Final Nail in the Coffin for Savers

  oresome 14:30 05 Feb 2009
Locked

The Bank of England base rate has been cut today to an all time low, leaving many savers with virtually no income from their savings.

Meanwhile many borrowers are better off by hundreds of pounds per month.

As a result of the cut, which will take effect from next month, homeowners with a £150,000 variable rate mortgage pegged at the base rate will see their monthly payments drop by £45 to £565.

Those paying only the interest on their mortgage deal will see an even bigger drop from £187 a month to £125. Only 10 months ago they were paying £687 a month.

Talk of a tax reduction in the Budget on savings interest is of no value whatsoever when there is no income to tax.

  newman35 15:04 05 Feb 2009

Certainly has proved how worthwhile it has been to save and not borrow!

  Pine Man 15:11 05 Feb 2009

There are seven times more savers than borrowers and already the building societies are getting concerned about where they are going to find the money (from savers) to give to those requiring a mortgage!

  newman35 15:32 05 Feb 2009

Well they'll be getting less from me, as at these rates there are better options - in fact may as well keep it under the bed as cash!

  GANDALF <|:-)> 15:42 05 Feb 2009

'Those paying only the interest on their mortgage deal will see an even bigger drop from £187 a month to £125. Only 10 months ago they were paying £687 a month.'...this is a disaster waiting to happen.

G

  gardener 16:30 05 Feb 2009

I read that some people are calling for 0% interest. Surely the banks would have no incentive to lend if they were'nt getting a return? Or am I missing something?

  bri-an 16:57 05 Feb 2009

Might be good to organise a Savers Union if there's so many of us, and threaten to take savings out of building societies. No loss to us if rates are at zero.
Lets see banks make their profits from loans then.

In US, any bank that got gov money has a ceiling on pay - our lot refuse to even consider it.
Bankers.....!

  Forum Editor 17:26 05 Feb 2009

we need people to spend money, not to save it.

  Pine Man 18:40 05 Feb 2009

Three and a half percent has failed so far so what difference will another half of one per cent make?

newman35
'in fact may as well keep it under the bed as cash'

..and lose the 1% as well!

  bri-an 18:45 05 Feb 2009

So shouldn't all us savers take all our money out of banks, as I suggested, and blow it all - on holidays etc?

But how do people then get mortgages?

  brindly 18:48 05 Feb 2009

In order to speed our economy's recovery

we need people to spend money, not to save it.

So, do you think we savers don't spend anything then? Why do we save? so we can spend a little more than the pathetic state pension allows and perhaps enjoy our old age. I am all for taking our money out of the banks and building societies but you saw what happened when they did that at the Northern Rock, they didn't have the cash. it's all only on paper!!!!!

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