NS&I to cut premium bond rate and other accounts

thegentleway

vacheron said:

thegentleway said:

nbrewitt said:

Sailtheworld said:

It's about time. Not sure why the taxpayer was expected to be providing market leading interest rates to the already wealthy.

Irresponsible comment, not all NS&I savers would class themselves as wealthy by any means 

Sorry but I think you are grossly underestimating what is means to be weathly by world standards. Please note that

Nearly Half the World Lives on Less than $5.50 a Day

This value is adjusted to reflects standards in upper-middle-income countries. So yeah, if you are an NS&I saver then you are very wealthy.
Check out: https://howrichami.givingwhatwecan.org/how-rich-am-i if you want to find out how rich you are compared to the rest of the world.

So by your logic, I (and almost everyone I know) must be VERY wealthy in relation to the number of arms and legs we own because we all have more than the world mean average!

Also, what if a person earning £5.40 per day saves 10p in an equivalent to a savings account in their country? do they immediately become very wealthy too while also being poor?

Hi vacheron,

No, sorry but you’ve confused median with average. I posted the median world income, not the average.

The logic for arms and legs is that you and almost everyone you know has the median number and as such average luck.
To answer your question: do you really think people living on a fiver a day can open a savings account?

strawb_shortcake

thegentleway said:

annabanana82 said:

thegentleway said:

nbrewitt said:

Sailtheworld said:

It's about time. Not sure why the taxpayer was expected to be providing market leading interest rates to the already wealthy.

Irresponsible comment, not all NS&I savers would class themselves as wealthy by any means 

Sorry but I think you are grossly underestimating what is means to be weathly by world standards. Please note that

Nearly Half the World Lives on Less than $5.50 a Day

This value is adjusted to reflects standards in upper-middle-income countries. So yeah, if you are an NS&I saver then you are very wealthy.
Check out: https://howrichami.givingwhatwecan.org/how-rich-am-i if you want to find out how rich you are compared to the rest of the world.

I'm not sure of the relevance of world wealthy in this context. According to the link only 16% of the world is wealthier than me, but I can hardly up sticks and move somewhere poor to live like a Queen.
It also says I can give £15000 away a year and still be richer than many, and the £15k is more than I'd have left for myself!! It also neglects the fact that  I couldn't bring up my family on what I had left living in the UK

Hi annabanan82,
The relevance is that nbrewitt wrote “not all NS&I savers would class themselves as wealthy by any means”
Sorry but the calculator is either playing up or you’ve made an error in the numbers you’ve posted. The giving what you can pledge is only 10% of income so if it’s suggested you donate £15k then than means you’ve entered you earn £150k, which easily puts you in the top 1% earners world-wide (not 16% or even 1.6% assuming you missed a decimal point).

I don’t know what you earn so difficult to come on whether you’d be able to bring up your family but for context Toby Ord brings up his family on income of £18k per year (he donates what he earns above £18k).
Thanks for commenting and hope you found the calculator helpful.

Just checked again, it now says to give 10% of my income away which is nowhere near £15k.
But no, I don't find it a particularly helpful tool, I think it's a tool to try and make people feel guilty about having money.

Sailtheworld

mr_accountant said:

the income bond 1.16 to 0.01, thats savage, will the website be able to handle the carnage to follow, just as well i kept in marcus at 1.05, was not worth the hassle of moving money (even large sums) for a few tens of pounds per year.

question is will all the other banks drop thier rates?

I doubt there will be any carnage. Most of the money with NS&I is 'apathy' money and, no matter what, won't go anywhere. Obviously there's been some excitement recently as more active savers have flocked to NS&I due to market leading rates - that cash will probably be heading somewhere else. When market leading is 1% though we're talking about diminishing returns per unit of effort.

Thrugelmir

Sailtheworld said:

Thrugelmir said:

Ouch. This is going to cause a downward spiral. 

You make it sound like this is a bad thing - it isn't.

Most charities transfer wealth from rich to poor - NS&I were doing just the opposite.

Other deposit will substantially reduce their rates too. NSI is effectively saying we don't want your money to existing customers. The money has to flow somewhere else. That will be an enormous amount of money looking for a new home in a short space of time. 

thegentleway

annabanana82 said:

thegentleway said:

annabanana82 said:

thegentleway said:

nbrewitt said:

Sailtheworld said:

It's about time. Not sure why the taxpayer was expected to be providing market leading interest rates to the already wealthy.

