UK interest rates held at 0.5% for years

Glen_Clark

The Government is doing exactly the opposite of what is needed for the long term - to encourage saving so eople will be able to look after themselves without relying on the state.
Negative real interest rates was brought in as a short term emergency measure to buy time for the Government to fix the problems in the economy. Just like Robert Maxwell raiding the pension fund to buy time to fix his companies. But that time has been squandered and wasted, Britains fundamental problems remain.

Old_Slaphead

atush wrote: »

If you are 64 and working, slap 3 years worth of salary of the 200K into a pension, get tax relief then 25% LS and income DD using equities.

That way you still have some cash, but have equities for income

For the record I'm not 64, I don't have £200k assets and I have pension funds (and use IDD) but I'm sure anyone who has those characteristics will find your comments useful atush
I've been through a few crashes and wouldn't necessarily be suggesting that everyone with a short term investment horizon should be piling into equities & bonds just now.

lvader

Old_Slaphead wrote: »

Then maybe you should have qualified your statement by saying.....

"With the benefit of hindsight cash savings were not a good method for retirement saving, stocks and shares and bonds have generally done much better than cash"

As to the future - who knows ?

FWIW anyone investing a lump sum in the late 90s would probably have been better off investing in the best available fixed rate savings accounts as opposed to a combination of shares/UTs matching the average return on the FTSE100.

No, it's never a good idea to have all your pension savings in cash, but sometimes it's best not to compound a mistake with another rash move.

lvader

Glen_Clark wrote: »

The Government is doing exactly the opposite of what is needed for the long term - to encourage saving so eople will be able to look after themselves without relying on the state.
Negative real interest rates was brought in as a short term emergency measure to buy time for the Government to fix the problems in the economy. Just like Robert Maxwell raiding the pension fund to buy time to fix his companies. But that time has been squandered and wasted, Britains fundamental problems remain.

The goverment doesn't set interest rates.

MoneySaverLog

lvader wrote: »

The goverment doesn't set interest rates.

They 'influence' them though through their actions.

buglawton

lvader wrote: »

The goverment doesn't set interest rates.

BOE is an agency for the government.

rb10

leveller2911 wrote: »

Don't see why Nationwide and their ilk should make 20% lending my money out whilst paying me 2.75% interest.Go back 6 years and their bond rates were 6.49% and their credit card interest was 9.9% so their profit has rocketed.

Sorry, but this is complete nonsense.

Most of Nationwide's balance sheet is mortgages. Credit cards contribute only a tiny part of this.

What sorts of rates are they offering on mortgages at the moment? Largely in the 3-4% region.

So they are getting, say, 3.5% on their mortgages, and paying you 2.75%. That's not a very big profit margin, especially when they take out costs and write-offs.

lvader

How are they influencing the BoE to do the wrong thing and only take a short term view? Maybe that assumtion is wrong and although the goverment has some influence, low interest rates happen to be the right thing to do.

FLAPJACK

So I assume the message today for savers was.....things aint going to change for the foreseeable.

So have a ball spend your capital then when you are down to £6k claim benefits.....adding to the governments debt.


Or as rates are so low get a reasonable size personal loan and sink the loy in the stock market and hope the monthly returns are more than the monthly repayment.

Either way it's bleak.

MoneySaverLog

I'll agree to disagree, I believe low interest rates are the wrong thing to do