, we are effectively telling the government how much we have, which means that over a certain amount we...

..don't get Jobseeker's allowance if we find ourselves out of work

Not true. Contribution-based JSA lasts for 6 months, during which time it is assumed you'd have looked for, and found, another job.

If you 'get sick' you don't need a care home. You need a hospital. The last time I looked, excellent free care was still available on the NHS. Both I and OH have benefited hugely from state-of-the-art, highly technical and competent NHS treatment and care in the recent past.

DemiDee

MrMalkin wrote: »

Plenty of people would dearly love to be in a position where they were ineligible for benefits due to having their own savings instead. Why do you think you deserve to be treated differently?

I do not think that I (or indeed anyone else in the same predicament) should be treated differently at all. In fact, that is the whole point I'm trying to make. How is it that those who earn and then instantly splash out on new cars, kitchens, homeware and holidays rather than saving are entitled to get benefits when falling on hard times, whilst those who have saved and made sacrifices are not entitled to the same? Surely better to spend as you earn.

opinions4u

Do you want to save and provide for yourself?

Or sponge?

MrMalkin

DemiDee wrote: »

I do not think that I (or indeed anyone else in the same predicament) should be treated differently at all. In fact, that is the whole point I'm trying to make. How is it that those who earn and then instantly splash out on new cars, kitchens, homeware and holidays rather than saving are entitled to get benefits when falling on hard times, whilst those who have saved and made sacrifices are not entitled to the same? Surely better to spend as you earn.

You have absolutely no idea whether those things were bought with savings, benefits, or on credit. People who have spent their money in that way have paid with more than just money anyway, they've paid with the the safety and the options in life that a savings buffer gives you - to a large extent they no longer have such protection.

I think you'd be much happier in life if you stopped getting jealous that you can't keep up with the Joneses. Time and time again you'll find that people who are that materialistic are basically mortgaging their future. The long term downsides of failing to save and invest for your future are much, much bigger than the short term gains from receiving benefits.

Derivative

MrMalkin wrote: »

The long term downsides of failing to save and invest for your future are much, much bigger than the short term gains from receiving benefits.

Indeed.

It looks unfair, and in a sense, it is unfair.

But it's like bemoaning that people recieve disability benefits. You're in a better position by virtue of not being disabled, even if you do get less money.

If you're one of the rare breed of people that has the sense to invest for their future then I think that's something to be happy about in itself.

Some of the posters in this thread can look at their accounts, see six figure sums and know that they are set for at least a decade in the event of unemployment or other emergency. With no need to sign on, no worrying whether or not the laws might change, no having to justify your position to some public sector jobbie.

That's better than any Government handout.

MrMalkin

Derivative wrote: »

But it's like bemoaning that people recieve disability benefits. You're in a better position by virtue of not being disabled, even if you do get less money

...

That's better than any Government handout.

Exactly. True financial independence, although hard to achieve, means you're not beholden to anybody - not the government, not your employer, nobody. That's worth far more than any amount of benefits, as is the kind of self-discipline you need to achieve it.