Annuity rates ‘have gone into freefall’: Money-printing triggers slump - and it may g

homelessskilledworker

purch wrote: »

The longer you continue to think that, the longer you will be behind the curve.

If you think 1/2 % Base Rate and QE has anything to do with "heavily indebted homeowners" you are (as usual), being woefully naive.

Really, me naive?

Then please explain to me with interest rates at record lows why so many are drowning in debt, and to raise base rates to 5% say would probably cause a meltdown in the banking industry, when many probably took mortgages out at higher rates than that anyway.

lisyloo

with interest rates at record lows

Only base rates are at record lows.
Mortgage rates bear very little resemblance in most cases.

Many people are facing increased bills - fuel, food, jsut about everything and at the same time facing lower incomes either in real terms or nominal.

However I read it that this is not the reason you are being called naive.
You are being naive because you think government policy revolves around homeowners. It doesn't.
What about business?
What about governement debt?

The reason rates are low is because of the governement debt that we have no chance of ever paying back. Our only path is to deflate it away.

It doesn't revolve around homeowners.

purch

homelessskilledworker wrote: »

Really, me naive?

Then please explain to me with interest rates at record lows why so many are drowning in debt

As usual you have decided to go off on a tangent.

Sorry, not naive. The question you pose is just plain stupid.

As has already been pointed out, the record low base rate, and the QE program has been undertaken to try and avert a possible economic depression, and not simply to "pander" to mortgage holders.

Gracchus_Babeuf

homelessskilledworker wrote: »

http://www.dailymail.co.uk/news/article-2215301/Annuity-rates-gone-freefall--Money-printing-triggers-slump--worse.html#comments


I am still of the opinion that the BOE will continue to pander to the heavily indebted homeowner for the foreseeable future, but this is quite an injustice and I can see a lot of grey p****d off voters becoming more vocal in the next few years.

Most people have mortgages - get over it.

The solution would be to stop the current obligation of new pensioners to buy annuities with 75% of their pension funds. Just give the whole fund to the pensioner and let him do what he wants with it, with the proviso that from that moment onwards he will not be eligible for any minimum pension guarantee.

Gracchus_Babeuf

andyroberts1967 wrote: »

Interest rates and savings rates have been mega-low for years now, savers should be used to it by now and have made some alternative investment plans if it really affects them.
As a mortgage holder I find it personally a huge benefit, and I've been vastly overpaying for the last 4 years or so, means I've shaved about 8 years off my mortgage and I should feel this benefit more and more in the years to come. I can't be the only one in this position, and I'm sure the long term position will be that there will be millions of people who will have surplus income in the years to come, thus boosting spending power and the economy in general.

What do people think?

Not everyone can afford to 'vastly overpay' their mortgage. Many people have to stretch themselves just to be able to buy a decent house. Of course if you receive a windfall, then fair enough.

ILW

Gracchus_Babeuf wrote: »

Most people have mortgages - get over it.

.

That is totally untrue.

Gracchus_Babeuf

homelessskilledworker wrote: »

I have taken on a lot of HMO work on in recent years and have noticed how many of those in retirement or close to it are now investing in property.
I sure many of them just see pensions as a waste of time, if this government or any other want to encourage and convince more people to take up pensions they are going to have to work a lot harder.

You forget that an annuity is not compulsory until you reach age 75. You can drawdown from your pension fund until then, and then there is the 25% tax free amount as well.

Gracchus_Babeuf

ILW wrote: »

That is totally untrue.

Ok, what are the figures to back up your statement? Valid sources please?
Or are you referring to over 50s only?

ILW

Gracchus_Babeuf wrote: »

Ok, what are the figures to back up your statement? Valid sources please?
Or are you referring to over 50s only?

CML quotes around 11 million mortgaged properties.

Population around 65 million.

That does not mean most people have a mortgage.

That does not even mean most families (ave 3.5 people) have a mortgage.

purch

Gracchus_Babeuf wrote: »

Ok, what are the figures to back up your statement? Valid sources please?

You won't get any of those.

So far this thread has revealed that, "many are drowning in debt", that raising base rate to 5% would "cause a meltdown in the banking industry", and that "Most people have mortgages" or on the other hand "Most people don't have mortgages"

........such is the MSE Forum World :eek: