NS&I claim "we're all about saving"

Bravepants

A._Badger said:

snigehere said:

It seems NS&I have some missing text on their web page.. it says "Saving. Nothing more, Nothing less" ... its missing the third part of the message ... Saving. Nothing more, Nothing less, Nothing in return"

I just received a marketing mail from NS&I with the subject "we're all about saving" and inside they claim "We're focused on savings".  I don't know how NS&I have the audacity to send such a mail having slashed savings rates to only just above zero from 24 november, well below many other providers.

The only savings on offer is the saving on paying any kind of interest.

Agreed. What worries me greatly is that it shows the government has abandoned any concept of encouraging people to save. This would be confirmed by a switch to negative interest rates, designed to nudge people into spending whatever they have and borrowing more..
While in the short term under current circumstances this may be deemed 'a good thing' (at least by Keynesians) in the long term a population that doesn't save for its own future is always going to be reliant on the government at one stage or another and I don't feel that is at all healthy.
Once lost, the 'savings habit' could take decades to re-learn.
. 


 

I don't think the plan is to impose negative interest rates on the general public in savings accounts. Surely, the term "negative interest rates" refers to those rates charged by the Bank of England to retail banks to hold those banks' funds. The idea being that this encourages retail banks to lend their cash out and not keep it on deposit with the BoE, thus boosting the economy.

steampowered

Unless we are talking about small amounts of money or money needed in the short term, saving into savings accounts is a mugs game. For anything long term you should really be investing.

With a savings account, all you are really doing is letting the bank invest your money and letting them keep most of the profit - while the capital value of your savings is being reduced each year by inflation. 

A._Badger said:
Agreed. What worries me greatly is that it shows the government has abandoned any concept of encouraging people to save. 

The government does not set interest rates. The Bank of England sets interest rates. The Bank of England was made independent in 1998 precisely to avoid this sort of short term politically driven meddling with interest rates.

whitesmith

It is useful to differentiate between saving - to build up some capital for a rainy day, to protect yourself against financial shock, to buy something special etc - which you are certainly encouraged to do - and getting meaningful interest on those savings - which you won't for the forseeable future.

Eco_Miser

NS&I are all about saving, not investing, despite their name.

They are focussed on saving, not paying interest, and allow the accumulation of several million pounds with a Government guarantee, as opposed to £85,000 with an FSCS guarantee that banks and other financial institutions offer.

Traditionally, they offer lower interest but higher security than banks, and it's just been the rapid drop of other interest rates that made them market leading for a few months. The situation is back to normal now, though with lower rates.

So their marketing is correct.

Even with zero interest, I'd still rather have savings than not.

Eco_Miser

steampowered said:

Unless we are talking about small amounts of money or money needed in the short term, saving into savings accounts is a mugs game. For anything long term you should really be investing.

Yes, but 'long term' should be ten years or more. That leaves lots of money that might be needed this year, next year, in nine years time, that needs to be squirrelled away safely, and there's nowhere safer than NS&I.

Or you could invest for the medium term and hope there isn't a bear market when you need the money back.

A._Badger

steampowered said:

Unless we are talking about small amounts of money or money needed in the short term, saving into savings accounts is a mugs game. For anything long term you should really be investing.

With a savings account, all you are really doing is letting the bank invest your money and letting them keep most of the profit - while the capital value of your savings is being reduced each year by inflation. 

A._Badger said:
Agreed. What worries me greatly is that it shows the government has abandoned any concept of encouraging people to save. 

The government does not set interest rates. The Bank of England sets interest rates. The Bank of England was made independent in 1998 precisely to avoid this sort of short term politically driven meddling with interest rates.

And there are fairies at the bottom of my garden.

A._Badger

Bravepants said:

A._Badger said:

snigehere said:

It seems NS&I have some missing text on their web page.. it says "Saving. Nothing more, Nothing less" ... its missing the third part of the message ... Saving. Nothing more, Nothing less, Nothing in return"

I just received a marketing mail from NS&I with the subject "we're all about saving" and inside they claim "We're focused on savings".  I don't know how NS&I have the audacity to send such a mail having slashed savings rates to only just above zero from 24 november, well below many other providers.

The only savings on offer is the saving on paying any kind of interest.

Agreed. What worries me greatly is that it shows the government has abandoned any concept of encouraging people to save. This would be confirmed by a switch to negative interest rates, designed to nudge people into spending whatever they have and borrowing more..
While in the short term under current circumstances this may be deemed 'a good thing' (at least by Keynesians) in the long term a population that doesn't save for its own future is always going to be reliant on the government at one stage or another and I don't feel that is at all healthy.
Once lost, the 'savings habit' could take decades to re-learn.
. 


 

I don't think the plan is to impose negative interest rates on the general public in savings accounts. Surely, the term "negative interest rates" refers to those rates charged by the Bank of England to retail banks to hold those banks' funds. The idea being that this encourages retail banks to lend their cash out and not keep it on deposit with the BoE, thus boosting the economy.

Inevitably, the setting of negative interest rates will have an effect on the general savings market. Whether it could make any more than the slightest difference to the economy is a matter of debate.  

whitesmith

NS&I used to be called Post Office Savings and then National Savings. Nothing about Investment.

Not sure they have anything to do with "investment" even now (despite having an Investment Account) but I am happy to be corrected.

Thrugelmir

snigehere said:

dunstonh said:

To be fair, NS&I offer savings products.   So, they are all about savings.   They cannot help the position on interest rates at this time.

Premimum bonds or junior isa.. the remainder are 0.15, 0.1 and 0.01  
Now.. maybe the other players in the market will also announce rate reductions in the coming weeks but so far ns&i are below others.. that does not seem to reflect a "focus on saving" 

Bank shareholders take all the risk and receive no dividends. Savers are rewarded for no risk. In fact borrowers incur the cost of the protection savers receive. There's no right to a return for nothing. 

steampowered

A._Badger said:

And there are fairies at the bottom of my garden.

The Treasury and the Bank of England have constant disagreements all of the time. The Treasury does not tell the Bank of England what to do on interest rates.