# Anyone on MINUS % bank rates yet



## Dave7 (25 Sep 2020)

Just had a letter from the TSB to inform me that I will now earn nil %.
Surely wont be long before it becomes negative %.
At my age and situation its not a great worry but there must be people this does adversely affect.


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## Drago (25 Sep 2020)

Aye, fee paying bank accounts look set the become the norm if this carries on.


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## Faratid (25 Sep 2020)

Highly unlikely that savings accounts will become negative %.........................but possible, and if they do, my money will be withdrawn and put under the mattress.
If there becomes no alternative to a fee paying bank account, I'll just have to take the view that if I want to use services such as DD, money transfers and so on, I'll have to pay for it. However, I will not pay a bank just to keep my money in, and would withdraw all sums as soon as they come in, and put them under the mattress also. 
As usual, it will be the less well off, struggling unemployed/hard working families with no savings, who will be worst hit.


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## Sterlo (25 Sep 2020)

I'm keeping a close eye on the savings rates. Still clinging on to 1% for now but at the first signs of a big drop, I'll put it all into Premium Bonds.


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## numbnuts (25 Sep 2020)




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## Milkfloat (25 Sep 2020)

Sterlo said:


> I'm keeping a close eye on the savings rates. Still clinging on to 1% for now but at the first signs of a big drop, I'll put it all into Premium Bonds.


Premium bonds have fallen though the floor as well. I don't see any safe products on the market offering much in the way of interest.


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## Sterlo (25 Sep 2020)

Milkfloat said:


> Premium bonds have fallen though the floor as well. I don't see any safe products on the market offering much in the way of interest.


I agree, but at least you've got a chance of winning something against a certainty of earning zero interest.


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## screenman (25 Sep 2020)

Faratid said:


> Highly unlikely that savings accounts will become negative %.........................but possible, and if they do, my money will be withdrawn and put under the mattress.
> If there becomes no alternative to a fee paying bank account, I'll just have to take the view that if I want to use services such as DD, money transfers and so on, I'll have to pay for it. However, I will not pay a bank just to keep my money in, and would withdraw all sums as soon as they come in, and put them under the mattress also.
> As usual, it will be the less well off, struggling unemployed/hard working families with no savings, who will be worst hit.



I would guess those last one's may have debts that will be easier to pay with lower interest rates, some of us can remember 15% mortgages, I would rather pay a small amount than have h good size lump of cash indoors.


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## Notafettler (25 Sep 2020)

one bank I can’t remember the name is charging negative Interest rates if you have more than £50,000 in your ordinary account..won't effect me.
From economic point of view negative Interest rates are recessionary and can lead to a depression. People have a tendency to take their money out and put it under the mattress. Which results in banks have less money to lend. As banks are the creators of money you could be looking at reduction in the money supply (monetarism?). 
Even with the vast amount of quantitative easing. If inflation becomes a negative people tend to stop buying because prices are falling. I have heard in the last recession someone say I'm holding on to replace my car as car prices are falling. 
Put all that together and you have spiraling deflation. The latter will always result in a depression as opposed to recession. 
Despite the silly views that the US depression was caused by the stock market crash, it was actually caused by the incompetent (extremely Conservative economic views) of the US government and bankers. Inflation 1930 -10%
1931 -10%
1932 -10%
UK inflation for the year to August CPI+H 0.5% down from 1.1% for the year to July.
CPI 0.2% in August 2020, down from 1.0% in July.
Bank of England going negative is very dodgy. They do agree with me on this!!!!


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## Notafettler (25 Sep 2020)

Faratid said:


> Highly unlikely that savings accounts will become negative %.........................but possible, and if they do, my money will be withdrawn and put under the mattress.
> If there becomes no alternative to a fee paying bank account, I'll just have to take the view that if I want to use services such as DD, money transfers and so on, I'll have to pay for it. However, I will not pay a bank just to keep my money in, and would withdraw all sums as soon as they come in, and put them under the mattress also.
> As usual, it will be the less well off, struggling unemployed/hard working families with no savings, who will be worst hit.


I just noticed part of my views being expressed above!


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## Mo1959 (25 Sep 2020)

screenman said:


> I would guess those last one's may have debts that will be easier to pay with lower interest rates, some of us can remember 15% mortgages, I would rather pay a small amount than have h good size lump of cash indoors.


I remember them too......that’s why I get hacked off when people complain about our generation having it so good! We paid hundreds per month and did without lots of things people take for granted now to get by.


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## Notafettler (25 Sep 2020)

Faratid said:


> usual, it will be the less well off, struggling unemployed/hard working families with no savings, who will be worst hit.


Its difficult to pay high amounts of money because of negative Interest rates.?..when you have got no money. 
Could you explain how 



Faratid said:


> families with no savings, who will be worst hit.


Could be worse off. Or is this just a new jerk statement!?


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## screenman (25 Sep 2020)

Mo1959 said:


> I remember them too......that’s why I get hacked off when people complain about our generation having it so good! We paid hundreds per month and did without lots of things people take for granted now to get by.



That may have been because a lot of things we went without had not yet been invented, but yes I agree it was not all roses that is for sure.


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## welsh dragon (25 Sep 2020)

Not yet but it won't be long. As I said on the old duffers thread now, if you have £1000 you will earn 0.10p in twelve months. It won't be long before they drop all rates to nil. Then negative interest rates might happen and you will have to pay the banks money to keep yours in their bank.


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## Notafettler (25 Sep 2020)

Mo1959 said:


> I remember them too......that’s why I get hacked off when people complain about our generation having it so good! We paid hundreds per month and did without lots of things people take for granted now to get by.


Half agree, even with low interest rates house prices have gone up so much that lots of the young can't get on the housing ladder to begin with. A product of population growth in a realively overpopulated country. 
Of course 3 million immigrants didn't worsen this!!


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## Electric_Andy (25 Sep 2020)

Not sure I'd want to keep my savings in cash at home, unless I had a very heavy duty safe, which would cost hundreds even thousands to buy. With the amount I have it would be false economy.

