Jan 09 2009
Savers: What Now?
Mortgage payers may be rubbing their hands in glee, but for savers 2009 looks like being a savage denunciation of their thrift. For hard-pressed pensioners, 2009 may see many on the breadline as they are forced to spend their capital rather than live off their interest. (Do you remember interest? No? That was what you used to get for putting money in the bank)
If you had seen this coming and moved your money into Euro accounts or to bank abroad, then you will be happy rather than the other way round. You have done nicely in the past few months. For sterling bank customers, the past few months have seen the value of the money shrink by 20% which is a clear statement of what international investors think of UK Plc.
Many savers will be thinking about moving either their money, or themselves to foreign climes which is cheaper and actually offers some interest income to live off.
What to do? The obvious answer is to spend as little as possible which is what many are already doing. For many, fixed costs make up a larger and larger proportion of their weekly bill and whilst 2.5% of VAT might have helped, expect other taxes to slowly climb. Mostly it will be your children who pay off this government’s largesse.