Preparedness for when

nuatha

Frugalsod wrote: »

In many ways I think you have found a perfect solution to the banking crisis. If premium bonds were ever to be defaulted on then the public would be up in arms. Maybe not so for a banking collapse. I suspect that the banks would bail in the customers but could the government bail in premium bond holders?

moneyistooshorttomention wrote: »

A question I've been wanting an answer to for some time...so I do wonder if anyone knows ...

Short answer, Yes the government could default (bail in) on premium bonds.

Longer answer, if a credible rumour of an intent to do this surfaced, then government debt would escalate rapidly, as the borrowing rate would go through the roof. Forget how bad the Greek situation was, think Argentina 2001 or worse. So default on bonds is unlikely.

Frugalsod

nuatha wrote: »

Short answer, Yes the government could default (bail in) on premium bonds.

Longer answer, if a credible rumour of an intent to do this surfaced, then government debt would escalate rapidly, as the borrowing rate would go through the roof. Forget how bad the Greek situation was, think Argentina 2001 or worse. So default on bonds is unlikely.

They are not in the same position as Argentina but if the government tried to bail out the banks again then it would be another matter altogether. It would appear that no one in power has learned anything from recent crises as we keep repeating the same mistakes.

Overall debt needs to be either defaulted on or paid down. There is simply far too much debt about and that is why we have such limp expansion from huge sums of new credit. This is the core of most countries problems right now and because our leaders are corrupt and are failing to let banks collapse as a consequence of their mistakes then we are left with all this excess debt which can only hold us back.

fuddle

Ergh. It all makes depressing reading. If there is no crash I guess we bumble along but that in itself worries me because bumbling along by means of buying into our economy means years and years of 'this mess' while never learning true consequences and, in my experience, without a bang there can never be progress from wrong doing.

Yip, ergh. I see no way out of this and almost wish for a bang to clear the air. Is that wrong and foolish?

lillibet_dripping

2.20 a.m. :eek::eek::eek:
Fudds, are you OK petal?

GreyQueen

thriftwizard wrote: »

What about those who are not "eligible" for bank accounts? I've seen people I know, who do have regular wages coming in, being turned down because of long-ago errors or wayward ex-es causing CCJs. Even people whose address doesn't yet appear on computers, because of having been built within the last year. How are people in that position to survive without some kind of cash?

Developers of new builds/ new conversions register the address with the local authority address referencing officer. I take some of those calls and pass them across to ours, postcodes are issued, address is added to local authority maps and systems, the address is set up for refuse & recycling collections, council tax account etc etc. It's a fast process, certainly doesn't take a year, more like a couple of weeks. Most developers will register before the properties are even sold.

Individuals are now responsible for registering themselves for the electoral roll, and it is that source which is used by financial organisations to check that you live where you say you live. The electoral roll is published a few times a year, so you can have a lag between your registration as a voter and the next published, searchable version of the roll, shouldn't be more than about 3 months in most cases.

Sometimes, the developers deliberately neglect to do this and the LA finds out accidentally, sometimes years after the event, that they have a new household in their area. Householders who have deliberately not made contact with the LA to pay council tax, sometimes for 5 + years. They get short shrift (and a liability order) when we do catch up with them.

Dep of Cap is a difficult one. A pal of mine on IS etc had a small inheritance on death of a parent (a few thou) and used some of it to replace their washer, which had been broken beyond repair for several months, and a dead vacuum cleaner. This was acceptable once receipts were seen.

What's unlikely to be acceptable is someone on income support and full HB & CTB inherting or winning several tens of thousands of pounds, coming off benefit, and trying to get back on it 6 months later whilst insisting that it's all spent but being unable to account for what it was spent on. And by account, not even a verbal explanation, never mind proving it.

If you do find yourself in this position, it would be best to think carefully about what you'll spend the money on. Replacement of essential household goods which were worn-out anyway would likely be acceptable, as would paying off officially-documented debts. It would be prudent to keep receipts/ proofs of payments made, in case called to account for where your capital went.

What does look fishy is large cash gifts to close relatives and paying off big debts for which there is no official record (because everyone owes £10k to a bloke dahn the pub, innit), replacing every single stick of furniture, floorcovering and every applicance simultaneously.

moneyistooshorttomention

Frugalsod wrote: »

In theory they could but that would require the government to default generally and that would create far greater problems. In a world of negative interest rates what would they pay out? Though in general government National Savings bonds are probably the safest option for most of us. They would not necessarily be at risk like a bank deposit and would be a safer place to keep any wealth even up to the limits of the products, which is still more than most peoples savings anyway, and far safer than deposits in a big bank.

Though reading your comment has reminded me that didn't our Government "do the dirty" on its own citizens in relation to some Bonds or other before??? I've got something tapping at the edge of my memory of the Government partially funded one or both of the World Wars by issuing War Bonds or the like to people and they never did redeem those Bonds (ie pay people their money back)? - ie the Government stole that money from its own citizens.

