Carney guarantees low rates on breakfast tele

wotsthat

CLAPTON wrote: »

I'm very very impressed that pre 2007 you realised that RBS, HBOS Dumfermline BS, B&B, Northern Rock and a few other banks were 'high risk' institutions.

I sadly have to confess that like many millions of people, I had no idea they were taking these risks and my few bob was vulnerable.

Putting money into a bank isn't risk free. They take your money and lend it to other people - you really do need those other people to keep up the payments if you want to make a return. Surprised you didn't know this.

Northern Rock were doing some cracking saving rates just before the crash. There were plenty of stories about 120% mortgages at the time so I avoided. Shouldn't have been bothered because once it went wrong the government guaranteed all deposits so lots of people got to have their cake and eat it.

CLAPTON wrote: »

For the record could you tell us which banks /BSs should be avoided now?

I'd avoid having sums of money over the state compensation level in any single institution.

I'm not finding it a big worry to be honest. Can't say I'm interested in depositing too much cash in the bank when rates are so low and unlikely to improve in the near future.

Fella

wotsthat wrote: »

Makes you wonder why savers allowed their money to be lent to such unsuitable risks.

No it doesn't. The Govt and sites like this one went out of their way to promote the FSCS & the institutions that were part of it. Perfectly reasonable of those savers to expect their savings up to the FSCS limit to be safe.

Conrad wrote: »

Savers have plenty of alternatives so this endless whining by them really is a bit pathetic. No one has some divine right to an income stream.

True in theory but the reality is that whilst people like you & I may or may not have the means & the knowledge to invest diversely, your average pensioner doesn't have a clue & is often incapable of even choosing the best savings account, let alone more sophisticated investments. Furthermore having savings in cash or cash equivalents is fairly standard advice for the elderly.


So whilst it's true in theory it's not in practice.


The reality is that savers are being screwed over to bail out people who can't afford their mortgage, no amount of people on here claiming otherwise will change that.

CLAPTON

Generali wrote: »

No but they always have done because people wanted their money back.

If you keep your money in a safe deposit box or under the mattress you take little risk and get no interest as a result. If you lend money to a bank you take a risk and are compensated for that.

The idea that this compensation should be legislated for is risible IMHO.

at the time, virtually no-one thought there was any risk in putting their saving into a UK bank or BS.

they were proved right of course as the government bailed them out.

currently if you have less than 85k in any bank then you are risk free.

so if one removes that government guarantee what would be the consequences?

I believe that over 99% of people would move move savings to National Savings.

Would that be good for the UK economy or bad or neutral?

CLAPTON

wotsthat wrote: »

Putting money into a bank isn't risk free.



I'd avoid having sums of money over the state compensation level in any single institution.

I'ld call that risk free!

Fella

CLAPTON wrote: »

I believe that over 99% of people would move move savings to National Savings.

Would that be good for the UK economy or bad or neutral?

I actually reckon most of it would go under the mattress which would be worse!

wotsthat

CLAPTON wrote: »

I'ld call that risk free!

Yes nominally it's risk free.

Savers are being hit by inflation and low rates and yet there's still over £1tn on deposit. Plenty of that will be over the compensation limit and at risk from institutional failure so it's difficult to see why anyone would risk this unless they're happy with the returns.

Government molly-coddling means many people didn't receive a lesson in risk and return; savers included.

Fella

You mean like the millions of mortgage-holders currently being molly-coddled? Not much sign of the Government "teaching them a lesson".

Genuinely makes me LOL how anyone can think it's savers that need to be "taught a lesson" when we're all sitting here paying for a situation brought about by borrowers taking on loans they couldn't afford (and in many cases lied about their income to get).

wotsthat

Fella wrote: »

No it doesn't. The Govt and sites like this one went out of their way to promote the FSCS & the institutions that were part of it. Perfectly reasonable of those savers to expect their savings up to the FSCS limit to be safe.

The government of the day decided to protect those above the FSCS limit too.

People with large cash deposits were big winners from the crash - they pocketed the gains when they were there and then shared the losses with the taxpayer.

wotsthat

Fella wrote: »

You mean like the millions of mortgage-holders currently being molly-coddled? Not much sign of the Government "teaching them a lesson".

Genuinely makes me LOL how anyone can think it's savers that need to be "taught a lesson" when we're all sitting here paying for a situation brought about by borrowers taking on loans they couldn't afford (and in many cases lied about their income to get).

Lots of people were not 'taught a lesson' - savers didn't lose any money and lying borrowers didn't do any jail time.

Fella

wotsthat wrote: »

The government of the day decided to protect those above the FSCS limit too.

Yes the Government didn't think through the FSCS. They failed to understand that they'd probably end up owning any bank that required FSCS assistance & that it'd therefore be politically impossible to not honour deposits of any amount.

wotsthat wrote: »

People with large cash deposits were big winners from the crash - they pocketed the gains when they were there and then shared the losses with the taxpayer.

The reality is that they saved effort more than anything else. Unless you had pretty large amounts of money it really wasn't difficult to spread cash savings around & stay under the FSCS limit & still get a decent return, it just took a bit of effort. Keeping more than the FSCS limit in one place was (& is) lazy & a bit daft. Were there really that many people with substantial (let's say a million or more) savings in cash in one bank? I've never met anyone with remotely that much who doesn't invest it mainly in non-cash options. Without knowing the figures I'd guess the number of savers with >the FSCS limit that were bailed out is a drop in the ocean compared to the number of mortgage holders currently being kept above water by low base rates.