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Biggest drop in savings for 40years
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grizzly1911 wrote: »"Savers have been withdrawing money from their accounts at the fastest rate for nearly 40 years, Bank of England figures show.
They took £23 billion out of long-term savings in the past 12 months, equivalent to £900 for every household in the country"
Only another trillion or so sat in 'losing' accounts.
At least some people are chasing better returns. Looks like QE is being farmed out to the private sector.
If more people had been willing to chase risk earlier in the recession it might not have dragged on for do long.0 -
Only another trillion or so sat in 'losing' accounts.
At least some people are chasing better returns. Looks like QE is being farmed out to the private sector.
If more people had been willing to chase risk earlier in the recession it might not have dragged on for do long.
I wonder how much of that trillion(?)is:-
- trading capital
- accumulated capital
- everyday income washing back and forth
- in the hands of those who have far too much to bother about rates
- in the hands of those that can afford to pay £100k per month credit card bills without noticing.
etc.
The ones that could really make the difference probably won't."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
This assumption that the savings removed from accounts has all been funneled into investments seems more wishful thinking than based on anything.
Even the article itself suggests with low wage growth and increasing costs / debt, families are playing catch up and pulling savings out.
Sure, some of it will go to investments, but it would be it doesn't take a genuis to figure out that with increasing outgoings and decreasing incomes, a lot of people will be pulling savings to pay for everyday items.
Secondly, at the same time as record withdrawal of savings we have increased household debt and increased spending.
So the majority of the signs suggest, along with the article, that a lot of the savings withdrawals are being used for consumption purposes.0 -
grizzly1911 wrote: »I wonder how much of that trillion(?)is:-
- trading capital
- accumulated capital
- everyday income washing back and forth
- in the hands of those who how far too much to bother about rates
- in the hands of those that can afford to pay £100k per month credit card bills without noticing.
Don't know. Last figure I saw from memory was £1.4tn being held on deposit. I think it's mainly savings that are slowly but surely being eroded by inflation.0 -
Only another trillion or so sat in 'losing' accounts.
At least some people are chasing better returns. Looks like QE is being farmed out to the private sector.
If more people had been willing to chase risk earlier in the recession it might not have dragged on for do long.
I'm really limiting the amount of cash that I have in 'losing account's' (is there any other kind these days?). It is possibly unsavoury to mention how much, but I have recently moved a fair bit into ftse trackers and will be moving as much again by next spring as more fixed rate savings bonds mature, but with nowhere to move the money to.Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop0 -
Graham_Devon wrote: »This assumption that the savings removed from accounts has all been funneled into investments seems more wishful thinking than based on anything.
It's either been spent, invested elsewhere or anywhere in-between.
If it's been invested then it's being invested in something riskier than cash which is positive. If it's been spent then it's pushing consumer spending and helping growth.
We should be happy that..
a) people are taking risk with their own money (rather than ours) or
b) confident enough to spend money to fuel the economy.
Maybe you're right though and after 5 years of recession the skint people are just dipping into their savings.0 -
Graham_Devon wrote: »........So the majority of the signs suggest, along with the article, that a lot of the savings withdrawals are being used for consumption purposes.
It's all us boomers having a whale of a time. We saved. We got 'rich'. We retired. Yes, we have pension income but not enough to pay for our luxurious lifestyle. The rest, logically, has to come from savings. We have to spend it before we get called to the great house-inflation-free affordable estate in the sky....
Nothing wrong with that. You wouldn't want us to hoard it all and not recycle it into the economy would you?0 -
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Thrugelmir wrote: »The issue is the distribution of savings not the amount.
That's why I'm dubious about assertions that poor people are dipping into their savings to cover the increasing costs of essentials.0 -
That's why I'm dubious about assertions that poor people are dipping into their savings to cover the increasing costs of essentials.
Those with the most are unlikely to need to dip into their savings.
Those with the least are more likely to do so."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0
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