The spend, spend, spend culture of recent years has got the UK into huge amounts of debt, which will undoubtedly affect everyone in the country.
Today’s savers are among some of the worst hit. Despite acting responsibly and prudently, they now find themselves receiving next to zero reward for their efforts.
The Bank of England, through the pronouncements of its deputy governor, Charlie Bean, admitted that the whole point of its interest rate policy was to discourage saving in order to reflate the economy. This is not only unjust to savers, who demonstrated restraint, thrift and forward-thinking during a culture of cheap debt, but it is also not a long-term solution to the UK’s economic problems.
In many ways, this is no surprise since successive Governments have repeatedly undermined savers, savings products and pensions. It was in response to this continued treatment that in January we launched Save Our Savers (www.saveoursavers.co.uk) with the intention of uniting savers and giving them a means by which to fight back.
The level of savings over the last decade was half that of the previous two. The current policy of pursuing economic growth at the expense of saving will continue this trend. Low interest rates, however, are only supposed to be for the short term, lasting until the economy has recovered. But are politicians really going to start promoting prudence and saving in the face of economic growth following a period of sustained austerity?
The economic wellbeing of the UK is dependent on a wide variety of factors but one of the key elements of a strong and sustainable economy should be a culture that encourages individuals to save.
The Government talks about the concept of the “big society” which lays emphasis on the efforts – indeed, the responsibility – of individuals to do things for themselves, and no group is more committed to the idea of self-help than savers. But no group is more hampered than savers by Government’s reluctance to support a savings culture.
Take, for example, the complete absence of pressure on the banks to deliver to savers a return that – at a minimum – will beat inflation. In fact, the Government itself is guilty of exacerbating this problem further by allowing National Savings & Investments to withdraw its inflation-linked bonds.
The national level of saving, known as the savings ratio, is a figure that is frequently discussed. It is the object of good intentions that never materialise and represents our savings, which are too easy a target for politicians. But despite the importance of savings to the UK economy there is no published target for the “right” level of savings ratio, and hence no official body tasked with achieving it.
That is why we fully support Money Marketing’s “Pave the Way to Save” campaign. It is high time someone had the job of promoting savings and protecting savers. We will continue to push for justice and a fair deal for savers – the bedrock of a sustainable economic future for the UK.
Jason Riddle is co-founder of Save Our Savers