There is something like that nagging at my mind. It didn't stay "glued in" as a memory - because my second thought was that I would never have bought anything like that anyway..so wouldn't be affected by that sort of malarkey.

So - if they've stolen the money tied up in one type of Bonds (ie War Bonds) - then what is to stop them stealing the money tied up in another type of Bond (ie Premium Bonds) iyswim?

EDIT; Quick google of "Government defaulting on War Bonds" and the mini-snippets Google has produced reveal the word "default" coming up on more than one entry and a newspaper article of 2014 stating the Government finally repaid FIRST World War War Bonds!

fuddle

lillibet_dripping wrote: »

2.20 a.m. :eek::eek::eek:
Fudds, are you OK petal?

It got worse. I went on to bake Dorset apple cake. Just couldn't sleep.:cool:

thriftwizard

Developers of new builds/ new conversions register the address with the local authority address referencing officer. I take some of those calls and pass them across to ours, postcodes are issued, address is added to local authority maps and systems, the address is set up for refuse & recycling collections, council tax account etc etc. It's a fast process, certainly doesn't take a year, more like a couple of weeks. Most developers will register before the properties are even sold.

Wish they'd pass the details on to the Education Authority! Last year I spent some time trying to help a friend with 5 kids whose new-build HA address wasn't registered; she was very clearly well within the catchment area of the local school, within walking distance and with spaces, but computer said no... they'd assigned her kids to two different schools, 6 miles apart along a major commuter route with no bus service, and you can bet she'd have been in deep trouble if either set were unduly early or at all late! So she home-edded until they sent an inspector out & saw for themselves that there are indeed houses there now.

I think part of the problem is that plans have been approved (most of them full detailed plans, rather than outline) that will double the size of our little town - over 2,000 more homes approved, current pop. 5,500 - although there are no plans for more school places or surgeries etc.. I assume the authorities know all about these, but also know that most of them have yet to be built. (You'd have to be exceptionally lucky - or influential - to get approval for a single home, but 600? No problem!) So their records will be in a certain amount of disarray. My friend actually had two different postcodes issued, both of which worked for deliveries; the EA were not impressed with this and saw it as proof that she was lying to get her kids into a popular school. So the infrastructure - postcodes etc. - is probably there on paper, but most of it isn't actually there on the ground yet & there's an enormous amount of confusion; she was also refused a bank account by the major banks with branches here, but her ex having turned out to be a gentleman of hugely negotiable morality probably didn't help with that either, even though he is firmly back on his continent of origin & never likely to be able to leave again!

fuddle

thriftwizard that isn't just a problem with new builds, that's a problem that effect everyone in the area. It happened to me living in a 1980's house. No one bent over backwards to get my girls where they should be going. I had to absorb the fallout myself.

There is also a major problem with the academy trust schools applying to the council for catchment areas be changed to make sure that trust inclusive school children get places at middle school before those who aren't. As the local first school declined to be in the trust it means that should these plans go ahead children out of the area from schooks also out of the area will get middle school places before that of children from the first school over the road. It's ludicrous. As I left I don't know what is going on but there was one school having to fight very hard to get their voices heard in November. Why aren't they in the trust? They choose to opt out and now the local children are likely to suffer if this gets the go ahead.

nuatha

moneyistooshorttomention wrote: »

Though reading your comment has reminded me that didn't our Government "do the dirty" on its own citizens in relation to some Bonds or other before??? I've got something tapping at the edge of my memory of the Government partially funded one or both of the World Wars by issuing War Bonds or the like to people and they never did redeem those Bonds (ie pay people their money back)? - ie the Government stole that money from its own citizens.

There is something like that nagging at my mind. It didn't stay "glued in" as a memory - because my second thought was that I would never have bought anything like that anyway..so wouldn't be affected by that sort of malarkey.

So - if they've stolen the money tied up in one type of Bonds (ie War Bonds) - then what is to stop them stealing the money tied up in another type of Bond (ie Premium Bonds) iyswim?

EDIT; Quick google of "Government defaulting on War Bonds" and the mini-snippets Google has produced reveal the word "default" coming up on more than one entry and a newspaper article of 2014 stating the Government finally repaid FIRST World War War Bonds!

One of the problems with skimming, rather than reading. There are a number of Government bonds still in existence since 1730-1930 these are a type known as perpetual bonds, there is no fixed redemption date and as long as the stated interest continues to be paid, there is no default. It is possible to redeem these bonds, though a better return would be obtained by selling them on the market. A bond paying a guaranteed 3.5% tax free is a decent investment in the current financial climate. When interests rate were high, there was no point in a government redeeming cheap bonds, when other borrowing was considerably more expensive, now that interests rates are trivial, redeeming these bonds represents about half a billion off the national debt.

As I said upthread, what will stop the government on defaulting on premium bonds, is that the cost of all government borrowing would instantly rise astronomically - if they could borrow anything at all. Premium bonds are one of the cheapest sources of borrowing for a government.