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

cricidmuslibale

"Poor interest rates on their savings won't be one of them."  I'm afraid I simply have to disagree completely with this! If people haven't got into a 'regular' savings habit because they simply don't see the point in saving when the rates are so very low in historical terms as they are right now and then something(s) go(es) very wrong for them leading to (a) considerable expense(s) that they hadn't planned for at all, then unless have a very supportive family or very supportive friends to bail them out in time(s) of need they will have no option but to either (a) turn to the state (i.e. taxpayers' money) for assistance or (b) borrow money at exorbitant rates of interest that they may well not be able to afford to repay. In the case of (a) they become reliant on regular contributions from the state simply to live from day to day; in the case of (b) they get into massive amounts of debt (and a lot of trouble) and may well end up relying on the state to bail them out in the end.

Thus, when the prospect of poor interest rates on the savings of people who are not 'good savers' results in them not saving nearly enough on a regular basis or in some cases not saving at all, this could well lead down the line to a significant need for state financial support in (an) unexpected bad time(s) that simply wouldn't have been there had they saved enough money regularly enough in earlier, better days!

Another_Saver

cricidmuslibale said:

"Poor interest rates on their savings won't be one of them."  I'm afraid I simply have to disagree completely with this! If people haven't got into a 'regular' savings habit because they simply don't see the point in saving when the rates are so very low in historical terms as they are right now and then something(s) go(es) very wrong for them leading to (a) considerable expense(s) that they hadn't planned for at all, then unless have a very supportive family or very supportive friends to bail them out in time(s) of need they will have no option but to either (a) turn to the state (i.e. taxpayers' money) for assistance or (b) borrow money at exorbitant rates of interest that they may well not be able to afford to repay. In the case of (a) they become reliant on regular contributions from the state simply to live from day to day; in the case of (b) they get into massive amounts of debt (and a lot of trouble) and may well end up relying on the state to bail them out in the end.

Thus, when the prospect of poor interest rates on the savings of people who are not 'good savers' results in them not saving nearly enough on a regular basis or in some cases not saving at all, this could well lead down the line to a significant need for state financial support in (an) unexpected bad time(s) that simply wouldn't have been there had they saved enough money regularly enough in earlier, better days!

Ah, some good old fashioned nostalgia.

strawb_shortcake

Hmm I think you are overthinking it. You have savers and spenders, those that aren't in regular habits of saving may not even be able to explain to you what interest rates mean so would form no part of a decision to save or not.
I continue to save money so that I have a safety net should I need it, interest rates are negligible as my want to save remains. 

My job is fairly secure, but I am looking at a pay freeze for the foreseeable, so for myself I'm not going to spend for the sake of it, I have around £5k earmarked for holidays hopefully next year, money set aside for planned work on the home.
If on the other hand I had some decent pay rises coming my way then I may be more inclined to spend more.

Sea_Shell

Savers are from Mars, spenders are from Venus!!! *  

If they want to spend £500 on a handbag, or golf clubs or whatever, no % of interest rate is likely to persuade them to save that £500 instead!!



(* or the other way round, not inferring any gender here!!)

cricidmuslibale

Sea_Shell said:

Savers are from Mars, spenders are from Venus!!! *  

If they want to spend £500 on a handbag, or golf clubs or whatever, no % of interest rate is likely to persuade them to save that £500 instead!!



(* or the other way round, not inferring any gender here!!)

Purely amongst those I know (family, friends, acquaintances, colleagues) the phrase 'Savers are from Mars, Spenders are from Venus!' actually rings very true! But at least the Savers are willing to help the Spenders save more and vice versa.

jimjames

annabanana82 said:

Hmm I think you are overthinking it. You have savers and spenders, those that aren't in regular habits of saving may not even be able to explain to you what interest rates mean so would form no part of a decision to save or not.

When financial education is at this level I think you're absolutely right that interest rates play no part in these decisions
https://www.dailymail.co.uk/money/investing/article-9015129/Only-one-four-UK-savers-answer-three-money-questions-correctly.html