Pensioners Savings Put To Good Use

[dazza74]

I keep hearing that pensioners get a raw deal as low interest rates mean they get very little return on their savings. Could the government not setup their own savings account, offer say 5% interest. The milions or more likely billions could be spent on useful ventures like new houses etc.

I just hate banks with a passion now, I wish they never got to see these people's money. I hate how they operate, they'll offer somebody depositing £100k with them 2% return whilst charge upwards of 20% interest on credit cards, 8% on a simple loan.

 

[Oldboy1934]

Hence we we need banking reform.

 

[MikeTV]

I keep hearing that pensioners get a raw deal as low interest rates mean they get very little return on their savings. Could the government not setup their own savings account, offer say 5% interest. The milions or more likely billions could be spent on useful ventures like new houses etc.

Yeah, but how would that benefit the super-rich bankers? You clearly misunderstand! The objective is to separate pensioners from their life savings, and give it to the rich. How else can our economy prosper if those lazy pensioners aren't handing all their money to wealthy City executives?!

 

[overkill]

Yeah, but how would that benefit the super-rich bankers? You clearly misunderstand! The objective is to separate pensioners from their life savings, and give it to the rich. How else can our economy prosper if those lazy pensioners aren't handing all their money to wealthy City executives?!

Oh man that had me chuckling.........

 

[EarthRod]

Successive governments and the banks have succeeded in separating from me a large chuck of life savings and investments. My income from savings has dropped about 70% and the capital has lost about 25% of its value over the last 3 - 4 years.

The little darlings.

 

[gibbsy]

Yeah, but how would that benefit the super-rich bankers? You clearly misunderstand! The objective is to separate pensioners from their life savings, and give it to the rich. How else can our economy prosper if those lazy pensioners aren't handing all their money to wealthy City executives?!

And give themselves a big bonus for losing my money at an alarming rate. Legal and General take a bow.

 

[overkill]

Successive governments and the banks have succeeded in separating from me a large chuck of life savings and investments. My income from savings has dropped about 70% and the capital has lost about 25% of its value over the last 3 - 4 years.

The little darlings.

Ditto. My pension was worth a mint ten years ago, recently every letter I get makes for more and more depressing reading. I either massively increase my contributions or..................

 

[NewMan]

Now don't jump on me, I admit I may not have fully thought this through, but given government projects are generally well-known for running overdue and way overbudget, and that social housing, schools, hospitals and that sort of thing don't as a rule run at a profit - where would the 5% interest come from?

Don't get me wrong, I wonder the same about government issued bonds, like gilts which are quite common, so I'm not knocking the idea, just wondering where the extra comes from to pay interest on all those billions...

 

[MikeTV]

I keep hearing that pensioners get a raw deal as low interest rates mean they get very little return on their savings. Could the government not setup their own savings account, offer say 5% interest. The milions or more likely billions could be spent on useful ventures like new houses etc.

Actually, the government already do this via National Savings and Investments. But they don't pay a 5% interest rate - they pay about 1.75% currently.

If they were to offer better rates for pensioners, that might work. But the problem then becomes the fact that the richest would benefit the most, because it wouldn't be means tested. So perhaps a better answer is to pay pensioners via a means tested tax credit of some kind, rather than interest on savings.

 

[MikeTV]

Now don't jump on me, I admit I may not have fully thought this through, but given government projects are generally well-known for running overdue and way overbudget, and that social housing, schools, hospitals and that sort of thing don't as a rule run at a profit - where would the 5% interest come from?

Don't get me wrong, I wonder the same about government issued bonds, like gilts which are quite common, so I'm not knocking the idea, just wondering where the extra comes from to pay interest on all those billions...

Bankers tax.

 

[sidicks]

Bankers tax.

As discussed, bankers already pay tax...

 

[NewMan]

As discussed, bankers already pay tax...

This is why he's on my ignore list...

 

[dovercat]

If they were to offer better rates for pensioners, that might work. But the problem then becomes the fact that the richest would benefit the most, because it wouldn't be means tested. So perhaps a better answer is to pay pensioners via a means tested tax credit of some kind, rather than interest on savings.