Likewise, I can see £5/month being charged for current accounts. After all, you have to pay for other services so it's not unreasonable to be charged for moving your money around securely.

I think more people with substantial savings are going to want to buy property in future, which will only make affordable housing more difficult.


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## fossyant (25 Sep 2020)

More old folk stashing cash. MIL used to keep doing it when at home - it caused us right headaches when the £10 changed, and now the £20's. 

Let's say she (MIL) wanted to squirrel it away for her funeral (still not dead, and not going to be any time soon) but it's left us with the headache of changing her £3k of old £20's without running it through the 'bank' ! 

None of us particularly want to pay £3k into our accounts then to take it all out again as cash. I read there is something like £50bn of 'cash' out of circulation and 'stashed'.


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## Notafettler (25 Sep 2020)

welsh dragon said:


> Not yet but it won't be long. As I said on the old duffers thread now, if you have £1000 you will earn 0.10p in twelve months. It won't be long before they drop all rates to nil. Then negative interest rates might happen and you will have to pay the banks money to keep yours in their bank.


They are at the end of the day supply a service. So charging is not totally unreasonable. Its the consequences of doing so that are the problem.


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## johnblack (25 Sep 2020)

1.4% fixed for two years is about the best you can hope for at the minute. its pretty awful.


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## ColinJ (25 Sep 2020)

screenman said:


> I would guess those last one's may have debts that will be easier to pay with lower interest rates, some of us can remember 15% mortgages,


I bought my house in 1988. Initially, I was paying 1/3 of my net income for my endowment policy and mortgage interest. In less than 6 months interest rates shot up and those costs rose to over 2/3 of my net income. 

I was desperately worried that the interest rate was not going to stop rising. Fortunately, it _did_, at about 15%!


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## ianrauk (25 Sep 2020)

ColinJ said:


> I bought my house in 1988. Initially, I was paying 1/3 of my net income for my endowment policy and mortgage interest. In less than 6 months interest rates shot up and those costs rose to over 2/3 of my net income.
> 
> I was desperately worried that the interest rate was not going to stop rising. Fortunately, it _did_, at about 15%!


Yep. A lot of us of our generation were in the same boat. It was tough going for a long while until they started coming down.


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## Notafettler (25 Sep 2020)

fossyant said:


> . I read there is something like £50bn of 'cash' out of circulation and 'stashed'.


Where!!!


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## Notafettler (25 Sep 2020)

johnblack said:


> 1.4% fixed for two years is about the best you can hope for at the minute. its pretty awful.


Not that awful if the following continues 
CPI+H 0.5% to August down from 1.1% for the year to July.
CPI 0.2% in August 2020, down from 1.0% in July.


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## johnblack (25 Sep 2020)

I worked for Nationwide at the time, peaked out at 15.4%, people in arrears got to the point that they were just posting their house keys back to us and walking away. Crazy times, I was able to buy my first house with a really cheap staff mortgage and houses were going dirt cheap at the time. How things change.


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## raleighnut (25 Sep 2020)

Just a thought,

If interest rates on savings are negative will banks be paying overdrawn customers money instead of charging us, after all we're storing their cash for them.


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## chris-suffolk (25 Sep 2020)

From what I understand from other countries, I think it's corporations that end up with negative rates. Private individuals may have a zero rate, but probably not actually negative. But who knows, the UK likes to do things differently.


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## Notafettler (25 Sep 2020)

raleighnut said:


> Just a thought,
> 
> If interest rates on savings are negative will banks be paying overdrawn customers money instead of charging us, after all we're storing their cash for them.


With credit cards they often do. Ie sainsbury gave me £30 if I made 4 purchases in there supermarket in 2 months and £6000 of spending at zero % interest for 17 months. Thats an example had a few of them over the years.


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## fossyant (25 Sep 2020)

Notafettler said:


> Where!!!



Not in my house anyway.....


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## classic33 (26 Sep 2020)

fossyant said:


> a time loop in which a time traveler who has gone into the past causes an event that ultimately causes the original future version of the person to go back into the past."]I read there is something like £50bn of 'cash' out of circulation and 'stashed'.


The Bank of England says there are around two billion of the notes* currently in circulation.

*This applies to the last paper £20 note issued.


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## Dave7 (27 Sep 2020)

ColinJ said:


> I bought my house in 1988. Initially, I was paying 1/3 of my net income for my endowment policy and mortgage interest. In less than 6 months interest rates shot up and those costs rose to over 2/3 of my net income.
> 
> I was desperately worried that the interest rate was not going to stop rising. Fortunately, it _did_, at about 15%!


I recall that clearly but from the 70s.
Our mortgage was only £6kish but I was not earning big money and was seriously worried


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## Eziemnaik (27 Sep 2020)

What ZIRP is certainly achieving is killing banks...
Hence more and more consolidation


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## oldworld (27 Sep 2020)

Slightly off topic but I think now interest rates have fallen lower and lower, until you really earn nothing from any savings, the idea of putting money into banks and building societies has become a bad idea.
What do people do with a fair bit saved over a life time? 
Many have bought second houses to rent out. 
This I'm sure has partly fuelled the house price boom. 
Personally I'd rather see fair interest rates and less increases in the price of housing.

My daughter has a £250000 mortgage at very low rates but I was better off paying 10% on a £ 18000 mortgage.
Even when it went up to 12% it was affordable, just.


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## screenman (27 Sep 2020)

Notafettler said:


> Half agree, even with low interest rates house prices have gone up so much that lots of the young can't get on the housing ladder to begin with. A product of population growth in a realively overpopulated country.
> Of course 3 million immigrants didn't worsen this!!




Go back far enough and most people decended from an immigrant.


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## screenman (27 Sep 2020)

ColinJ said:


> I bought my house in 1988. Initially, I was paying 1/3 of my net income for my endowment policy and mortgage interest. In less than 6 months interest rates shot up and those costs rose to over 2/3 of my net income.
> 
> I was desperately worried that the interest rate was not going to stop rising. Fortunately, it _did_, at about 15%!




No where near that percentage of income but I remember paying a £75,000 mortgage at that rate.


