Protecting savings against inflation

[alfaspecial]

TooMany2cvs said:

It's only a "rip-off" if the OP had no choice but to invest his money there. Clearly, he did - so it's not a rip-off, just a very poor choice on his part.

It is a "rip-off" because QE, Funding for Lending plus a policy of base rate at almost 16th the rate of inflation is financial collusion, between the banks and the State, on an unprecedented level.

There are no 'safe' easy access savings from a main stream lender that even approach the rate of inflation. In a true free market economy the banks and the zombie businesses relying on (in real terms) below inflation cost should have been allowed to fail. The policies we have are those of Japan for the last 20 years -

At the moment property 'investors' and share 'speculators' are being financed by savers. Please don't say "take a risk" - not all savers are speculators - most just want a 'fair' return.
.

[Badda]

TooMany2cvs said:

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

It's only a "rip-off" if the OP had no choice but to invest his money there. Clearly, he did - so it's not a rip-off, just a very poor choice on his part.

So what? Things aren't a rip-off if you choose to do them? That doesn't make any sense at all.

Not sure why you're defensive over the FS industry - perhaps you work in it or are particularly interested in it (or just like telling people where they're wrong) but FWIW I think the returns on savings accounts and cash ISAs are awful too at the moment as they bear little relation to the bulk of lending instruments out there.

[sidicks]

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.

Except that is nonsense. What do you think the bank will invest in that will have sufficient liquidity and guarantee to pay the customer whenever they demand it?

alfaspecial said:

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%

Entirely fair, given the assets that banks available to banks to invest in given the nature of the customer liability.

And obviously a long term investment will have a higher return, so comparing instant acesss and 5-year strategies is a bit 'apples and pears'!

[sidicks]

Badda said:

So what? Things aren't a rip-off if you choose to do them? That doesn't make any sense at all.

Not sure why you're defensive over the FS industry - perhaps you work in it or are particularly interested in it (or just like telling people where they're wrong)

Or maybe he understands much more about it than you seem to!

Badda said:

but FWIW I think the returns on savings accounts and cash ISAs are awful too at the moment as they bear little relation to the bulk of lending instruments out there.

Please explain what you are comparing with cash ISAs (and why)?

Edited by sidicks on Monday 2nd October 15:11

[sidicks]

alfaspecial said:

It is a "rip-off" because QE, Funding for Lending plus a policy of base rate at almost 16th the rate of inflation is financial collusion, between the banks and the State, on an unprecedented level.

There are no 'safe' easy access savings from a main stream lender that even approach the rate of inflation. In a true free market economy the banks and the zombie businesses relying on (in real terms) below inflation cost should have been allowed to fail. The policies we have are those of Japan for the last 20 years -

What 'safe assets' do you expect banks to invest in to provide this return for customers?

alfaspecial said:

At the moment property 'investors' and share 'speculators' are being financed by savers. Please don't say "take a risk" - not all savers are speculators - most just want a 'fair' return.
.

If you want a risk-fee return then you should expect 'risk-free' rates!

[Badda]

sidicks said:

Badda said:

So what? Things aren't a rip-off if you choose to do them? That doesn't make any sense at all.

Not sure why you're defensive over the FS industry - perhaps you work in it or are particularly interested in it (or just like telling people where they're wrong) but FWIW I think the returns on savings accounts and cash ISAs are awful too at the moment as they bear little relation to the bulk of lending instruments out there.

Please explain what you are comparing with cash ISAs (and why)?

Loans, secured loans, mortgages etc. OK?

[PurpleMoonlight]

TooMany2cvs said:

It's only a "rip-off" if the OP had no choice but to invest his money there. Clearly, he did - so it's not a rip-off, just a very poor choice on his part.

They are all a rip off.

None pay anywhere close to inflation, hence the thread.

I think I may gamble on Premium Bonds next year. At least there is the potential to get more than 0.5%.

[sidicks]

Badda said:

Loans, secured loans, mortgages etc. OK?

So you can't understand the difference between:
A) An instant access, zero risk cash ISA
B) a risky, long-term loan or mortgage?

Who is taking the risk on default on the loans / mortgages?

