Savers and the interest rate cuts
Discussion
So lots of savers are up in arms about interest rate cuts, and throwing stats around about the ratio of savers to borrowers (conveniently ignoring the ratio of saving to borrowing in monetary terms).
There's complaints from people who use the interest from savings to fund their lifestyles. And complaints thyat because of low rates they are eating into the principle.
So what? What on earth is wrong with eating into the principle? What are you going to do with it anyway? It'll either get taken by the council to pay for old age care, or a large chunk will go in inheritance tax.
If you have £100K in savings and you are used to having £5k in income from it, then to maintain that income for the next 2 years (assuming rates stay low that long) then you'll be down to £90K on the principle. Is that such a big deal??
There's complaints from people who use the interest from savings to fund their lifestyles. And complaints thyat because of low rates they are eating into the principle.
So what? What on earth is wrong with eating into the principle? What are you going to do with it anyway? It'll either get taken by the council to pay for old age care, or a large chunk will go in inheritance tax.
If you have £100K in savings and you are used to having £5k in income from it, then to maintain that income for the next 2 years (assuming rates stay low that long) then you'll be down to £90K on the principle. Is that such a big deal??
Not exactly what your talking about but I find it frustrating as a regular guy with an average income who saves for a house, holidays, cars etc that interest rates are set incredibly low to counteract problems partially caused by people who have massively over extended themselves. There is always going to be a winners and losers with interest rates and people are entitled to be happy or annoyed at their financial situations.
ipitythefool said:
There's complaints from people who use the interest from savings to fund their lifestyles. And complaints thyat because of low rates they are eating into the principle.
silly f
kers, low rates mean the principle isn't shrinking in real value, high interest rates would be eating into it even moreI'm yet to see who these latest drops benefit.
I'm on a tracker mortgage I took out in Dec 2007 8bps above base.
Unfortunately I did not read every piece of small print but it has a 2.5% floor. Nationwide suck!
So not only is my online savings suffering, but I'm not benefiting on my mortgage either.
I'm on a tracker mortgage I took out in Dec 2007 8bps above base.
Unfortunately I did not read every piece of small print but it has a 2.5% floor. Nationwide suck!
So not only is my online savings suffering, but I'm not benefiting on my mortgage either.
ipotythefool - it's easy to understand why savers are really pissed off right now. All you have to do is save a large sum of money, and watch it earn less that 1% interest while inflation runs at about 5. Trust me, every time the news comes out that us savers are being punished to try and bail out those wkers that ran out of cheap credit it's another reason to hope they all suffer huge depreciation on their motors, and that their homes are reposessed, having failed to make payments on loans secured on them. That way, I can use my non intrest generating bank balance to get a decent gaff, and / or an upgrade to a mk2 996.
kers that ran out of cheap credit it's another reason to hope they all suffer huge depreciation on their motors, and that their homes are reposessed, having failed to make payments on loans secured on them. That way, I can use my non intrest generating bank balance to get a decent gaff, and / or an upgrade to a mk2 996.hugoagogo said:
ipitythefool said:
There's complaints from people who use the interest from savings to fund their lifestyles. And complaints thyat because of low rates they are eating into the principle.
silly fkers, low rates mean the principle isn't shrinking in real value, high interest rates would be eating into it even morebirdcage said:
I cant see why anyone with savings does not buy a buy to let with a decent yield on a offset mortgage at 6%...
We are thinking about buying a property to let out but aren't sure whether to buy outright or mortgage. Have read a bit about offset mortgages but don't really understand them. 
Also need to look into capital gains tax issues if we sell in say 5 years.
FrankDrebbin said:
ipotythefool - it's easy to understand why savers are really pissed off right now. All you have to do is save a large sum of money, and watch it earn less that 1% interest while inflation runs at about 5...
CPI was 3% in January, RPI was 0.1%.http://www.mortgagestrategy.co.uk/cgi-bin/item.cgi...
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