The pensioners already get a income guarantee with the pension credit topping up their income if it is below the guaranteed amount. £137.35 if they are single, £209.70 if they are a couple. On top of this there is the pension credit savings credit, which if they are 65, can take the amount they get up to £157.87 if they are single, £237.60 if they are a couple. These are means tested.

The winter fuel payment once a year is not means tested it is £200 per household, £300 if the person is 80 years old or over.
The cold weather payments £25 each time the temperature is zero degrees celcius or below for seven consecutive days are means tested.

If the pensioner is eligible for means tested benefits and has a mortgage. They also already get Support for Mortgage Interest paid at 3.63% I think. Used to be 6.08% prior to Oct 2010 and was actually paying in excess of the interest payments on some mortgages.
If the pensioner lives in rented accomodation they might get housing benefit which is means tested.
Council tax benefit is also means tested.

 

[overkill]

This is why he's on my ignore list...

As I said elsewhere, the guy lives to make provocative posts.

 

[MikeTV]

This is why he's on my ignore list...

As I said elsewhere, the guy lives to make provocative posts.

I know he does. It's depressing. I feel sorry for Newman.

 

[MikeTV]

As discussed, bankers already pay tax...

You can be as bored as you like Sidicks but it's a serious suggestion. How do you think the banks should repay their debt to society for first screwing the whole economy, and then getting the taxpayer to bail them out? I'm not the only one making these of kind of suggestions. I believe Merkel and Sarkozy agree on the need for a financial transaction tax. Obviously Cameron disagrees, but there is talk of a need for more bonus taxes in the UK.

 

[pandemic]

I don't think pensioners get a raw deal if I'm honest, however there is definitely a lack of 'humanity' shown towards them from time to time from non-pensioners.
The reason I say they don't get a raw deal is because by the time we are pensioners (those of us in under 40 or so), things are going to be a lot worse.
To be honest it's the upcoming generations that are/will get the raw deal. Last year the average age for a single person getting on the property ladder without parental help or otherwise was 37. This is only going to rise over time. Students who are currently graduating under the 3 grand per annum tuition fee scheme, will be paying 9% of all there earning after 15K - the majority (60%) will do this there entire working life as they won't come close to paying it off once interest is added.
I'm 27 and since graduating I've noticed that for my generation our twenties have consisted pretty much of work, work and more work. Certainly amongst my friend circle, we seem to work stupid hours (over 12 hours a day if I include traveling to work) and have no time to do much else. Whereas previous generations have had it pretty good in comparison to what the future holds for many of us. Gone are the day of early retirement too, my grandfather retired at 52, there is no hope of that for us. Mind you he deserved it for all he'd done throughout his life.
The way I currently see it is the generations that have been the cause of our fiscal troubles are still benefiting from it with low mortgages, etc. While the upcoming generation will be left to pick up the pieces.
<Damn that's a pessimistic post from me, typically I'm fairly optimistic>

 

[MikeTV]

I don't think pensioners get a raw deal if I'm honest, however there is definitely a lack of 'humanity' shown towards them from time to time from non-pensioners.
The reason I say they don't get a raw deal is because by the time we are pensioners (those of us in under 40 or so), things are going to be a lot worse.
To be honest it's the upcoming generations that are/will get the raw deal. Last year the average age for a single person getting on the property ladder without parental help or otherwise was 37. This is only going to rise over time. Students who are currently graduating under the 3 grand per annum tuition fee scheme, will be paying 9% of all there earning after 15K - the majority (60%) will do this there entire working life as they won't come close to paying it off once interest is added.
I'm 27 and since graduating I've noticed that for my generation our twenties have consisted pretty much of work, work and more work. Certainly amongst my friend circle, we seem to work stupid hours (over 12 hours a day if I include traveling to work) and have no time to do much else. Whereas previous generations have had it pretty good in comparison to what the future holds for many of us. Gone are the day of early retirement too, my grandfather retired at 52, there is no hope of that for us. Mind you he deserved it for all he'd done throughout his life.
The way I currently see it is the generations that have been the cause of our fiscal troubles are still benefiting from it with low mortgages, etc. While the upcoming generation will be left to pick up the pieces.
<Damn that's a pessimistic post from me, typically I'm fairly optimistic>

