Got savings? Spend them then you selfish b*stards!

[nelly1]

http://www.telegraph.co.uk/finance/personalfinance...

Article said:

Older households could afford to suffer because they had benefited from previous property price rises, Charles Bean, the deputy governor, suggested.

They should "not expect" to live off interest, he added, admitting that low returns were part of a strategy.

Nice!

[NoelWatson]

nelly1 said:

http://www.telegraph.co.uk/finance/personalfinance...

Article said:

Older households could afford to suffer because they had benefited from previous property price rises, Charles Bean, the deputy governor, suggested.

They should "not expect" to live off interest, he added, admitting that low returns were part of a strategy.

Nice!

I made the same point to my Father (not about being forced to save, which is ridiculous), but that the oldies had done well out of the unprecedented bubble.

[cymtriks]

He's right. This man speaks the truth!

There are two possible scenarios:

• save money and get below inflation returns (see footnote). Spend carefully to ensure that you have enough when you are even older and a little left after that for your kids. Get bunged in a home. lose everything in care fees. Of course you'll end up in a much nicer home if you contribute... ...oh actually you get the same one.

• spend the money, be generous with your kids, treat the grandkids, don't waste any time worrying about saving for your old age, do it now. Get bunged in a home. Spend nothing on care fees. Of course if you leave nothing for your care you'll be bunged in a dormitory in the basement and live of soup and stale bread... ...Oh actually the state pays for you to get exactly the same as anyone else.

footnote: assuming you just leave your life savings in a below inflation rate building society account like 99% of little old ladies do.

[DonkeyApple]

NoelWatson said:

nelly1 said:

http://www.telegraph.co.uk/finance/personalfinance...

Article said:

Older households could afford to suffer because they had benefited from previous property price rises, Charles Bean, the deputy governor, suggested.

They should "not expect" to live off interest, he added, admitting that low returns were part of a strategy.

Nice!

I made the same point to my Father (not about being forced to save, which is ridiculous), but that the oldies had done well out of the unprecedented bubble.

I think it is the baby boomers on whom the spotlight should be falling.

[digger_R]

How about young(ish) people that thought it was absurd to mortgage themselves to the hilt and thus decided to save cash instead?

[anonymous-user]

digger_R said:

How about young(ish) people that thought it was absurd to mortgage themselves to the hilt and thus decided to save cash instead?

i think they have spent it all

the number of my friends who couldnt afford a deposit for a house becuase it was such a large lump sum was high so instead they kept spending smaller, but still considerable amounts, on things like holidays, deposits for cars, massive audio set ups etc.
a deposit for a house requires a big sum of money saved over a period of time, the luxuries only require minor saving and have immediate satisfaction!

[digger_R]

well I have enough to buy a medium sized house, or a good deposit on somewhere I could live long term - the old thing is I don't like the idea of committing myself to spending the next 5-10 yrs with a ball and chain,
so I guess I'll have to continue wandering the earth satisfying myself with loose women and narcotics - beats worrying about mortgage payments I guess

[Dracoro]

Seems an odd thing for Mervyn to say.

The more savings people spend, the less money the bank has. All these savings employ bankers etc. who invest the money and so on. They don't just leave it in a locked room.

[JagLover]

From an economic theory perspective he is of course at least partly right. The 'paradox of thrift' is that greater saving economy wide will reduce economic activity.

However we are in this mess because of too little saving and too much borrowing. It will be a long hard road to economic recovery and penalising the prudent may not be the way forward.

[nelly1]

Dracoro said:

Seems an odd thing for Mervyn to say.

The more savings people spend, the less money the bank has. All these savings employ bankers etc. who invest the money and so on. They don't just leave it in a locked room.

Quite.

Remember the queues at Bradford & Bingley?

[JMGS4]

nelly1 said:

http://www.telegraph.co.uk/finance/personalfinance...

Article said:

Older households could afford to suffer because they had benefited from previous property price rises, Charles Bean, the deputy governor, suggested.

They should "not expect" to live off interest, he added, admitting that low returns were part of a strategy.

Nice!

Even nicer !!!! when all they do is live off interest!!! Damned leeches...

[Fittster]

JagLover said:

From an economic theory perspective he is of course at least partly right. The 'paradox of thrift' is that greater saving economy wide will reduce economic activity.

From a Keynesian perspective. An Austrian would put the blame at the feet of the bankers.

[DonkeyApple]

I wonder if they just want to get the ever growing and ever stronger and healthier OAP community onto welfare as quickly as possible so they can be controlled and prevented from causing any trouble.

[BoRED S2upid]

This is what my 95 year old Nan does after seeing her savings make nothing she now doesn't save anything whatever she doesn't need to live off she gives to the grandkids. I hope she lives forever!

On a different note doesn't this apply to a lot of us? Im 32 was lucky enough to ride the property wave for 10 years giving me a very reasonable mortgage but no savings, if your going to earn nothing with your money in a bank then you may as well spend it no?

[Fittster]

BoRED S2upid said:

This is what my 95 year old Nan does after seeing her savings make nothing she now doesn't save anything whatever she doesn't need to live off she gives to the grandkids. I hope she lives forever!

On a different note doesn't this apply to a lot of us? Im 32 was lucky enough to ride the property wave for 10 years giving me a very reasonable mortgage but no savings, if your going to earn nothing with your money in a bank then you may as well spend it no?

On an asset bubble? The problem with cheap money is it tends to create bubbles then nasty busts.

[Jasandjules]

Dracoro said:

Seems an odd thing for Mervyn to say.

The more savings people spend, the less money the bank has. All these savings employ bankers etc. who invest the money and so on. They don't just leave it in a locked room.

Not really, he wants the money to stimulate the economy.

[Dracoro]

Jasandjules said:

Dracoro said:

Seems an odd thing for Mervyn to say.

The more savings people spend, the less money the bank has. All these savings employ bankers etc. who invest the money and so on. They don't just leave it in a locked room.

Not really, he wants the money to stimulate the economy.

But the money IS in the economy. It's being used for banks to invest and make money, to loan to people and so on.

[NoelWatson]

Fittster said:

JagLover said:

From an economic theory perspective he is of course at least partly right. The 'paradox of thrift' is that greater saving economy wide will reduce economic activity.

From a Keynesian perspective. An Austrian would put the blame at the feet of the bankers.

Central bankers?

[Fittster]

NoelWatson said:

Fittster said:

JagLover said:

From an economic theory perspective he is of course at least partly right. The 'paradox of thrift' is that greater saving economy wide will reduce economic activity.

From a Keynesian perspective. An Austrian would put the blame at the feet of the bankers.

Central bankers?

Central bankers (doing what their political masters find desirable).

[tinman0]

NoelWatson said:

I made the same point to my Father (not about being forced to save, which is ridiculous), but that the oldies had done well out of the unprecedented bubble.

Make the same point to my father and you'll have your head bashed through a wall.

He paid into his pension all his life, and it's so derisory after Winky raided pensions from 97 they are selling the family home to pay for their retirement. Strangely enough, they aren't going to spank the proceeds up a wall to ensure "the economy does well", but spend it wisely over the course of their retirement.

And yes, it is entirely selfish, and why shouldn't they be?