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## Notafettler (27 Sep 2020)

screenman said:


> Go back far enough and most people defended from an immigrant.


So?


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## Notafettler (27 Sep 2020)

oldworld said:


> ?
> Many have bought second houses to rent out.
> This I'm sure has partly fuelled the house price boom.
> .


No it has no effect on house prices as they are still providing a home for someone. While someone who buys a second home to use themselves is clearly reducing available homes and forcing up house prices.


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## oldworld (28 Sep 2020)

Notafettler said:


> No it has no effect on house prices as they are still providing a home for someone. While someone who buys a second home to use themselves is clearly reducing available homes and forcing up house prices.


I think that's what I'm saying. It's the price of houses not the scarcity that has been effected by buy to let.


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## Notafettler (28 Sep 2020)

oldworld said:


> I think that's what I'm saying. It's the price of houses not the scarcity that has been effected by buy to let.


A lot of people suggest that, but a landlord will not pay a market price. They need to get them below to make a decent profit.
Legal and General are moving into the rental market as away of paying annuities.
Renting at affordable rents (20% below local market rents). With housing association doing all the renting for a fee. They have a house building factory already up and running. I would be surprised if other annuity providers didn't do the same. Rents are more reliable compared to company bonds.


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## Electric_Andy (28 Sep 2020)

That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.


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## oldworld (28 Sep 2020)

Electric_Andy said:


> That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.


Unfortunately the money saved is losing value all the time. Interest rates don't keep up with inflation unless you take more risk with your money. Having tried shares and got burnt I steer clear.


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## Archie_tect (28 Sep 2020)

Crazy situation in the housing market for the last 20 years is the number of houses being bought up by people [usually] in the building trade who extend and upgrade as much as possible and then rent or sell on at even higher prices. House prices will remain unaffordable for first time buyers.

For the foreseeable future it will be cheaper to gain floorspace by extending, rather than moving which stagnates the housing market. The baby boomers whose parents bought their homes are now being left property which, as they have savings, they do up and many rent out again limiting the housing for sale which forces up house prices. This all passes the advantage to the main housebuilders who hold back the supply of new houses on their sites to prevent prices from falling.

Until the Government brings back housing grants for councils and housing associations to build social housing there will not be affordable housing in the UK.


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## Notafettler (28 Sep 2020)

Electric_Andy said:


> That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.





oldworld said:


> Unfortunately the money saved is losing value all the time. Interest rates don't keep up with inflation unless you take more risk with your money. Having tried shares and got burnt I steer clear.



Inflation is falling rapidly. I have a marcus account which is beating Inflation with ease but they are lowering interest rates constantly. It's instant access account. I can move money from Marcus to my bank account within minutes. 
You need to take into account what @Electric_Andy is doing. He is insuring himself against a sudden need for money, which could result in him borrowing at say 5% interest or more. Insurance cost money. In his case if he is Saving at zero % interest his cost are Inflation about 0.2% at the moment. A cheap form of insurance.


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## wafter (28 Sep 2020)

oldworld said:


> Slightly off topic but I think now interest rates have fallen lower and lower, until you really earn nothing from any savings, the idea of putting money into banks and building societies has become a bad idea.
> What do people do with a fair bit saved over a life time?
> Many have bought second houses to rent out.
> This I'm sure has partly fuelled the house price boom.
> ...


Totally agree. It's a two-front war re. IRs and housing; not only do low rates de-incentivise traditional investment (leading to people looking for alternatives such as the IMO criminal financiaisation of housing) but they also mean more can be borrowed for a given monthly repayment; further pushing up prices.. while we also have "help to buy" to thank for pushing the cost of new-builds to stratospheric levels; subsidising house-building political donors with taxpayers money while shafting the very people it's claimed to help 



Electric_Andy said:


> That said, I still don't see 0% interest on savings a bad thing. ok, it's nice to earn money on your savings but that's not really why I save. I save money because it gives me a sense of security if something unespected should happen in the future. I trust my savings far more then I do my NHS or state pension. At least (fingers crossed) I know my savings won't suddenly lose value, and I can access them whenever I want, whilst they are safe (again, fingers crossed) in the bank's hands rather than under my mattress or in stocks/shares that could plummet.





oldworld said:


> Unfortunately the money saved is losing value all the time. Interest rates don't keep up with inflation unless you take more risk with your money. Having tried shares and got burnt I steer clear.


Again, this. Interest is a defence against inflation (which in itself is a completely fabricated blag to keep people spending) - not a way to actively accrue wealth. Currency devaluation / debasement seems to be inevitable in the decline of every civilisation and ours appears to be no exception.

While never the optimist I firmly believe the current, clearly unsustainable global economic model is hurtling ever-more rapidly towards total collapse (accelerated by Covid and in out case Brexit as well, against a background of long-term decline) and IMO the sensible money is in damage-limitation rather than profit-seeking. 

As such I'll be buying gold this week FWIW; makes more sense to me than watching my FIAT paper becoming ever-more worthless (government inflation figures are laughable when you actually compare them to the 10-20% hikes many essential goods have seen in recent times), leaving it increasingly at risk in failure-prone banks or playing the loaded, grossly over-inflated stock market.


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## Archie_tect (28 Sep 2020)

Things will never change- those that have money will acquire more from those that have very little. Those that have it don't 'need' the surplus- it could be used for the greater good but it would appear hoarding money becomes an obsession.


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## Drago (28 Sep 2020)

Not only is it unsustainable, everyone knows it is unsustainable, but no one wants to fix it if it means they actually have to be the first to step off of the gravy train. It's akin to environmentalists telling us how we should protect the planet, while themselves being unwilling to give up their foreign homes and private jets.

There is a big upheavel coming, and the longer the financial model continues as it does, the more pain and disruption it will bring when it collapses. A new dark age beckons.


