Prudent savers being punished - reply from governor boe office

HUMBUG

bowlhead99 wrote: »

Perhaps you didn't notice that over 10% of government tax revenue comes from the financial services sector or that although the million people employed by the FS industry are only about a thirtieth of the working population, they are responsible for about a nineth of the PAYE receipts. Clearly those million jobs are not all provided by London banks but you can't have failed to notice that the service sector, particularly financial services, is where a huge amount of our 'exports' come from and where there are £70bn of taxes borne and collected each year.

Or maybe, you have failed to notice it because you don't understand much about economics and think that somehow the economy doesn't affect you. When clearly it does affect you, so much that you are writing to the Bank of England with advice on how to run the economy.

£6.2k a year is the minimum basic state pension assuming no s2p/serps so perhaps there is a workplace pension on the side (and if not, pension credit). Looking at the components of CPI/RPI, food inflation over the last decade is not high compared to percentage increases in state pension/pension credit and DB pension indexing.

That's true. But pensioners have had a longer lifetime in which to receive income and accumulate income-generating assets.

Whose fault is that if you destroy the manufacturing industry and become more dependent on a shifty/crooked financial sector? The money made from the financial sector goes back into the pockets of the richest. I may not know anything about economics but you can plainly see the growing inequality in this country (unless you are completely oblivious). Maybe you need to spend more time in the poorer communities. Show a bit of empathy for people in the real world rather than regurgitating a pile of questionable economic dross (and please don't use PWC as a trustworthy name to authenticate any accounting or audit analyses).

Glen_Clark

HUMBUG wrote: »

Whose fault is that if you destroy the manufacturing industry and become more dependent on a shifty/crooked financial sector?

I don't think Thatcher wanted to destroy the mining and manufacturing sector. But that was where the trade unions were, and she saw it as a price worth paying to destroy the unions.

Glen_Clark

AnotherJoe wrote: »

I work for an IT vendor........

BTW, when did you last backup your 16 year old PC?

I have a spare second hard drive, and back up important stuff on USB drives to transfer to my Windows XP Laptop. All using 16 year old software. Beauty of my old tower PC is I can just replace the bit that fails, hard drive, dvd drive, keyboard or whatever instead of buying a new PC with new software. I must be a nightmare to IT vendors like you

bowlhead99

Glen_Clark wrote: »

Just tried again to quote Bowlhead's post with Windows 7 then Windows XP PC and both are working now (posts deleted)
Must have been bowlhead's link to the British Government website that spooked my trusty old PC. Perhaps it knows they are a bunch of crooks

Maybe

There's been a bunch of posts about the new server/isp software which mse are using which does spot checks on certain browsers/ configurations from time to time. Sometimes it just blocks you , then lets you through after clicking but you've lost your post content. Various threads about it scattered over the forum.

I posted on this other thread on the techy board when I had it twice in an hour or two a little while ago, but have had no issues since. https://forums.moneysavingexpert.com/discussion/5600945

AnotherJoe

Glen_Clark wrote: »

I have a spare second hard drive, and back up important stuff on USB drives to transfer to my Windows XP Laptop.

Good, there arent many people that do that.

Glen_Clark wrote: »

I Beauty of my old tower PC is I can just replace the bit that fails, hard drive, dvd drive, keyboard or whatever instead of buying a new PC with new software. I must be a nightmare to IT vendors like you

Not at all, I deal with back end servers not PC's (the stuff that runs the really big systems like central gvt, airlines, banks, ATMs those sort of systems). If the people who looked after those took the same attitude as you of incremental updates (lets ignore WInXP for now) I'd love it as it would make my job easier as I wouldn't be trying to persuade my employer to support horrendously old software on our latest bit of shiny that expects the customer to have some software thats less than 10 years old. Its not that long ago most of government were running on IE6 despite its known issues. And they would have the temerity to question us on our security !

The difference between you and government / banks is that you (apart from the horror of WInXP :cool: ) upgrade as you go, so its affordable and you work any issues out as you go. Whereas they will put it off until they are forced to and then the cost and time is massive and its rip and replace.

