Should there be a legal minimum interest rate for fixed rate accounts, for NS&I at least?

phillw

grumiofoundation said:
I have had people tell me LISA 'wasn't worth it' when they could have got £1000s free from the goverment?

As I repeatedly miss out on every single thing the government introduce because I'm either a year too old or bought a property a year too early, then I don't care if people are too lazy to take them up because I am still taxed to fund them.

phillw

AlanP_2 said:

To me it has absolutely nothing to do with whether it is in an account given the title Savings or Current by a bank, it is an indisputable fact as evidenced by the numbers.

Yeah, I do roughly the same thing. I go deep and include utility bill credits/debits, paypal balance, upcoming ebay fees, nectar points, gift cards,  the euros I have left from holiday & cash I have in my wallet.

For a start it means that I remember them all, but also I can't cheat and go for a month using nectar points to fund my shopping and then claim "I saved so much money this month" (instead I used nectar double up to buy replacements for some worn out kitchen stuff that I'd need to replace soon).

Eco_Miser

phillw said:

grumiofoundation said:
I have had people tell me LISA 'wasn't worth it' when they could have got £1000s free from the goverment?

As I repeatedly miss out on every single thing the government introduce because I'm either a year too old or bought a property a year too early, then I don't care if people are too lazy to take them up because I am still taxed to fund them.

In your position I would care, because the less 'free' money the lazy take up, the less I would be taxed to pay for it.

AlanP_2

phillw said:

AlanP_2 said:

To me it has absolutely nothing to do with whether it is in an account given the title Savings or Current by a bank, it is an indisputable fact as evidenced by the numbers.

Yeah, I do roughly the same thing. I go deep and include utility bill credits/debits, paypal balance, upcoming ebay fees, nectar points, gift cards,  the euros I have left from holiday & cash I have in my wallet.

For a start it means that I remember them all, but also I can't cheat and go for a month using nectar points to fund my shopping and then claim "I saved so much money this month" (instead I used nectar double up to buy replacements for some worn out kitchen stuff that I'd need to replace soon).

Don't bother with Paypal (as normally zero, although have a few quid there at the moment), would have no idea how to value Nectar points so ignore them (normally "spent" on the Christmas Shop). Gift cards and cash (UK & Foreign Exchange) do get included.

Sea_Shell

phillw said:

AlanP_2 said:

To me it has absolutely nothing to do with whether it is in an account given the title Savings or Current by a bank, it is an indisputable fact as evidenced by the numbers.

Yeah, I do roughly the same thing. I go deep and include utility bill credits/debits, paypal balance, upcoming ebay fees, nectar points, gift cards,  the euros I have left from holiday & cash I have in my wallet.

For a start it means that I remember them all, but also I can't cheat and go for a month using nectar points to fund my shopping and then claim "I saved so much money this month" (instead I used nectar double up to buy replacements for some worn out kitchen stuff that I'd need to replace soon).

I do the same.    The only assets not accounted for is the small change in the piggy bank and the credit on our phones.    

Every spend gets accounted for and allocated a category.

So anything bought with vouchers (thank you Santander and Amazon), is money actually spent.



ETA. Just realised I haven't included utility bill credit... goes off to update spreadsheet!!!


Woo hoo, am now £52 richer than I thought I was! 😁

cricidmuslibale

csgohan4 said:

Seems the OP thinks their entitled to high interests rates and wants the tax payer to fund this

if you want to grow your money much more than the interest rates being offered, put it in a fixed rate account, PB or in  a passive investment tracker and leave it

High interest rate? O.5%! You cannot be serious!!! (The suggestions in your 2nd paragraph are much more sensible though!)

cricidmuslibale

phillw said:

cricidmuslibale said:

My argument actually is that more people will be inclined to save when interest rates are higher. Very committed savers will still be inclined to save at the very lowest of interest rates but not all savers by any means fall into this category.