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## wafter (28 Sep 2020)

Drago said:


> Not only is it unsustainable, everyone knows it is unsustainable, but no one wants to fix it if it means they actually have to be the first to step off of the gravy train. It's akin to environmentalists telling us how we should protect the planet, while themselves being unwilling to give up their foreign homes and private jets.
> 
> There is a big upheavel coming, and the longer the financial model continues as it does, the more pain and disruption it will bring when it collapses. A new dark age beckons.


100%.


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## Archie_tect (28 Sep 2020)

Drago said:


> Not only is it unsustainable, everyone knows it is unsustainable, but no one wants to fix it if it means they actually have to be the first to step off of the gravy train. It's akin to environmentalists telling us how we should protect the planet, while themselves being unwilling to give up their foreign homes and private jets.
> 
> There is a big upheavel coming, and the longer the financial model continues as it does, the more pain and disruption it will bring when it collapses. A new dark age beckons.


It's unfixable without making everything dysfunctional... those who have are scared of those who haven't so control the system... and those who haven't are repressed by the system, which adapts, usually violently, to always have the upper hand


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## Notafettler (28 Sep 2020)

Drago said:


> Not only is it unsustainable, everyone knows it is unsustainable, but no one wants to fix it if it means they actually have to be the first to step off of the gravy train. It's akin to environmentalists telling us how we should protect the planet, while themselves being unwilling to give up their foreign homes and private jets.
> 
> There is a big upheavel coming, and the longer the financial model continues as it does, the more pain and disruption it will bring when it collapses. A new dark age beckons.


Definitely unsustainable has been so for.....1,000 of years. There has always been vast differences in peoples wealth. Why would anyone think it isn't sustainable all of sudden.


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## wafter (28 Sep 2020)

Notafettler said:


> Definitely unsustainable has been so for.....1,000 of years. There has always been vast differences in peoples wealth. Why would anyone think it isn't sustainable all of sudden.


Existing societies accepted that's 1000 years occupied exclusively by civilisations that have grown, prospered and subsequently collapsed; usually with the involvement of significant economic factors. The core tenet of modern capitalist economic policy is that growth can continue unabated perpetually. Surely it's patently obvious that such a concept is fundamentally flawed, simplistic in the extreme and that all growth must eventially reach limits.

A few factors that will likely contribute towards curtailing this mythical perpetual growth upon which our great economic ponzi scheme is predicated:

- Falling reproduction rates - people are having fewer kids; due to falling biological fertility, reduced prosperity and reduced desire. Fewer people means lower economic activity and less money to pay for the upkeep of the ageing previous generation / pay off the debt they've incurred.

- Ageing population - tied into the above; thanks to the high reproduction rates of the boomer generation and their enjoyment of improved healthcare, we'll have an increasingly top-heavy population with a growing proportion of dependants relative to those who can provide for them.

- Falling prosperity - the current youth generation is the first in living memory to be expected to have a lower quality of life than their parents.

- Spiralling debt - both public and private: It's clear from the fact that both private individuals and entire nations are having to rely increasingly on growing amounts of debt just to maintain the status quo, the current system cannot continue indefinitely as it is.

- Totally dysfunctional economic system - the relationships and rules upon which the economic model were initially based have long since gone out of the window thanks to increasingly desperate, unprecedented monetary policy to try and prevent the house of cards from collapsing - such as abandonment of the gold standard allowing massive money-printing / currency devaluation and negative interest rate policy.

- Environmental destruction - the continued squandering of natural resources in terms of both raw materials and energy, as well as the rampant destruction of the planet in the name of "profit" sees our environment becoming both more physically hostile and less productive; resulting in increased cost of, competition for / conflict arising from the growing scarcity of natural resources.

- The rise of artificial intelligence - the masses used to be an inconvenient necessity for the privileged few - increasingly this is not the case as AI makes growing numbers of people redundant and essentially unemployable. How do we suppose they're going to react when they can no longer feed themselves? What will be the knock-on effect of their dwindling income on the consumption our capitalist model so desperately relies upon?

- Growing wealth disparity - the system currently in place serves to exploit those with the least to further line the pockets of those with the most. This can only continue for so long until desparation leads to civil unrest and social change; for better or worse. Also, wealth concentration results in lower levels of spending; further cripping economic activity.

- Covid - we have a massively service-centric economy; much of which will be destroyed as people choose to opt out of this non-essential spending; either through fear of infection or dwindling disposible income.

- Brexit - we are a largely consumptive nation that produces little and relies on imports for much of what we consume - food, energy, goods... and we've now voted to effectively destroy the relationship with our close neighbours that facilitates said imports. This will likely result in rising costs of living as well as reduced currency value against those of more productive nations.


I can't see why anyone capable of critical, rational thought can't be concerned about the future tbh, given the current situation.


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## RoadRider400 (1 Oct 2020)

Faratid said:


> Highly unlikely that savings accounts will become negative %


Am I missing something? Of course savings accounts (ie accounts with the specific purpose of holding money to grow the capital) will not become negative %. People would simply close the account.

I think the OP is referring to current accounts.


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## SpokeyDokey (3 Oct 2020)

Re savings rates.

Yesterday we just put some more money into a BLME FRB (fscs protected) with a 5 year lock at 1.6%.

Not Earth shattering but a good rate in the current climate and far better than leaving it lurking in a current account.

Worth a look if you've money to spare that you don't mind tying up for a while.

https://www.blme.com/products-and-services/savings/premier-deposit-account/


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## Notafettler (3 Oct 2020)

That's hell of a long time.


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## Eziemnaik (3 Oct 2020)

Notafettler said:


> Inflation is falling rapidly. I have a marcus account which is beating Inflation with ease but they are lowering interest rates constantly. It's instant access account. I can move money from Marcus to my bank account within minutes.
> You need to take into account what @Electric_Andy is doing. He is insuring himself against a sudden need for money, which could result in him borrowing at say 5% interest or more. Insurance cost money. In his case if he is Saving at zero % interest his cost are Inflation about 0.2% at the moment. A cheap form of insurance.


Inflation is falling rapidly...
Hmmmm...

