Savings during WW2

MouldyOldDough

What happened to personal savings in WW2 - Were they knabbed by the government to aid the "war effort" ?

Just slightly concerned at the possibility (however remote) of the Ukraine thing expanding and wondering what would happen to hard earmed savings ?

theoretica

People were encourage to save - as the Government wanted to borrow the money, and paid interest on it.  Premium Bonds probably count as an example today.

see https://en.wikipedia.org/wiki/National_Savings_Movement

MouldyOldDough

theoretica said:

People were encourage to save - as the Government wanted to borrow the money, and paid interest on it.  Premium Bonds probably count as an example today.

see https://en.wikipedia.org/wiki/National_Savings_Movement

I had forgotten about national savings - of course

So what would happen nowadays - should the government need money urgently ?

Companies have little savings after covid

penners324

MouldyOldDough said:

theoretica said:

People were encourage to save - as the Government wanted to borrow the money, and paid interest on it.  Premium Bonds probably count as an example today.

see https://en.wikipedia.org/wiki/National_Savings_Movement

I had forgotten about national savings - of course

So what would happen nowadays - should the government need money urgently ?

Companies have little savings after covid

The government will issue more gilts and bonds if it needs money.

Ie it borrows it.

Ebe_Scrooge

MouldyOldDough said:

theoretica said:

People were encourage to save - as the Government wanted to borrow the money, and paid interest on it.  Premium Bonds probably count as an example today.

see https://en.wikipedia.org/wiki/National_Savings_Movement

I had forgotten about national savings - of course

So what would happen nowadays - should the government need money urgently ?

Companies have little savings after covid

The usual way would be to issue gilts (government bonds).  Basically you lend money to the government, they pay you interest, and repay the capital upon maturity.  It's a little unusual for an individual to buy a gilt - more commonly they're bought by the likes of investment firms (your pension may well have gilts included as part of its portfolio), or by companies.  They're seen as a relatively safe (if comparatively low-paying) bet, because the chance of the UK (or American, or German, or French, or Canadian, etc.) governments going bust and not repaying you are slim in the extreme.  But that's the quickest and simplest way for a government to raise money when it needs it.

Albermarle

Although I believe that after WW2, the UK was close to not being able to replay its debts , which were huge.

DiamondLil

I seem to remember my parents talking about War Bonds being issued in WW1 and WW2.

I have a letter written in 1944 by my gran to my father who was overseas in which she was telling my dad all their Post Office Savings account numbers because she feared that the V2s would hit the house and if dad came home alive he'd know the account numbers if the family perished. They lived in East London very close to the docks.

tebbins

No that didn't happen, a lot of normal life carried on. You can read annual reports of Unilever for example in the war years.
If that had happened, there would have been runs on all banks, the £ would have become worthless as the very institutions that control and maintain it - i.e. the British state - could not be trusted on their promises.
Countries are perfectly capable of raising funds by borrowing from their citizens. Any such tax would necessarily have to get through Parliament and, while we have the bank levy and implicit wealth taxes such as capital gains and council taxes, and may have more wealth-based taxes in future, the government will not, and will not be able to arbitrarily pinch money from your bank account.

Thumbs_Up

Albermarle said:

Although I believe that after WW2, the UK was close to not being able to replay its debts , which were huge.

Post war, the Americans under the Marshal Plan along with the Canadians lent us $5 billion with favourable repayment conditions.

All debts from WW1 and WW2 are now paid off – a clean slate. Fast forward, now we have to pay back the covid bill.

Thrugelmir

MouldyOldDough said:

What happened to personal savings in WW2

In the blitz people lost their homes, their lives and in many cases their employment. Personal savings probably weren't high on the list of concerns with the Germans only a few miles away across the Channel. My late Grandmother spoke vividly of listening to the Doodle Bugs flying over and waiting for the buzz to stop. Which meant only one thing.........

Nebulous2

MouldyOldDough said:

theoretica said:

People were encourage to save - as the Government wanted to borrow the money, and paid interest on it.  Premium Bonds probably count as an example today.

see https://en.wikipedia.org/wiki/National_Savings_Movement

I had forgotten about national savings - of course

So what would happen nowadays - should the government need money urgently ?

Companies have little savings after covid

It depends on the company - some of them have a great deal of capital, and have struggled to find ways to employ it, so they distribute it to their shareholders.