YP Letters: Savers must stop shirking their proper role in economy

From: John Riseley, Harcourt Drive, Harrogate.
Bank of England governor Mark Carney as interest rates come under scrutiny.Bank of England governor Mark Carney as interest rates come under scrutiny.
Bank of England governor Mark Carney as interest rates come under scrutiny.

MANY of those who, like myself, have significant funds in the building society or bank will see predicted rises in interest rates as a long overdue restoration of a fairer deal for savers.

I beg to differ. I would characterise as either deluded or freeloaders those who expect a substantial risk-free return. This oxymoron is only made possible by the FSCS guarantee of up to £85,000, meaning that risk is borne by the taxpayer. If interest rates do go up, it would be appropriate for much of the increase to go to the Treasury in fees for this.

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Savers are shirking their proper role in the economy. Suppose that we had buy-to-let landlords who were looking for some modest improvement over the paltry one per cent return they were getting on a savings account, instead of borrow-to-buy-to-let landlords who are struggling to service their debt at interest rates of five per cent or more. Wouldn’t that go some way towards addressing our dominant social problem of sky-high rents?

Rather than lending to house buyers, savers could invest directly in buy-to-let property as sole owners, with a consortium of friends or through shares in housing companies.

Such a change could, of course, take many of these risk-averse players outside of their comfort zone. But we view it as the height of good sense, and worthy of Government help, for a couple to buy a house when their joint wealth amounts to only a 20th of its value. How then can the same sort of investment be too risky for those who are trying to accumulate a deposit towards a house or for those who already own outright the house they live in and have savings enough to buy a further house or a substantial part-share in one?

By turning lenders into landlords and borrowers into tenants, we could reduce rents, debt and the risk of bankruptcy, defaulting and economic crash. But that is unlikely to happen so long as we, and the Government, rely for advice on those whose livelihood is in money-lending.

From: DS Boyes, Upper Rodley Lane, Leeds.

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I FIND the enormous disparity in rates of interest for borrowing money today very difficult to grasp.

Mortgages for house purchases are almost zero per cent, personal loans from banks around three per cent, credit cards between 20 to 30 per cent. Yet in comparison, the now widely used payday loan rates seem astronomical. When will the Government tackle this serious social problem?

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