Avarage house price growth 2010-2020 - 42%
Avarage MP salary growth 2010-2020 -25%
Avarage salary growth 2010-2020 - 15%


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## Notafettler (3 Oct 2020)

@Eziemnaik Hmm we are talking about now. Not 2010 What will you quote next 1930 to 1932?!


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## wafter (3 Oct 2020)

Eziemnaik said:


> Inflation is falling rapidly...
> Hmmmm...
> 
> Avarage house price growth 2010-2020 - 42%
> ...


This in spades, plus the fact that given terrible interest rates there's been enormous growth in anything that could be considered an "investible asset" - houses as mentioned but also classic cars, motorbikes, art... anything that might be considered collectable.

In more mundane terms you only have to pay attention when doing the weekly shop to see that food has jumped substantially; probably by around 20% since the brexit vote trashed our currancy, plus the similar effect this has had on non-essential consumer goods, many of which have had one-off hikes of 10-20% in addition to usual 2-3% annually added for inflation.

The government tell us inflation is low / sub-2%, however in reality / real terms (rather than their politically-massaged published figures) I reckon it's 5%+ annually.

IMO over the next 6-12 months as spending dries up we'll see deflation of these "investible" asset bubbles (I believe some such as classic cars are already on their way down) as well as deflation in non-essential / luxury consumer goods... this is of course unless the government pull out more stops to keep people spending; although there's no more waggle room on the interest rate and more money printing will only fuel inflation.

Unfortunately I think we'll continue to see real-world inflation in essentials as we continue to rely on imports and our currency tanks as the Brexit turd we've been sold is exposed to it's true horiffic extent in the cold light of day.


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## Notafettler (3 Oct 2020)

wafter said:


> however in reality / real terms (rather than their politically-massaged published figures


Evidence to support this? CPI and CPIH are a European Union method of measuring inflation even the US use it. Of course everyones rate of inflation is different. Maybe you should try pointing out that AND the less well off will be affected more by food inflation instead of making knee jerk statements which have no basis in fact.


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## Eziemnaik (3 Oct 2020)

wafter said:


> This in spades, plus the fact that given terrible interest rates there's been enormous growth in anything that could be considered an "investible asset" - houses as mentioned but also classic cars, motorbikes, art... anything that might be considered collectable.
> 
> In more mundane terms you only have to pay attention when doing the weekly shop to see that food has jumped substantially; probably by around 20% since the brexit vote trashed our currancy, plus the similar effect this has had on non-essential consumer goods, many of which have had one-off hikes of 10-20% in addition to usual 2-3% annually added for inflation.
> 
> ...


The most tragic thing is the bike price inflation.
105 bikes that used to sell for a 1000 starting at 1500????


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## Notafettler (3 Oct 2020)

Eziemnaik said:


> The most tragic thing is the bike price inflation.
> 105 bikes that used to sell for a 1000 starting at 1500????


And a multigym that I paid £900 for 12 years ago I sold on eBay for £1100. He collected at 1pm today....after 2 hours taking it apart!!


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## wafter (3 Oct 2020)

Eziemnaik said:


> The most tragic thing is the bike price inflation.
> 105 bikes that used to sell for a 1000 starting at 1500????


I'm sure exactly the same happened during the decline of the Roman empire as their currency was debased... although that would have been Campag gear, obviously


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## Notafettler (3 Oct 2020)

wafter said:


> I can't see why anyone capable of critical, rational thought can't be concerned about the future tbh, given the current situation.


So if we don't agree we are not rational? A bit harsh


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## wafter (3 Oct 2020)

Notafettler said:


> So if we don't agree we are not rational? A bit harsh


That wasn't the intended implication, but it's yours to interpret how you see fit. 

I'd suggest the points raised are more important than what may or may not have been the insinuation in my final comment...


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## Gunk (3 Oct 2020)

Drago said:


> Not only is it unsustainable, everyone knows it is unsustainable, but no one wants to fix it if it means they actually have to be the first to step off of the gravy train. It's akin to environmentalists telling us how we should protect the planet, while themselves being unwilling to give up their foreign homes and private jets.
> 
> There is a big upheavel coming, and the longer the financial model continues as it does, the more pain and disruption it will bring when it collapses. A new dark age beckons.



We said all this in 2008 and nothing much, if anything has changed, a huge part of the population are income rich and asset poor, they've nothing put aside for a rainy day, and little or no pension provision yet they still lease a fancy car at £500 a month and spend more than they earn. the economy actually survives on these super-spenders.

I've always been accused of being over cautious, now I'm 55 it seems as if it was quite a sensible strategy.


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## Notafettler (3 Oct 2020)

wafter said:


> That wasn't the intended implication, but it's yours to interpret how you see fit.
> ...


Oh come now that's exactly how you see us


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## wafter (3 Oct 2020)

Gunk said:


> We said all this in 2008 and nothing much, if anything has changed, a huge part of the population are income rich and asset poor, they've nothing put aside for a rainy day, and little or no pension provision yet they still lease a fancy car at £500 a month and spend more than they earn. the economy actually survives on these super-spenders.
> 
> I've always been accused of being over cautious, now I'm 55 it seems as if it was quite a sensible strategy.


Very true; although the problem with the current economy as you describe it is the use of both carrot and stick. Debt is incentivised and all those who partake are rewarded with "their own home", nice shiney new trinkets, social validation from their peers and a pat on the head from the government. Those who don't are "rewarded" by having their savings inflated away to nothing by the policies put in place to keep the debt-ponzi scheme operational


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## SpokeyDokey (4 Oct 2020)

Notafettler said:


> That's hell of a long time.



Doesn't matter to us tbh.

We have more coming in than we spend each year and we have more money saved than we can ever get through so we don't need to hold too much in Instant Access a/c's - we just like to get the best rate that we can for our savings/investments.

We've been locking in ISA's and FRB's for many years now and in any given year we have around 4-6 to find a new home for so we are always having to keep an eye on what the market rates are.

Seems like only yesterday that we were moaning about 5-6% pa being a pretty miserable rate.


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## wafter (4 Oct 2020)

Notafettler said:


> Evidence to support this? CPI and CPIH are a European Union method of measuring inflation even the US use it. Of course everyones rate of inflation is different. Maybe you should try pointing out that AND the less well off will be affected more by food inflation instead of making knee jerk statements which have no basis in fact.