Edited by sidicks on Monday 2nd October 15:16

[sidicks]

PurpleMoonlight said:

They are all a rip off.

None pay anywhere close to inflation, hence the thread.

How can a bank invests to guarantee achieving inflation with no risk to capital?

Purple Moonlight said:

I think I may gamble on Premium Bonds next year. At least there is the potential to get more than 0.5%.

And a much higher likelihood of getting less!

[TooMany2cvs]

Badda said:

So what? Things aren't a rip-off if you choose to do them? That doesn't make any sense at all.

If it's such a terrible rip-off, don't do it.

It's not rocket science.

Badda said:

Not sure why you're defensive over the FS industry

Where on earth have I defended rates like that?

Badda said:

perhaps you work in it

<chuckle>

Badda said:

...(or just like telling people where they're wrong)

Only when they are.

Badda said:

but FWIW I think the returns on savings accounts and cash ISAs are awful too at the moment...

So do I. But I wouldn't whinge if I chose to put money into a cash ISA that paid SO FAR below easily available cash ISA rates.

Edited by TooMany2cvs on Monday 2nd October 15:18

[Badda]

sidicks said:

Badda said:

Loans, secured loans, mortgages etc. OK?

So you can't understand the difference between:
A) An instant access, zero risk cash ISA
B) a risky, long-term loan or mortgage?

Hmm, ok.

I do hate your brand of smug sarcasm. It's really distasteful for someone who flogs financial products.

Please explain the exact risk profile of a low LTV mortgage on a surveyed property.

[sidicks]

Badda said:

I do hate your brand of smug sarcasm. It's really distasteful for someone who flogs financial products.

Please explain the exact risk profile of a low LTV mortgage on a surveyed property.

1. I don't flog financial products
2. I can afford to be smug when people make silly comments on things they clearly don't understand.
3. A property crash, late or non payment of monies owed
4. The term of the asset is entirely unrelated to the term of the liability
5. There is no inflation guarantee.

Please tell where I can find zero risk, instant access assets that pay more than inflation. Thanks.

[Badda]

TooMany2cvs said:

Some words

I'd consider myself to be a reasonably astute investor, I've been doing it for many years. However, I'm self aware enough to realise that the amount of products and services available to the public at large is baffling to many and that a lot of people see it as 'they're all much of a muchness' and that rates don't vary much. Before you smugly jump in, I know things aren't like that, I'm saying that to some people it's not their big thing so have a bit of humility and self awareness when you're talking to people rather than belittling them or assuming they're thick because you know more. It's pathetic.

[Badda]

You might as well read that too sidney

[sidicks]

Badda said:

You might as well read that too sidney

You should try and understand what you are talking about before trying to be clever!

Still waiting for your risk-free, instant access assets that pay inflation...

[TooMany2cvs]

Badda said:

However, I'm self aware enough to realise that the amount of products and services available to the public at large is baffling to many and that a lot of people see it as 'they're all much of a muchness' and that rates don't vary much.

If only there was a wide range of consumer websites that allowed somebody to check that...

Perhaps they could even be advertised on TV over the course of a decade or so using cute anthropomorphised animal characters to stick in the memory? Nah, nobody'd never ever manage to do that so successfully to make a catch-phrase become a widespread part of the language, surely?

Or is it... simples?
https://money.comparethemarket.com/savings-account...

[PurpleMoonlight]

TooMany2cvs said:

Or is it... simples?
https://money.comparethemarket.com/savings-account...

Why are Help to Buy ISA's paying double (or in my case quadruple) the standard ISA rates?

[sidicks]

PurpleMoonlight said:

Why are Help to Buy ISA's paying double (or in my case quadruple) the standard ISA rates?

Subsidised products. But expected to have an increasing investment over a long-term.

Edited by sidicks on Monday 2nd October 15:41

[PurpleMoonlight]

sidicks said:

Loss-making, subsidised products.

Subsidised by other savers no doubt.

[sidicks]

PurpleMoonlight said:

Subsidised by other savers no doubt.

It's not directly comparable to your product - apples and pears!

What is the balance on your ISA and how long can you lock it away for?