The issue you will have is that one day you'll update something and find that it simply wont work on WinXP any more despite what the vendor says. Might be a motherboard,a disc drive, sound card, printer, whatever. (Thats if the malware doesn't get you first of course )

FWIW I loved XP. Great OS for the time. And I built and upgraded my own PC , multi core before most systems were, RAID drives the works.
Then I went Apple as i got fed up continually tinkering and just wanted to use a PC for my stuff. Now I just use my PC for what I want to do, once in a while update the software with one click and I never mess with drivers and the like (apart from this godammn HP printer I have but that's another story)

despair

Theres millions of elderly who do not have the luxury of a company or private pension instead they saved out of low but still taxed income
they may have had their fingers burnt by the confiscation of Northern Rock or B and B ingley or any number of companies that failed so the last thing they need or want is the risks of stocks
hence they relied on interest from their savings
without a shadow of doubt its FLS and now TFS that has trashed interest rates and Bof E are a nasty bunch of liars
you only have to read the rubbish spewed out by Carney on 6th Dec and by His sidekick Gertjan Vlieghe who claimed that savers are not poorer because stocks and houses have increased in value
well sorry many many many stocks held by ordinary people have not actually increased in value since 2008 and neither have their dividends and as for house prices even Bof E staff have opeenly admitted theres no way you can take a brick from your house and spend it
many elderly only live in a 1 bed unit what do they downsize to? A tent
The entire problem is the MPC live in an ivory tower on mega bucks incomes devoid of any commonsense and have no understanding whatever of how those reliant on savings have reacted....the pain fact is they have pulled in their belts and simply cannot and will not spend so that plan if the MPC has backfired

bowlhead99

despair wrote: »

you only have to read the rubbish spewed out by Carney on 6th Dec and by His sidekick Gertjan Vlieghe who claimed that savers are not poorer

What he said was in reaction to a government comment that people with savings had found themselves poorer. He said that only represented a partial view, because of the £10 trillion of household wealth, only about a seventh was in cash, with the rest being in house prices and other investments, which were boosted by the QE activities.

Relatively few people have a large pile of cash and nothing else. If they only have a small pile of cash, then they were not getting a large income from it anyway, not in real terms with inflation being higher in the 8 years to 2009 than the 8 years since; so the idea that they are now a lot poorer than they would have been if the rates had not dropped and the economy had slowed significantly instead through lack of stimulus, is perhaps at least partially an illusion.

... because stocks and houses have increased in value
well sorry many many many stocks held by ordinary people have not actually increased in value since 2008 and neither have their dividends...

When you buy individual stocks there is no guarantee of success which is why people invest broadly through investment funds, so that while 'many' stocks have not increased in value or increased dividends, there are many that have. The yield of the FTSE All-share is not really any worse now than in 2008, with capital values a good bit higher.

But probably the point is not to test the value today against a cherry picked relative high point before the financial crash. It would be to test it against the low points after the financial crash where the companies were being valued with all the fear and uncertainty in the economy, worsened company health and increased unemployment prospects (unemployment increasing from 5% in 2008 to 6%, 7%, 8%+ which has now eventually recovered back down to below 5% with the constant stimulus). Local and global QE and low interest rates has helped share prices (which account for more household wealth than bank accounts) recover from what your share price and dividend performance would be like without it.

And as for house prices even Bof E staff have opeenly admitted theres no way you can take a brick from your house and spend it

I am not a fan of high house prices. And I understand you can't typically 'spend your house' from day to day. However if you are a pensioner in your 1-bed flat worth £100k you are probably better off than if you were in a 1-bed flat worth £60k, as when you want to move into a nursing home or sell it off to give your kids, someone will literally pay you more money for it.

The entire problem is the MPC live in an ivory tower on mega bucks incomes devoid of any commonsense and have no understanding whatever of how those reliant on savings have reacted....the pain fact is they have pulled in their belts and simply cannot and will not spend so that plan if the MPC has backfired

I am not looking to bait other people who hate politicians and economists into an argument here, but I think the assumption that the monetary policy committee is devoid of common sense and lives in an ivory tower with no understanding of how the world works, is misguided.

No doubt the people who are living on meagre savings and would like more savings, would have preferred greater targeted help of some kind. However it seems to me that perhaps those people are prioritising their own situation and do not have an appreciation of all the various levers and gears that make an entire economy tick, and I wonder what analysis and economic forecasting they have done to ascertain that the economy is worse off now than if no QE or interest rate stimulus had been done at all.