My statement reads "I reckon" ergo it's my opinion based on my own experiences of buying food and consumer goods since the brexit vote was held in 2016. I agree with your point about inflation being subjective to an extent, and I don't in any way see how this is at odds with / discredits my previous statement so I'm not really sure what you're driving at with that one.



Notafettler said:


> Oh come now that's exactly how you see us


Again, there is no implied perception of the "us" you count yourself as part of in my statement (I'm not even sure what group you're claiming to be part of in your last comment tbh). There is however a growing perception of _you_, who - I assume because you don't agree with my opinion - seems increasingly intent on discrediting and undermining me personally with straw man arguments and constant questioning of my integrity; presumably because you're unable or unwilling to address most of the points I've actually raised


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## Eziemnaik (7 Oct 2020)

https://www.theguardian.com/busines...s-at-12-year-high-as-house-prices-keep-rising
Average house price annual growth rate 7.3


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## Sterlo (14 Oct 2020)

Bad news for savers potentially. Report online this morning that the US Federal Reserve are predicting no interest rate hikes until the end of 2023. I'm sure the BofE will do the same 

https://www.investmentweek.co.uk/ne...64af0jiI9w-khlwYcrlQdIYuK0lv7uBZm_g_CJWiDWjT0


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## Pale Rider (15 Oct 2020)

RoadRider400 said:


> Am I missing something? Of course savings accounts (ie accounts with the specific purpose of holding money to grow the capital) will not become negative %. People would simply close the account.
> 
> I think the OP is referring to current accounts.



What may happen is the introduction of service fees, certainly on current accounts, followed by the blurring of the distinction between current and savings accounts, given there would be no interest on either.

Essentially, the customer would be paying a fee for the secure storage on their money, irrespective of what that service (account) was called.

We still have plenty of places where we can put our money, so at the moment any institution that blinks first risks a large scale withdrawal of funds.

But if they all introduced fees within a short period it would then depend on how many people wanted to risk having their savings in cash under the bed.

A charge of a few quid a year would be a lot cheaper than the installation of a reasonably secure home safe.


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## wafter (18 Oct 2020)

Pale Rider said:


> What may happen is the introduction of service fees, certainly on current accounts, followed by the blurring of the distinction between current and savings accounts, given there would be no interest on either.
> 
> Essentially, the customer would be paying a fee for the secure storage on their money, irrespective of what that service (account) was called.
> 
> ...


I agree in principal but I think the incentive for having a bank account is driven more by functionality than security. I doubt there are many financially savvy people who have large amounts of money in dead-end savings accounts and would instead expect a good chunk of it to be in stocks & shares, gold or speculatively purchased assets.. 

People with any decent amount of savings seem to be the minority anyway - I read a while ago that apparently half of UK adults have less than £1k in savings. 

The big incentive to have a bank account comes from the functionality it affords - no account equals no wages in most jobs and the ballache of paying most remote "life costs" (such as energy, tax, insurance etc) with cheques by post. Obviously cash can be used to pay for stuff face-to-face (Covid anxiety notwithstanding) however there's a constant drive to stamp out cash as it suits the agendas of both the banks (less handling cost and hassle) and government (surveillance and control).

One final note is that aside from the potential future financial costs of holding a bank account, another incentive to retain funds in other forms is the potential for another banking crisis - at best potentially limiting immediate access to your money, at worst seeing it disappear completely (see the Greek "bail ins" from the last crisis). 

All in all, financially (as well as in most other ways) we're in a pretty unprecedented, concerning and unsustainable position


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## BoldonLad (18 Oct 2020)

Faratid said:


> Highly unlikely that savings accounts will become negative %.........................but possible, and if they do, my money will be withdrawn and put under the mattress.
> If there becomes no alternative to a fee paying bank account, I'll just have to take the view that if I want to use services such as DD, money transfers and so on, I'll have to pay for it. However, I will not pay a bank just to keep my money in, and would withdraw all sums as soon as they come in, and put them under the mattress also.
> As usual, it will be the less well off, struggling unemployed/hard working families with *no savings*, who will be worst hit.



If they have no savings, how can they be hardest hit?


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## BoldonLad (18 Oct 2020)

screenman said:


> I would guess those last one's may have debts that will be easier to pay with lower interest rates, some of us can remember *15% mortgages*, I would rather pay a small amount than have h good size lump of cash indoors.



Remember it well. Had just bought the house we live in now. At the time, it was a stretch, then came 15% mortgagee rate, just to stretch us that bit extra! Character forming.


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## wafter (23 Oct 2020)

Did anyone see the front page of the Financial Times yesterday? Really brought home the shocking reality of our national annual deficit... from memory around £3bn in 1985, circa £110bn in 2009 (great financial crash) and it currently pushing £300bn having fallen off a cliff thanks to Covid, with no end in sight). Annual deficits have been rising steadily over the years, contributing to a growing national debt that's knocking on the door of £2tn (_Trillion_, 1,000 times 2bn, or 2E+12 for the scientifically inclined amongst us).

It's estimated that our annual national deficit will hit 5% of GDP by 2024, while our total national debt for the first time this year exceeded 100% of of GDP. The only potential route out if this I can see is money printing and rampant inflation; which has been par for the course since the GFC anyway. No wonder anything that could remotely be considered an appreciating asset has seen its value go through the roof in recent years.

Looks like a complete and total shitshow tbh


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## Grant Fondo (23 Oct 2020)

wafter said:


> Did anyone see the front page of the Financial Times yesterday? Really brought home the shocking reality of our national annual deficit... from memory around £3bn in 1985, circa £110bn in 2009 (great financial crash) and it currently pushing £300bn having fallen off a cliff thank to Covid, with no end in sight). Annual deficits have been rising steadily over the years, contributing to a growing national debt that's knocking on the door of £2tn (_Trillion_, 1,000 times 2bn, or 2E+12 for the scientifically inclined amongst us).
> 
> It's estimated that our annual national deficit will hit 5% of GDP by 2024, while our total national debt for the first time this year exceeded 100% of of GDP. The only potential route out if this I can see is money printing and rampant inflation; which has been par for the course since the GFC anyway. No wonder anything that could remotely be considered an appreciating asset has seen its value go through the roof in recent years.
> 
> Looks like a complete and total shitshow tbh


Scary stats for sure, i wonder what the model spits out if covid romps well into 2021? I need a drink.