Anyone who has the choice between saving and spending and thinks "well at interest rates so low then I might as well just waste this money" is not worth rewarding. They will likely be parted from their money in other ways regardless.

Then they will likely be relying on state financial support a few years later which will cost taxpayers more in the long run!

cricidmuslibale

AlanP_2 said:

I look at our Balance Sheet on a monthly basis  (Investments - Savings/PBs - Current Accounts less CC balances / mortgage).

I compare the Assets (excluding Investments) with the CC balances and if the number has gone up I have increased my Savings, if it has gone down I have spent some Savings (or will have a week or so later when the CC DD goes out).

To me it has absolutely nothing to do with whether it is in an account given the title Savings or Current by a bank, it is an indisputable fact as evidenced by the numbers.

Actively making a decision on where to keep that money is where the account / asset choices are made, but until you have some Savings the interest rate on offer is of no relevance at all and in my opinion has no impact on whether people save or not.

cricidmuslibale - Are you saying that you are spending more than your income each month and hence not saving, or, are you saying that your income exceeds your expenditure (and so you are saving) but are getting veryt little retrurn on it?

Since COVID hit me very badly indeed as a freelancer I have been spending more than my income each month and hence eating into my savings capital as well as using up all the available interest. In 'normal times' my income just exceeds my expenditure but I usually rely on monthly income from savings interest to help pay the bills alongside earned income from work. Clearly if relatively 'normal times' return in a few months and I get roughly the amount of work I used to get before March this year, I will still be significantly poorer overall because any monthly income from savings interest will be much lower than it was before 24th November.

AlanP_2

cricidmuslibale said:

AlanP_2 said:

I look at our Balance Sheet on a monthly basis  (Investments - Savings/PBs - Current Accounts less CC balances / mortgage).

I compare the Assets (excluding Investments) with the CC balances and if the number has gone up I have increased my Savings, if it has gone down I have spent some Savings (or will have a week or so later when the CC DD goes out).

To me it has absolutely nothing to do with whether it is in an account given the title Savings or Current by a bank, it is an indisputable fact as evidenced by the numbers.

Actively making a decision on where to keep that money is where the account / asset choices are made, but until you have some Savings the interest rate on offer is of no relevance at all and in my opinion has no impact on whether people save or not.

cricidmuslibale - Are you saying that you are spending more than your income each month and hence not saving, or, are you saying that your income exceeds your expenditure (and so you are saving) but are getting veryt little retrurn on it?

Since COVID hit me very badly indeed as a freelancer I have been spending more than my income each month and hence eating into my savings capital as well as using up all the available interest. In 'normal times' my income just exceeds my expenditure but I usually rely on monthly income from savings interest to help pay the bills alongside earned income from work. Clearly if relatively 'normal times' return in a few months and I get roughly the amount of work I used to get before March this year, I will still be significantly poorer overall because any monthly income from savings interest will be much lower than it was before 24th November.

I sympathise, I know a couple of freelancers and they are in the same boat.

BUT - If savings rates were at 5%, having fallen from say 7% prior to 24/11 you would still be significantly poorer overall.

The % rate s not the fundamental issue for you by the sounds of it, it is just the fact that rates have fallen at the same point you have needed to withdraw and spend capital thus compounding the issue. In essence it is the Sequence of Returns risk that DC pension holders face (returns fall, more capital needs to be withdrawn to fund lifestyle and it can become a vicous circle).

Sailtheworld

cricidmuslibale said:

phillw said:

cricidmuslibale said:

My argument actually is that more people will be inclined to save when interest rates are higher. Very committed savers will still be inclined to save at the very lowest of interest rates but not all savers by any means fall into this category.

Anyone who has the choice between saving and spending and thinks "well at interest rates so low then I might as well just waste this money" is not worth rewarding. They will likely be parted from their money in other ways regardless.

Then they will likely be relying on state financial support a few years later which will cost taxpayers more in the long run!

People who throw themselves at the mercy of the state will do so for many reasons. Poor interest rates on their savings won't be one of them.