Protecting savings against inflation
Discussion
PurpleMoonlight said:
How does that work?
Your ISA is instant access? 3-year and 4-year ISAs pay higher amounts?HTB is a 4-5 year product, I think?
Someone who is prepared to lock money away for a longer period will get a higher rate (recognising expected future rate increases).
Edited by sidicks on Monday 2nd October 16:22
sidicks said:
Your ISA is instant access? 3-year and 4-year ISAs pay higher amounts?
HTB is a 4-5 year product, I think?
Someone who is prepared to lock money away for a longer period will get a higher rate (recognising expected future rate increases).
HTB is instant access isn't it?HTB is a 4-5 year product, I think?
Someone who is prepared to lock money away for a longer period will get a higher rate (recognising expected future rate increases).
Edited by sidicks on Monday 2nd October 16:22
alfaspecial said:
I think the OP's point was that he is getting interest of .5% when inflation is 3.9%. That is a rip-off - any money held by a bank should not be worth less than the initial deposit, in real terms - after all it's not like the bank HAVE to lend it out at a loss is it?
A 'fair' rate of interest inflation plus 1 or 2% is hardly usury.
The economic term for Government policies since 2007, under Labour then Conservative/Liberal Democrat, now Conservative / DUP is a variant of FINANCIAL REPRESSION (look it up) http://lexicon.ft.com/Term?term=financial-repressi...
Only at the present time not only are the Government financing state expenditure with savers funds but have set in chain a series of deliberate policies where savers subsidise (Ex PM's / Chancellors etc ) 'friends in the city'! Which is why the Governor of the BoE is a banker (Goldman Sachs) but there is NO representation for the very people who's money is in the system. But that requires a political solution.
By way of practical advice moneysupermarket.com and the like have best buy tables.
https://www.moneysupermarket.com/savings/results/?...
Not perhaps a 'fair' return but better than 0.5%
Well given each and everyone's rate of inflation is different it's impossible to say. A 'fair' rate of interest inflation plus 1 or 2% is hardly usury.
The economic term for Government policies since 2007, under Labour then Conservative/Liberal Democrat, now Conservative / DUP is a variant of FINANCIAL REPRESSION (look it up) http://lexicon.ft.com/Term?term=financial-repressi...
Only at the present time not only are the Government financing state expenditure with savers funds but have set in chain a series of deliberate policies where savers subsidise (Ex PM's / Chancellors etc ) 'friends in the city'! Which is why the Governor of the BoE is a banker (Goldman Sachs) but there is NO representation for the very people who's money is in the system. But that requires a political solution.
By way of practical advice moneysupermarket.com and the like have best buy tables.
https://www.moneysupermarket.com/savings/results/?...
Not perhaps a 'fair' return but better than 0.5%
I know due to changing our spend profile be it changing suppliers using less downgrading eating out less etc our family inflation is negative.
Might I suggest OP looks at his own cost base.
sidicks said:
Badda said:
I was out.
I didn't say there were any so why are you asking me to provide some?
So you’re criticising the banks for not providing something that doesn’t actually exist?I didn't say there were any so why are you asking me to provide some?
That makes perfect sense...
among other things I'm critical of banks having SVRs of 4-5% on ultra safe, low LTV mortgages whilst offering up .25-.5% savings rates. Smart-arse comments regarding someone's terminology of how they see the sector grate too.
As is seen on these forums a lot, people think an ISA is an ISA is an ISA, proof positive that the general population are poorly informed when it comes to savings. So when they do ask about stuff you (and others) do day to day, in a specific finance forum, try and show a little humility and understanding would you?
Badda said:
Please stop with the sarcasm, it's really childish and paints you in a poor light.
among other things I'm critical of banks having SVRs of 4-5% on ultra safe, low LTV mortgages whilst offering up .25-.5% savings rates. Smart-arse comments regarding someone's terminology of how they see the sector grate too.
But you're comparing apples and pears and if you can't see that then there's no point in trying to discuss this with you.among other things I'm critical of banks having SVRs of 4-5% on ultra safe, low LTV mortgages whilst offering up .25-.5% savings rates. Smart-arse comments regarding someone's terminology of how they see the sector grate too.
Making bold claims about banks 'ripping people' off because they can't provide a risk-free return than exceeds inflation is total nonsense, if you don't understand that no such asset exists!
Presumably you also think that Ford are 'ripping people off' because they don't offer a Mondeo that does 0-60mph in 2.5s whilst also providing 150mpg?
Badda said:
As is seen on these forums a lot, people think an ISA is an ISA is an ISA, proof positive that the general population are poorly informed when it comes to savings. So when they do ask about stuff you (and others) do day to day, in a specific finance forum, try and show a little humility and understanding would you?
When people ask genuine questions then they receive genuine and helpful answers.When people post absolute nonsense about 'ripping customers' off, when they demonstrably don't understand the things they are talking about, then they receive short shrift. Sorry.
Edited by sidicks on Monday 2nd October 16:55
sidicks said:
Badda said:
Please stop with the sarcasm, it's really childish and paints you in a poor light.
among other things I'm critical of banks having SVRs of 4-5% on ultra safe, low LTV mortgages whilst offering up .25-.5% savings rates. Smart-arse comments regarding someone's terminology of how they see the sector grate too.
But you're comparing apples and pears and if you can't see that then there's no point in trying to discuss this with you.among other things I'm critical of banks having SVRs of 4-5% on ultra safe, low LTV mortgages whilst offering up .25-.5% savings rates. Smart-arse comments regarding someone's terminology of how they see the sector grate too.
Ten years ago the base rate was 5% and the average SVR was 7%.
Look at what SVRs are roughly now:
against a base rate of pretty much zero. The spread between lending and borrowing has changed significantly over this time. Yes these are apples and oranges but they were back then too so I'm actually comparing two markers.
sidicks said:
Making bold claims about banks 'ripping people' off because they can't provide a risk-free return than exceeds inflation is total nonsense, if you don't understand that no such asset exists!
It was a bold claim, it was a throwaway comment by the OP that's been made too much of. Badda said:
Ten years ago the base rate was 5% and the average SVR was 7%.
Look at what SVRs are roughly now:
against a base rate of pretty much zero. The spread between lending and borrowing has changed significantly over this time. Yes these are apples and oranges but they were back then too so I'm actually comparing two markers.
Currently base rates are at an all time low, but are expected to increase over time - that's why 5-year ISAs can offer 3%.Look at what SVRs are roughly now:
against a base rate of pretty much zero. The spread between lending and borrowing has changed significantly over this time. Yes these are apples and oranges but they were back then too so I'm actually comparing two markers.
You're also missing the higher capital charges / costs incurred by banks as a result of increased bank legislation.
Regardless, if you think that because banks are charging x% on (not risk-free) long-term borrowing, they can also pay x% on (risk-free) short-term saving then you are missing the fundamental point!
Edited by sidicks on Monday 2nd October 17:13
PurpleMoonlight said:
No, it's true.
I have half a mind to take the money out and scratch an Aston Martin itch I have had for years instead.
It would be much more accurate to say that short-term investment rates aren't attractive at the moment, so you might as well use the money in a different way.I have half a mind to take the money out and scratch an Aston Martin itch I have had for years instead.
v8, Vantage, DB9?
sidicks said:
Regardless, if you think that because banks are charging x% on (not risk-free) long-term borrowing, they can also pay x% on (risk-free) short-term saving then you are missing the fundamental point!
The exact reason I showed the trend over the last ten years was to deflect that comment. Edited by sidicks on Monday 2nd October 17:13
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