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## Once a Wheeler (23 Oct 2020)

Possible ruse:
If you get stung with negative interest rates, take out a stocks-and-shares ISA and pay your ready-use cash into that. Obviously, you need to choose a provider who only charges for trading; but then, do not trade. You can normally pay into and out of these accounts almost instantly with a debit card. Perhaps buy a single super-safe investment for a hundred pounds just to show willing; otherwise, use it as a cash account. It should work for a while until the industry wises up to what is going on and then stings you for not trading. If the worst comes to the worst, it should be worth investigating.


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## Pale Rider (24 Oct 2020)

Once a Wheeler said:


> Possible ruse:
> If you get stung with negative interest rates, take out a stocks-and-shares ISA and pay your ready-use cash into that. Obviously, you need to choose a provider who only charges for trading; but then, do not trade. You can normally pay into and out of these accounts almost instantly with a debit card. Perhaps buy a single super-safe investment for a hundred pounds just to show willing; otherwise, use it as a cash account. It should work for a while until the industry wises up to what is going on and then stings you for not trading. If the worst comes to the worst, it should be worth investigating.



You've obviously thought this one through, but could you explain to the financial dummies like me where the advantage lies?


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## screenman (24 Oct 2020)

Pale Rider said:


> You've obviously thought this one through, but could you explain to the financial dummies like me where the advantage lies?



Not having to pay a fiver a month to have your money kept safe I guess.


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## Kajjal (24 Oct 2020)

Once a Wheeler said:


> Possible ruse:
> If you get stung with negative interest rates, take out a stocks-and-shares ISA and pay your ready-use cash into that. Obviously, you need to choose a provider who only charges for trading; but then, do not trade. You can normally pay into and out of these accounts almost instantly with a debit card. Perhaps buy a single super-safe investment for a hundred pounds just to show willing; otherwise, use it as a cash account. It should work for a while until the industry wises up to what is going on and then stings you for not trading. If the worst comes to the worst, it should be worth investigating.


This is kind of thing people will do. There are numerous similar ways to achieve this.


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## Pale Rider (24 Oct 2020)

screenman said:


> Not having to pay a fiver a month to have your money kept safe I guess.



Could be as simple as that, but I was hoping it was something cleverer.


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## SpokeyDokey (24 Oct 2020)

wafter said:


> I agree in principal but I think the incentive for having a bank account is driven more by functionality than security. I doubt there are many financially savvy people who have large amounts of money in dead-end savings accounts and would instead expect a good chunk of it to be in stocks & shares, gold or speculatively purchased assets..
> 
> People with any decent amount of savings seem to be the minority anyway - *I read a while ago that apparently half of UK adults have less than £1k in savings.*
> 
> ...



Sounds about right - a year or so back I read that 62% of UK adults have less than £500 in savings.


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## SpokeyDokey (24 Oct 2020)

wafter said:


> Did anyone see the front page of the Financial Times yesterday? Really brought home the shocking reality of our national annual deficit... from memory around £3bn in 1985, circa £110bn in 2009 (great financial crash) and it currently pushing £300bn having fallen off a cliff thanks to Covid, with no end in sight). Annual deficits have been rising steadily over the years, contributing to a growing national debt that's knocking on the door of £2tn (_Trillion_, 1,000 times 2bn, or 2E+12 for the scientifically inclined amongst us).
> 
> It's estimated that our annual national deficit will hit 5% of GDP by 2024, while our total national debt for the first time this year exceeded 100% of of GDP. The only potential route out if this I can see is money printing and rampant inflation; which has been par for the course since the GFC anyway. No wonder anything that could remotely be considered an appreciating asset has seen its value go through the roof in recent years.
> 
> Looks like a complete and total shitshow tbh



Needs a bit of historical context before we get too jittery:

http://www.historyandpolicy.org/pol...nd-the-uk-national-debt-in-historical-context


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## wafter (24 Oct 2020)

SpokeyDokey said:


> Needs a bit of historical context before we get too jittery:
> 
> http://www.historyandpolicy.org/pol...nd-the-uk-national-debt-in-historical-context


Thanks - that looks like a great resource; I've only read the first quarter or so but will digest the rest when I get time. Granted we've had periods where national debt relative to GDP has been higher, however this has usually been the result of war and as pointed out in the article has been corrected by economic growth and/or inflation. Can't see much in the way of growth given how intrinsically broken our financial system is, so mega-inflation here we come, IMO.


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## byegad (25 Oct 2020)

Another withdraw and hide the cash from me. No way will I let them reduce our cash savings anymore. I retired early in 2006, we had some investments and cash savings. The income from both would pay for those extras! Come the bank scandal and we've had bugger all, or almost, from the cash savings. So inflation is writing down its buying power year on year, but -ve interest is the last straw and I'll be sleeping a little closer to the ceiling.


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## Gunk (25 Oct 2020)

byegad said:


> Another withdraw and hide the cash from me. No way will I let them reduce our cash savings anymore. I retired early in 2006, we had some investments and cash savings. The income from both would pay for those extras! Come the bank scandal and we've had bugger all, or almost, from the cash savings. So inflation is writing down its buying power year on year, but -ve interest is the last straw and I'll be sleeping a little closer to the ceiling.



It’s absolutely pointless having cash lying around, you are always better to put it into something, even gold or silver will do better, or invest in a classic steel framed bike, at least you can look at it and admire it.


