UK: How much do you have in savings and how pissed off are you?

[Peter]

Well?

I'm suspecting that given the demographics of this board, we will have few British homeowners, though there are a couple I can think of who might be.

Personally, I've around £10K in savings and am becoming more and more irked. Interest rate cuts have taken my highest yielding savings account down from a high of 6.41 to 4.50 today (this is against a drop in the BoE rate of 3.75% from its high). I also have one ISA with NS&I which might as well give me peanuts for interest (I bought into that ISA shortly after the Northern Wreck fiasco when I felt that saving with the government could be a good idea). The only good rate left in my savings is a Monthly Savings account I have with Barclays which pays 7.75%.
I am presently astonished at the government's fiscal and monetary policies - they are urging banks to help out homeowners by passing on interest rate cuts (as well as encouraging the BoE behind the scenes to keep up the cuts), whilst at the same time ignoring the reality that banks need savers' deposits to lend to homeowners. If banks/BSs cut rates on mortgages, they end up having to cut it for savers too, which drives away savers.

[Filuwaúrdjan]

Hmmmm... slightly under £2,000 in my building society account. Not really bothered what interest rates are; I mainly put money away in case I need it later (more proof that I'm actually a time-traveller from the late 19th century, haha) rather than to make money off interest. Though even if that weren't the case, I'd sort of assume that saving is a long-term investment and that as such there's no point being too irritated, but then I don't understand much about finance.

[afleitch]

My savings have dwindled because my take home pay has fallen and my outgoings have increases. I am intending next year to put more and more away; but we'll see how that goes. I am not going to spend my way out of a recession

Of course the BoE and the government are running out of options. You can only lower interest rates by so much and because of the inability of the government to confront essential truths about the state of the economy much earlier (including Darling's ludocrous growth forecasts at the last full budget) even 'managing decline' is becoming more and more diffucult

Of course I've been bleating about this for years.

Things 'up here' are a litle better, even with the HBOS saga (which is still ongoing). The Scottish economy is expected to shrink by significantly less, with the construction/mahufacturing economy staying fairly robust. The SNP have taken a bit of a kick in the gut re the polls, but lowering business rates, holding council tax steady for 3 years and decreasing public spending (basically doing everything they can do within the remit of devolved powers) appears to be helping.

There are hints that they may finally use the fought for, but so far unusued powers to cut income tax (basic rate only) by 1 or 2p in the pound in 2009. I would be interested to see how that would pan out.

[Peter]

Of course the BoE and the government are running out of options. You can only lower interest rates by so much and because of the inability of the government to confront essential truths about the state of the economy much earlier (including Darling's ludocrous growth forecasts at the last full budget) even 'managing decline' is becoming more and more diffucult.

One of the most significant problems surrounding this is the fact that there is very little room left for interest rate cuts - if we suffer significant deflation, there is nothing left in monetary policy that the BoE can use to encourage spending. We are then reliant on fiscal policy alone (lowering taxes/increasing govt spending) to turn around deflation and hence recession.

[afleitch]

Of course the BoE and the government are running out of options. You can only lower interest rates by so much and because of the inability of the government to confront essential truths about the state of the economy much earlier (including Darling's ludocrous growth forecasts at the last full budget) even 'managing decline' is becoming more and more diffucult.

One of the most significant problems surrounding this is the fact that there is very little room left for interest rate cuts - if we suffer significant deflation, there is nothing left in monetary policy that the BoE can use to encourage spending. We are then reliant on fiscal policy alone (lowering taxes/increasing govt spending) to turn around deflation and hence recession.

I have a tendency to believe the government may go to the country in 2009. While the economy will be at the fore, it is justified to say that neither the government nor the Conservatives have a strong policy to deal with the downturn - any political action is technically reactive to events. I tend to agree with your view on things here and I think deflation is a likely outcome.

Public services, regardless of who is in power will suffer. Labour's increases in public spending over the past two financial years and projected spending is actually pretty meagre and even below the Conservatives projected spending in 2005. They are on the whole similar to the piecemeal inflationary increases in spending under the last Conservative government (who, Labour spin aside, never actually cut spending in real terms) which is why the Conservatives had prepared to stick with them should they be elected. With that proposal now ditched, the Conservatives are likely to cut public spending should they be elected. To be in such debt as wave after wave of babyboomers retire puts us in an precarious position. Education and social security spending will probably take the brunt of any cuts.

From a purely personal point of view, I am increasingly unwilling to pay more and more into a welfare state that provides me, or people like me with little in return.

[Filuwaúrdjan]

We are then reliant on fiscal policy alone (lowering taxes/increasing govt spending) to turn around deflation and hence recession.

That, and hoping for things to turn around globally. Both have been obvious for a while now.

[2952-0-0]

At least none of you put your cash in Icelandic banks.

[afleitch]

At least none of you put your cash in Icelandic banks.

Not directly. Some local authorities did. Which of course is simply business, unless it has 'diminished returns' and embarrasses the government so then they use anti-terror legislation against a democratic maritime neighbour

[Peter]

At least none of you put your cash in Icelandic banks.

I very nearly did. At the time I was looking to invest in an ISA, Icesave were very competitive, and NS&I rates were equal to them. Despite the fact that my NS&I rate is crap, at least it is still there.

[??????????]

Wow, the interest rates are really high there on savings. You're lucky to get anything over 2% in a basic savings account over here. My money market is currently at 2.53% APY. Only millionaires have the rates you're talking about...unless of course you are one...then....

[Democratic Hawk]

What the bleeding hell are savings?