Actually, I was going to post a similar observation. Today's pensioners are probably some of the wealthiest there have ever been, on average. This has largely been fueled by rocketing property prices for the past few decades. The "lucky" generation, if you like? Obviously we are going to pay the price for this for years to come.

However, they did endure some hardship along the way - who would want to return to a seventies lifestyle?

 

[EarthRod]

I don't think pensioners get a raw deal if I'm honest, however there is definitely a lack of 'humanity' shown towards them from time to time from non-pensioners.
The reason I say they don't get a raw deal is because by the time we are pensioners (those of us in under 40 or so), things are going to be a lot worse.
To be honest it's the upcoming generations that are/will get the raw deal. Last year the average age for a single person getting on the property ladder without parental help or otherwise was 37. This is only going to rise over time. Students who are currently graduating under the 3 grand per annum tuition fee scheme, will be paying 9% of all there earning after 15K - the majority (60%) will do this there entire working life as they won't come close to paying it off once interest is added.
I'm 27 and since graduating I've noticed that for my generation our twenties have consisted pretty much of work, work and more work. Certainly amongst my friend circle, we seem to work stupid hours (over 12 hours a day if I include traveling to work) and have no time to do much else. Whereas previous generations have had it pretty good in comparison to what the future holds for many of us. Gone are the day of early retirement too, my grandfather retired at 52, there is no hope of that for us. Mind you he deserved it for all he'd done throughout his life.
The way I currently see it is the generations that have been the cause of our fiscal troubles are still benefiting from it with low mortgages, etc. While the upcoming generation will be left to pick up the pieces.
<Damn that's a pessimistic post from me, typically I'm fairly optimistic>

When I was in my early 20s I worked about an 80 hour week for nearly 3 years. I was then able to put down a 20% deposit on my first house (3-bed semi-detached with garage) and pay the 11% mortgage.

Yes - the previous generation had it good, but only the successful hard-working people who were prepared to take on the nasty knocks in life and lived life. The rest, as usual, fell by the wayside.

It's the same today: the cream rises to the top - always has done and always will do. People are people no matter how young or how old they are.

I am a little puzzled that working a 12 - 14 hour day is considered 'stupid'. To me and many of my generation that is quite normal!

 

[dovercat]

I don't think pensioners get a raw deal if I'm honest, however there is definitely a lack of 'humanity' shown towards them from time to time from non-pensioners.
The reason I say they don't get a raw deal is because by the time we are pensioners (those of us in under 40 or so), things are going to be a lot worse.

I think pensioners get a raw deal because the state pension link to average earnings should never of been removed. They have not been given the pension they have paid for.
Also care provision if they need someone to check they are ok, or to live in sheltered or residential care. The level of free state provision is not what they were promised.

The age of retirement is being increased which I think is grossly unfair as life expectance of some sections of society, including the low paid is a lot less than others. The government is also introducing compulsory employee contributions to private pensions run by your employer. That is basically a pay cut, but the contributions rate so low that for the low paid the pension will be worthless. I would not be surprised if these private pensions will be deducted £ for £ from government means tested benefits.

On a brighter note the triple guarantee and the government plans to increase the state pension to the equivalent of £140 per person in todays money. Means I disagree that you will necessarily be worse off once you get to retire.

To be honest it's the upcoming generations that are/will get the raw deal. Last year the average age for a single person getting on the property ladder without parental help or otherwise was 37. This is only going to rise over time.