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## SpokeyDokey (26 Oct 2020)

byegad said:


> Another withdraw and hide the cash from me. No way will I let them reduce our cash savings anymore. I retired early in 2006, we had some investments and cash savings. The income from both would pay for those extras! Come the bank scandal and we've had bugger all, or almost, from the cash savings. So inflation is writing down its buying power year on year, but -ve interest is the last straw and I'll be sleeping a little closer to the ceiling.



That's a heck of an uninsured risk you'll be taking there.


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## SpokeyDokey (26 Oct 2020)

I have no personal interest () in BLME but suggest that even short term fixes of 6 months (0.8% gross annual rate) and 1 year at 1.0% are better than withdraw and hide in the home with varying degrees of security!

https://www.blme.com/products-and-services/savings/premier-deposit-account/

Pretty fed up with interest rates full stop over the last 12 years ago. We are one heck of a lot adrift of our projected passive investment returns pa vs our pre 2008 projections.


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## byegad (26 Oct 2020)

SpokeyDokey said:


> That's a heck of an uninsured risk you'll be taking there.


Rather be robbed by an 'honest thief' than by one in a business suit with huge offices and vast profits already.


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## wafter (26 Oct 2020)

SpokeyDokey said:


> I have no personal interest () in BLME but suggest that even short term fixes of 6 months (0.8% gross annual rate) and 1 year at 1.0% are better than withdraw and hide in the home with varying degrees of security!
> 
> https://www.blme.com/products-and-services/savings/premier-deposit-account/
> 
> Pretty fed up with interest rates full stop over the last 12 years ago. We are one heck of a lot adrift of our projected passive investment returns pa vs our pre 2008 projections.


It's a pittance though, isn't it? relinquish control of £10k for a year and get £100 for your trouble at the end of it. Granted they claim FSCS cover but they're still a less-mainstream bank in an era of banking crises. Obviously depends on the amount you have to "invest" and your level of home security, but for 1% I'd rather keep the money in cash; on hand should it be needed (for a better opportunity, perhaps), avoiding anxiety of trusting a lesser-known bank (I got caught by the whole Icesave thing last time) and the hassle of setting the whole thing up. 

I also lament the interest rate situation, but given the growing reliance on public and private debt to keep our increasingly shaky economy propped up for a little bit longer I'm not sure we'll ever see a meaningful rise. Personally I'm looking at gold as it's historically performed very well as an anti-inflation hedge and we're now well into damage-limitation territory IMO.

While your investments may seem disappointing compared to what you were expecting, IMO you should count yourself lucky as you doubless have a much more financially stable retirement (or retirement at all!) than many; especially younger generations.


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## Dave7 (26 Oct 2020)

byegad said:


> Rather be robbed by an 'honest thief' than by one in a business suit with huge offices and vast profits already.


What did you say your address is ??
You can pm me as you cannot trust the rabble on here


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## SpokeyDokey (26 Oct 2020)

wafter said:


> It's a pittance though, isn't it? relinquish control of £10k for a year and get £100 for your trouble at the end of it. Granted they claim FSCS cover but they're still a less-mainstream bank in an era of banking crises. Obviously depends on the amount you have to "invest" and your level of home security, but for 1% I'd rather keep the money in cash; on hand should it be needed (for a better opportunity, perhaps), avoiding anxiety of trusting a lesser-known bank (I got caught by the whole Icesave thing last time) and the hassle of setting the whole thing up.
> 
> I also lament the interest rate situation, but given the growing reliance on public and private debt to keep our increasingly shaky economy propped up for a little bit longer I'm not sure we'll ever see a meaningful rise. Personally I'm looking at gold as it's historically performed very well as an anti-inflation hedge and we're now well into damage-limitation territory IMO.
> 
> While your investments may seem disappointing compared to what you were expecting, IMO you should count yourself lucky as you doubless have a much more financially stable retirement (or retirement at all!) than many; especially younger generations.



Yes, it is a pittance but a small pittance is better than nothing.

I must admit that I made the assumption that people do keep some more liquidity available for short-term needs. I can't imagine anyone not. i think my point is that short-term fixes are better than the insecure, earning nothing, cash under the mattress method.

I agree re the dismal long-term prospect of interest rate rises. It has cost us dear since the 98 crash.

We too got caught by the Landsbanki debacle - although it eventually came to a satisfactory conclusion as you know. The FSCS processes are more streamlined now in the wake of it.

We would consider ourselves more prudent than lucky to be in the situation that we are.


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## wafter (26 Oct 2020)

SpokeyDokey said:


> Yes, it is a pittance but a small pittance is better than nothing.
> 
> I must admit that I made the assumption that people do keep some more liquidity available for short-term needs. I can't imagine anyone not. i think my point is that short-term fixes are better than the insecure, earning nothing, cash under the mattress method.
> 
> ...


I see your points; I guess it's a matter of perspective to some extent. Personally for the sake of those returns I'd rather have my money in cash or gold but again, depends on situation, quantities etc. 

Wasn't wishing to diminish your prudence with my last comment; however I think it's a given than most people in subsequent generations won't have the same opportunities that yours did though.


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## byegad (27 Oct 2020)

Dave7 said:


> What did you say your address is ??
> You can pm me as you cannot trust the rabble on here


It's 20 Downing Street and don't forget to look under the mattress.


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## johnblack (2 Nov 2020)

Nationwide are offering a .5% bond for 18 months but with a minimum 200/1 chance of winning £10k if you put in the max of 10k, the more people that put in, the more prizes will be offered. Hardly exciting but there's might give it a bash just for the chance of getting something back. I'm not going to loose a lot in that period by sticking it anywhere else.


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## Sterlo (2 Nov 2020)

johnblack said:


> Nationwide are offering a .5% bond for 18 months but with a minimum 200/1 chance of winning £10k if you put in the max of 10k, the more people that put in, the more prizes will be offered. Hardly exciting but there's might give it a bash just for the chance of getting something back. I'm not going to loose a lot in that period by sticking it anywhere else.


Trouble is you need to have a "linked" Nationwide current account as well.


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## johnblack (2 Nov 2020)

Sterlo said:


> Trouble is you need to have a "linked" Nationwide current account as well.


True, didn't think about that, just saw it on their site after I logged in.


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