The rebuttal for that is usually "well I heard the economists consensus forecast was inaccurate on a few things so you can't believe anything that so-called experts say", but I have heard that one before.

despair

sadly your response is very typical of someone who has not suffered a massive income drop thanks to the mess the MPC has created
The Bof E is not allowed to target specific groups yet it has deliberately via FLS and TFS poured billions of very cheap money into banks and b soc in the full knowledge it would trash interest rates and thus the incomes of millions
it has also provided ultra cheap mortgages which has fuelled a house price explosion which in turn is denying the young any chance of a house .
There is no way on earth that robbing savers, pushing house prices out of reach or fuelling a debt mountain in name of consumerism is good for the country or the majority of its citizens
My savings and dividend income has been trashed by way over 50% , but because i dare to have savings i am not entitled to pension credit yet its totally impossible to live on the resulting income which because my state pension is only £70 pw falls way way below even personal tax allowance
Theres no way i want more stocks and shares and i am tired of the merry go round of setting up one direct debit after another in a round robin to make best use of
bank accounts and monthly savings accounts to get what little interest is possible
Any increase in value of my home is totally and utterly irrelevant since i simply cannot access it and i sure have no intention of giving equity release companies 40% for the priveledge

So sorry i like many many others of my age who were carers are incredibly poorer solely and utterly thanks to MPC and the B of E failure to address the problems in financial industry long long before the crisis

Malthusian

despair wrote: »

it has also provided ultra cheap mortgages which has fuelled a house price explosion which in turn is denying the young any chance of a house .

So you're complaining about the Bank of England's actions which have affected you negatively (reducing cash interest rates) and you're also complaining about the Bank of England's actions which have affected you positively (increasing the value of your house) because it affects other people negatively. What is the Bank of England supposed to that would please you?

My savings and dividend income has been trashed by way over 50%

The yield on a diversified portfolio of FTSE shares is about 3.5%, largely the same as it has been for the past decade. If your dividend income has been halved then you were gambling on individual shares. Why were you gambling with money you were dependent on for income?

Any increase in value of my home is totally and utterly irrelevant since i simply cannot access it and i sure have no intention of giving equity release companies 40% for the priveledge

So you can access the value of your home but choose not to. If the interest on equity release is the problem then why not downsize?

So sorry i like many many others of my age who were carers are incredibly poorer solely and utterly thanks to MPC and the B of E failure to address the problems in financial industry long long before the crisis

Solely and utterly? Your refusal to take responsibility for your own life is what is making you miserable, not the BoE.

Keep_pedalling

despair wrote: »

sadly your response is very typical of someone who has not suffered a massive income drop thanks to the mess the MPC has created
The Bof E is not allowed to target specific groups yet it has deliberately via FLS and TFS poured billions of very cheap money into banks and b soc in the full knowledge it would trash interest rates and thus the incomes of millions
it has also provided ultra cheap mortgages which has fuelled a house price explosion which in turn is denying the young any chance of a house .
There is no way on earth that robbing savers, pushing house prices out of reach or fuelling a debt mountain in name of consumerism is good for the country or the majority of its citizens
My savings and dividend income has been trashed by way over 50% , but because i dare to have savings i am not entitled to pension credit yet its totally impossible to live on the resulting income which because my state pension is only £70 pw falls way way below even personal tax allowance
Theres no way i want more stocks and shares and i am tired of the merry go round of setting up one direct debit after another in a round robin to make best use of
bank accounts and monthly savings accounts to get what little interest is possible
Any increase in value of my home is totally and utterly irrelevant since i simply cannot access it and i sure have no intention of giving equity release companies 40% for the priveledge

So sorry i like many many others of my age who were carers are incredibly poorer solely and utterly thanks to MPC and the B of E failure to address the problems in financial industry long long before the crisis

You have been a member here since 2009, yet you don't seem to have made use of the valuable advice that has been available to you for all that time. A wise investor, or one with access to good advice, should not have seen their dividends slashed over the last 8 years and should also have seen some very decent capital gains in that time.

My last cash ISA earned 6% but when that expired and all I could get was 2% I figured I needed to do things differently,

Equity release would be my last choice, but for those who are asset rich but cash poor it is a better option than living in relative poverty just so one else can inherit when you pop your clogs.