The housing market will collapse in my opinion or simply fail to continue to rise so falling in real terms over time. The price of housing can not simply rise and rise to ever greater multiples of average salary. The problem is the buy to let market with it's low regulation and various tax breaks and ability to borrow money on expected future revenue. The other problem is the government schemes shoring up the housing market, mainly through new build projects and first time buyers. Underwriting the mortgage, giving interest free loan of a deposit, doing part buy part rent, etc...

Students who are currently graduating under the 3 grand per annum tuition fee scheme, will be paying 9% of all there earning after 15K - the majority (60%) will do this there entire working life as they won't come close to paying it off once interest is added.

I think the new system is any outstanding government student loans are written off after 30 years. The earnings threshold is not fixed and the interest rate is not fixed. To me the level of repayments per month do not seem particularly bad due to the earnings threshold. I do not care if someone on £50k has to pay a couple of hundred pounds a month in debt repayment, most people will not have as high a income as them even after they have deducted the loan repayment. But it is a burden on University students not faced by previous students. I think the justification is partly the increased numbers going to University so paying for it out of general taxation is not fair as most tax payers did not have the opportunities of this new generation.

I'm 27 and since graduating I've noticed that for my generation our twenties have consisted pretty much of work, work and more work.

Unless you discount all those years in education not so long ago most people started full time employment at 16, before that it was 14.

You are also I assume not on minimum wage. I expect as a graduate you are on at least the UK average salary or better. Income disparity has increased in the UK and as a graduate you are likely to be at the top end not the bottom end. So I do not feel much sympathy or pity for you.

Certainly amongst my friend circle, we seem to work stupid hours (over 12 hours a day if I include traveling to work) and have no time to do much else.

No one I know includes time getting to and from work as time working.

It is within living memory that the working week was was 72hr weeks, that then got dropped to 60hrs, and eventually to 40hrs. Although many people have to work more than 40hrs a week to make ends meet.

Your work I assume is also not hard physical labour.

Whereas previous generations have had it pretty good in comparison to what the future holds for many of us. Gone are the day of early retirement too, my grandfather retired at 52, there is no hope of that for us. Mind you he deserved it for all he'd done throughout his life.

You mean your life will not be as comfortable as your grand parents, ability to buy a home of your own, early retirement, etc... Not everyone in previous generations had it as comfortable as your grand parents. My parents generation lived through, leave school at 14 to a life of hard work followed by getting to go and get shot at in a world war, followed by home to more hard work 60hr a week as the normal working week. Eventually ending up with the comfort of better housing, more consumer goods, higher standard of living and a working week of 40hrs. My generation has had a better life than my parents generation, the next generation might not have it quite so good, but you are hardly being very hard done by.

The way I currently see it is the generations that have been the cause of our fiscal troubles are still benefiting from it with low mortgages, etc. While the upcoming generation will be left to pick up the pieces.

The government and banking system caused the fiscal trouble. Not everyone was a member of government or a investment banker. The demographic blip of an increasing elderly population was also not their fault they did not choose to be born.

<Damn that's a pessimistic post from me, typically I'm fairly optimistic>

It does come across as self pitying when you appear to not actually be suffering or to have ever suffered. You life just does not look as good as you hoped for or as good as your grand parents had it. So what, you still have it good in comparison to most people on the planet, and probably most people in the UK. Be grateful for what you do have not resentful for what you do not have, and if you feel the need to be resentful, target that at the government and investment bankers not an entire generation.

 

[pandemic]

You've got it all wrong I'm not in the business of self pity, I know I've got it pretty good (now). My point is people in the same position as me 20 years ago would have been in a much better position (graduates) i.e. it would have only taken a few years after working to secure a deposit and mortgage. Whereas it will take my generation at least a decade and more for future generations.
The comment about me 'not actually be suffering or to have ever suffered', is a pretty stupid presumption considering you know nothing about me or my early life. Though you wouldn't have made it had you have read some of the posts I've made in the past.
You say the government and bankers, etc caused the fiscal problems. Well guess who voted those politicians in, so yes in my mind that generation does have a responsibility to take part of the blame and generation to come will ask questions of them.
My grand parents grew up in the third world. Had to live through things I couldn't even imagine, having lost more than half their children because child mortality was huge due to poverty, poor sanitation, lack of infrastructure, etc. Even when they came to UK they had virtually nothing, but grafters get there in the end.
I know better than most that previous generations had it worse, but my comparison is for say the few generations. Those born in the mid 50s - mid 70s in Britain.
I think time will show just how bad it is going to get. My earlier post was not really the way I feel, but more what people are/will feel in the years to come.

