please empty your brain below
Me too.

But, since when have you had a minor drug habit? (cf "or a major drug habit"> ;)

Blue Witch | Homepage | 19.01.11 - 7:03 a.m. | #

What are you saving for? Your last shirt has no pockets.

So if you don't need the money, you could probably reduce your work to part-time and have more time to do all those interesting things you blog about. This would mean an unemployed person, desperate for a slice of cheese on his bread (or so), could be employed to do the rest of your work. His spendings would mean more demand, thus more employment, thus even more demand and employment. Until everybody has all material things he/she needs. And so they live happily ever after...

I agree that living above your means, living on debts is not a good idea in the long run, even when the interest rates are low. But living below your means isn't either.

Martin | 19.01.11 - 8:13 a.m. | #

Indeed, I suspect there's a large group of so far silent folk in this position now... :(

NiC | Homepage | 19.01.11 - 8:14 a.m. | #

The stock market's good at the moment - buying low. After I sacked my savings bank that's what I did and I'm quids in!

Richard | Homepage | 19.01.11 - 8:25 a.m. | #

DG, conventional bank/building society savings never beat the market. If interest rates go up, so that you can get, say 5% on the high street, there is good reason for that, and your money will still be losing value. Inflation etc. will see to that. Savings rates might look rubbish at the moment, but that just indicates that the money under your bed is not losing value quite as fast as usual.

Max Roberts | Homepage | 19.01.11 - 8:40 a.m. | #

Well said, DG. I am in the same boat myself, having saved hard and paid the mortgage off early (and now working part-time). I think the statistic is that savers outnumber borrowers by a ratio of 6:1, so we are indeed the silent (and shafted) majority.

Tiger Tim | 19.01.11 - 9:23 a.m. | #

Things are even harder for people who are saving hard and *don't* yet have a mortgage - the low interest rates mean it is taking longer to fund a deposit, plus for those of us who thought it would be sensible to save until you could afford to buy within your means (rather than greedily overborrow, which is one of the reasons we are in the mess we're in), now have to save even longer as banks are demanding much higher deposits. So yes, I'd rather like a rate increase too!

Geoff | Homepage | 19.01.11 - 9:29 a.m. | #

Oddly enough, if those who have money saved away started spending more of it, in ways that put it back into the economy (building extensions, going out more, going on holiday in this country etc.), then the economy would grow faster, easing inflationary pressure and allowing the bank to raise interest rates to a more beneficial level for those with money.

Just don't spend all of it...

Dave | 19.01.11 - 9:31 a.m. | #

I have a solution. It's long winded, but if you can get an Australian Passport, then open an Australian bank account and get 6.5% like I do

Simon | Homepage | 19.01.11 - 10:16 a.m. | #

As someone with a mortgage and with savings I'm torn. Reduced mortgage rates are allowing me to repay my mortgage a lot faster as the money I once spent is now going on overpayments.

I also have money in reasonably good savings accounts, but with inflation and the cost of living rising, we're all losing money on this one.

Andrew Bowden | Homepage | 19.01.11 - 10:42 a.m. | #

When I was getting 6.8% in icesave, that was being greedy.

Thankfully the UK gov gave me that money back so I'm now a borrower with a home.

Another Andrew | 19.01.11 - 11:18 a.m. | #

I would like interest rates to go up.
As the interest in bank saving went down I bought some fixed rate bonds, which pay a much higher interest which I have paid into my bank monthly. Hopefully when they come to full term and I can release the capital, interest rates on saving will be high again.

John | 19.01.11 - 11:33 a.m. | #

There may not be any pockets in the last shirt you wear, but having some capital before that point gives you more choices than you might have had without - private healthcare or NHS waiting lists? Eating or putting the heating on? That's what I'm saving for over the next 15 years - to get capital to live on in retirement.

Nails UK | 19.01.11 - 12:27 p.m. | #

So you bought a house years ago when it was possible to do so - but you'd rather that priviledge wasn't extended to other, younger folk?

I'm a saver too - but i'm also on the bottom rung of the housing ladder and what i'll save on a mortgage is more than I could ever earn (not having hundreds of thousands in the bank)

Surely a huge restricltion on easy credit is the answer to reckless consumer spending, not making it even more difficult to own a home.


kate | 19.01.11 - 12:47 p.m. | #

Simon's Australian solution is an interesting one. I'm assuming his savings are in Australian dollars. Even if he got no interest, over the past year his money would have increased in £ terms by about 10% becuase of currency changes.

But it could also have gone the other way, which would have more than wiped out the interest. Seems a rather risky way of investing in cash, no?

will | 19.01.11 - 1:19 p.m. | #

Ah, the paradox of thrift...

Dominic Self | Homepage | 19.01.11 - 2:08 p.m. | #

Couldn't agree more.

Oh how I would love for interest rates to rise. Just like Geoff, I don't own a house (but would like to), have saved every month yet still can't get onto the property ladder. And my friends who got 90% or 100% mortgages 4 or 5 years ago (I thought it was too risky) are currently enjoying tiny mortgage repayments.

A raise would be a double win for me, as low interest rates are keeping property prices artifically high. So I'd get more on my savings and might actually be able to buy more than a shoebox to live in.

Rob | 19.01.11 - 4:04 p.m. | #

lend us a fiver, geezer ?

Tristan | Homepage | 19.01.11 - 4:26 p.m. | #

I'm in the middle. We don't have credit card debt, but at the same time my husband hasn't had a pay increase or any bonuses for at least 5 years now, so we don't have any money left at the end of the month to save either! We're still living on the same monthly income we did in in 1999, but the prices have gone up!

CornishCockney | 19.01.11 - 4:59 p.m. | #

You also have to have a lot of sympathy for people who saved and intended to live off the interest as well as a pension. They can't even claim any benefits because of the savings - Katch 22

John Kelly | 19.01.11 - 5:30 p.m. | #

Be careful following the Australian$ ieda - lots of Japanese savers did well out of this until Autumn 08, when the yen soared against the dollar and they lost most of it.

On interest rates, low rates mainly reflect the fact that there is a savings glut and lack of investment opportunities. It's something you need to get used to - why should money return a positive interest rate - it's not obvious...

Matthew | 19.01.11 - 8:44 p.m. | #

Well, and the AUD isn't likely to go up a lot more than it has. Commodity based currencies do well in bad times. The CAD and AUD are both the highest they've been in quite some time. But when (if?) the economy gets rolling again you can expect them to fall back to "normal" levels. Much as I hear the Aussies sometimes crow about their tech industry, the Canadian one is a lot more developed and their currency suffers the same fate.

Chz | 20.01.11 - 8:43 a.m. | #

I'm 25 and I haven't got a mortgage. I've been saving since I was pretty young and now have 6 or so full ISAs earning 2-3%. Not exactly amazing, but alright.

Of course, if the interest rates were higher, I'd get more money in my savings and need to get less of a mortgage when I eventually get one...

As it stands my savings are going up at roughly the rate of inflation, which is hardly a good thing long term, and hardly a reward for saving, as the government would like us to.

Ed | 29.01.11 - 3:56 p.m. | #











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