Anyone on MINUS % bank rates yet

wafter

Über Member
Location
Oxford
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...
 

Gunk

Veteran
Location
Oxford
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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wafter

Über Member
Location
Oxford
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 :angry:
 

SpokeyDokey

Into my 64th
Moderator
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. :rolleyes:
 

wafter

Über Member
Location
Oxford
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.

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 :rolleyes:
 
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Sterlo

Early Retirement Planning
Location
East Yorkshire

Pale Rider

Legendary Member
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.
 

wafter

Über Member
Location
Oxford
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.
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 :sad:
 

BoldonLad

Veteran
Location
South Tyneside
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?
 

BoldonLad

Veteran
Location
South Tyneside
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. ;)
 

wafter

Über Member
Location
Oxford
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 :sad:
 
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Grant Fondo

Oswalds legs look strangely human?
Location
Cheshire
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 :sad:
Scary stats for sure, i wonder what the model spits out if covid romps well into 2021? I need a drink.
 

Once a Wheeler

Well-Known Member
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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