 

[dazza74]

I know I'm delving into the realms of fantasy in regard how the world works in reality, but I do feel this country struggles with basically dead money. Sitting in overinflated houses and banks taking the mick out of savers.

Social Housing could be for small profit, what it cost to knock up a new build in comparison to what you could get in rent. Build the house properly and it will be there in 100+ years time, would pay for itself in modest rent in no time at all.

 

[dovercat]

You've got it all wrong I'm not in the business of self pity, I know I've got it pretty good (now). My point is people in the same position as me 20 years ago would have been in a much better position (graduates) i.e. it would have only taken a few years after working to secure a deposit and mortgage. Whereas it will take my generation at least a decade and more for future generations.

I disagree because the house prices will not continue to rise relative to earnings. In a economic downturn they are likely to fall. They have already fallen back from the high. If you and future generations vote for governments who build more houses then house prices will fall. Also long term the demographic bubble will die off freeing up the housing the older people live in.

House prices can fall as well as rise. Your comments remind me of what people said during the last housing boom in the late 1980s. When people twenty years younger than you would of been about your age now.

I do not have a problem with current house price but I do with the new builds. I would be in favor of lower density housing and housing that is bigger, meets or exceeds the living space and room dimension recommendations. Modern housing seems to be getting ever closer packed, with ever smaller gardens, and ever smaller bedrooms, etc...

The comment about me 'not actually be suffering or to have ever suffered', is a pretty stupid presumption considering you know nothing about me or my early life# Though you wouldn't have made it had you have read some of the posts I've made in the past.

Fair enough. I have not walked in your shores. I just assumed if you had suffered you would be less concerned with not being able to buy a house as fast or retire as young. I am happy to be alive and healthy, with food in my stomach, clothes on my back and a roof over my head everything else is a bonus

You say the government and bankers, etc caused the fiscal problems# Well guess who voted those politicians in, so yes in my mind that generation does have a responsibility to take part of the blame and generation to come will ask questions of them.

You posted you are 27. Since elections you have been able to vote in we have had the recession, the banking crisis, and a sustained economic downturn. Can we blame you for the end of the longest period of sustained economic growth and growing prosperity.
If you were in your thirties you would also be old enough to have voted for those in charge during this period of economic growth and the housing boom. So why single out for blame those twenty years older than you.

I think time will show just how bad it is going to get. My earlier post was not really the way I feel, but more what people are/will feel in the years to come.

Times have looked bleak in the past even for those born twenty years before you, mass unemployment, extremely violent riots in the 1980`s, that and the likelihood of the end of the world in a nuclear war.
The current standard of living maybe falling a bit. But technology marches on, I expect the standard of living in twenty years will be higher than it is now, not lower. If we have a sustained economic downturn lasting decades or end up in a world war it will be the governments in power now and during those decades that will be to blame for not getting the economy moving and growing.

 

[dovercat]

Social Housing could be for small profit, what it cost to knock up a new build in comparison to what you could get in rent. Build the house properly and it will be there in 100+ years time, would pay for itself in modest rent in no time at all.

Not sure the current government is too keen on Social Housing.
Number of affordable housing build started in England
April - September 2010 13,625
April - September 2011 454
Of which affordable rent housing (Social Housing)
April - September 2010 9,360
April - September 2011 259

 

[EarthRod]

Not sure the current government is too keen on Social Housing.
Number of affordable housing built in England
April - September 2010 13,625
April - September 2011 454
Of which affordable rent housing (Social Housing)
April - September 2010 9,360
April - September 2011 259

Interesting figures you've quoted there.

Can you give us your source please?