Anyone on MINUS % bank rates yet

[Pale Rider]

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?

 

[screenman]

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.

 

[Kajjal]

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.

 

[Pale Rider]

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.

 

[SpokeyDokey]

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

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

 

[SpokeyDokey]

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

 

[wafter]

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.

 

[byegad]

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.

 

[Gunk]

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.

 

[SpokeyDokey]

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.

 

[SpokeyDokey]

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.

 

[byegad]

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.

 

[wafter]

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.

 

[Dave7]

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

 

[SpokeyDokey]

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.