Tokenism for savers in the budget

Once again savers are expected to be grateful for a few scraps.  The extension of the £10,200 ISA allowance from retired people to all savers is welcome but hardly dents the problem of the meagre return on savings as a result of low interest rates.

All the focus tends to be on expenditure in the very short term.  Savings are thought to be a drag on the economy – hence the way that Government, in managing the crisis, has put the interests of savers last.  Its policy package has rewarded borrowers who have seen the cost of their borrowing fall by 50 per cent or more as a direct transfer from savers.

Savers have also had to contribute to the rising profits of the banks in the UK.  The Government perspective on savings has helped the banks to set a golden ratio between loan rates and savings rates.  Borrowers are charged more and savers get less.

Again and again the Government complains that the banks are not lending enough, but this is largely due to the fact that they do not have more to lend. … Continue Reading

Busting the myth that savings are a drag on the economy

Several events in the last few days have shown just how urgent it is to have a voice for savers. Investment Life and Pensions Moneyfacts showed just how the saver has been the forgotten person of the Noughties. Through lower fund values and reduced annuity rates pension, incomes have fallen 72 per cent. A £100 a month contribution for 20 years into a personal pension maturing in 2000 would have bought a man of 65 yearly income of £9,000: Today the same payments would buy a yearly income worth a little over £2,500 a year.

All the focus tends to be on expenditure in the very short term Savings are thought to be a drag on the economy—hence the way that government in managing the crisis has put the interests of savers last with a policy package which has rewarded borrowers who have seen the cost of their borrowing fall by 50 per cent  or more as a direct transfer from savers. Savers have also had to contribute to the rising profits of the banks such as Santander in the UK. … Continue Reading