Savings; Modest Proposal

[fivemack]

Great. Savings rates are now at 2%; the perfect moment for the Government to launch a token encouraging-saving program whereby, if you are sufficiently poor and put away six pounds a week, after two years a magic wand will be waved and it will be as if you had put away nine pounds a week.

At the very least it would seem to make sense to raise benefits and pensions by those six pounds a week, with a claim that it's to encourage saving. If you add only a couple of hoops to jump through to keep the £6 from going automatically to a savings account of the right sort, it might well actually end up saved, and if not then a marginal six pounds on benefits is infinitely more likely to get spent in an economy-stimulating way than any process which, for example, gives money to me.

(Anyone who has sixty spare pounds a week, set up a monthly saver with Barclays ASAP before they decide that paying more than three and a half times the current base rate, fixed for a year, is silly. You need to turn up in person with your passport and a utility bill, the process takes about twenty minutes, and you have to set up a standing order into the account manually rather than have Barclays arrange it through direct-debitry)

Comments

[stevegreen.livejournal.com]

Too true, Tom. I was hoping to sort out my and Ann's savings next week to produce enough income to cover the utility bills -- and then the BoE rate drops another percent...

[beingjdc.livejournal.com]

Barclays are still paying the Arabs about 10% aren't they? So I guess 6% for money from the likes of you and me is a bargain.

[tau-iota-mu-c.livejournal.com]

But I thought we were trying to boost short term profligate spending, not increase savings. How will increasing savings boost the economy, man!?

Also: isn't CPI now about 5%?