Irresponsible comment, not all NS&I savers would class themselves as wealthy by any means 

Sorry but I think you are grossly underestimating what is means to be weathly by world standards. Please note that

Nearly Half the World Lives on Less than $5.50 a Day

This value is adjusted to reflects standards in upper-middle-income countries. So yeah, if you are an NS&I saver then you are very wealthy.
Check out: https://howrichami.givingwhatwecan.org/how-rich-am-i if you want to find out how rich you are compared to the rest of the world.

I'm not sure of the relevance of world wealthy in this context. According to the link only 16% of the world is wealthier than me, but I can hardly up sticks and move somewhere poor to live like a Queen.
It also says I can give £15000 away a year and still be richer than many, and the £15k is more than I'd have left for myself!! It also neglects the fact that  I couldn't bring up my family on what I had left living in the UK

Hi annabanan82,
The relevance is that nbrewitt wrote “not all NS&I savers would class themselves as wealthy by any means”
Sorry but the calculator is either playing up or you’ve made an error in the numbers you’ve posted. The giving what you can pledge is only 10% of income so if it’s suggested you donate £15k then than means you’ve entered you earn £150k, which easily puts you in the top 1% earners world-wide (not 16% or even 1.6% assuming you missed a decimal point).

I don’t know what you earn so difficult to come on whether you’d be able to bring up your family but for context Toby Ord brings up his family on income of £18k per year (he donates what he earns above £18k).
Thanks for commenting and hope you found the calculator helpful.

Just checked again, it now says to give 10% of my income away which is nowhere near £15k.
But no, I don't find it a particularly helpful tool, I think it's a tool to try and make people feel guilty about having money.

I'm really sorry to hear you didn't find it helpful. It's really not designed to make people feel guilty at all. I really like it because it makes me feel lucky; I naively thought it would have a similar positive effect in others. Some of my friends complain about the 1% so it's a bit of an eye opener for some of them to realise they are in fact in the 1%!
Do you know how I could approach the topic without making people feel guilty? It's really not my intention. People often think they or somebody they know are not wealthy by any means. I find the calculator really useful to illustrate but I don't want to make them feel guilty. Thanks for your help.

Sailtheworld

Thrugelmir said:

Sailtheworld said:

Thrugelmir said:

Ouch. This is going to cause a downward spiral. 

You make it sound like this is a bad thing - it isn't.

Most charities transfer wealth from rich to poor - NS&I were doing just the opposite.

Other deposit will substantially reduce their rates too. NSI is effectively saying we don't want your money to existing customers. The money has to flow somewhere else. That will be an enormous amount of money looking for a new home in a short space of time. 

The last thing the government want to do is to have to repay £160bn of debt - they very much want the money but just don't need to pay over the odds for it.

Although NS&I were distorting the market it's part of a trend so if there's a wall of money looking for a home there's nowhere to go when it comes to savings on deposit. 

Some people will increase spending and / or some will take increased risk but if the past is any guide to the future most people who like to keep money on deposit will just take whatever's on offer which might well be nothing.

Thrugelmir

Sailtheworld said:

Thrugelmir said:

Sailtheworld said:

Thrugelmir said:

Ouch. This is going to cause a downward spiral. 

You make it sound like this is a bad thing - it isn't.

Most charities transfer wealth from rich to poor - NS&I were doing just the opposite.

Other deposit will substantially reduce their rates too. NSI is effectively saying we don't want your money to existing customers. The money has to flow somewhere else. That will be an enormous amount of money looking for a new home in a short space of time. 

The last thing the government want to do is to have to repay £160bn of debt - they very much want the money but just don't need to pay over the odds for it.

There's obviously been a plan hatched in the Treasury.  Long dated Gilts are a cheaper financing option. Let inflation take care of the debt pile. 

RetSol

I find it odd that the new rate of return on PBs has been set at 1%.  That's probably going to look like a "market leading" rate itself pretty soon and benefits the "wealthy" (ie those with no need of a predicable or regular return) over others. 

Nick_C

Sailtheworld said:
Some people will increase spending... 

I think that's the plan. 

When people realise that money in the bank is losing value, they will be tempted to spend, perhaps bringing forward capital expenditure; home improvements, a new car, a new TV.  

This should help to support the economy, saving firms and jobs. 

This Government is going to try to spend its way out of recession. They need us to help. 

whitesmith

Is there not the other argument that if you suddenly find you are getting a lot less income (interest) then you cut back on your spending?