pensionsandsavings.com

  • PENSIONSANDSAVINGS.COM

    From Ros Altmann:economist and pensions,
    investment and retirement policy expert

    • pensionsandsavings.com

    pensionsandsavings.com

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    Category: Monetary Policy and Interest Rates

    Time for a national inquiry into the impact of lower interest rates.

    Time for a national inquiry into the impact of lower interest rates.

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    13 September 2016 Time for a proper national debate about the impacts of Monetary Policy Government should launch an inquiry into the effects of lower interest rates  Main points: QE was an emergency policy to stave off depression – it is a huge monetary experiment which must not be considered as ‘normal’ policymaking The latest round of rate cuts and QE may well have been a mistake – in August 2016 we were not facing economic collapse and the negative…

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    Bank of England pension scheme shows dangers of QE

    Bank of England pension scheme shows dangers of QE

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    12 September 2016 Bank of England’s own pension scheme highlights the problems of QE Bank says QE should make gilt owners rebalance portfolios into riskier assets – but BofE pension scheme isn’t doing this QE may not work as pension funds and insurers are constrained from taking more risk As QE worsens pension deficits and has pushed contributions to ruinous levels – Bank of England scheme requires employer contributions over 50% of salary The Bank of England has recently published…

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    Government must help savers – bring back guaranteed high interest bonds

    Government must help savers – bring back guaranteed high interest bonds

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    9 August 2016 Monetary policy is not helping ordinary people and low rates may be doing more harm than good Ordinary savers are being hung out to dry and pension problems have worsened Government should issue more high interest 65+ guaranteed growth bonds – but for all age groups The latest decision by the Bank of England to cut base rate from 0.5% to 0.25%, as well as expanding Quantitative Easing by £60billion, is supposedly designed to boost the economy. …

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    Pension consequences of QE could undermine policy intent

    Pension consequences of QE could undermine policy intent

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    4 August 2016 Further pain for UK pensions as QE worsens deficits and increases annuity costs Bank of England statement completely ignores pension impacts of its policies Estimates suggest deficits now approaching £1trillion – this cannot be sustainable Government needs to consider help for employers Today’s decision by the Bank of England to cut short-term interest rates and expand the QE programme is another blow for UK pensions.  Both defined benefit and defined contribution pensions have become more expensive as…

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    Rejoice or despair? Five years of record low rates and QE

    Rejoice or despair? Five years of record low rates and QE

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    28th February 2014 It is almost exactly 5 years since the Bank of England cut short-term interest rates to 0.5% and started printing billions of pounds to force long-term interest rates lower.  Good news for some?  Dreadful for others.  Should rates be rising or stay where they are? TEN REASONS TO REJOICE – these policies are great and have had tremendous benefits Borrowers have had a bonanza with mortgages getting cheaper and cheaper, encouraging people to borrow far more than…

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    Analysing BoE’s statistics on mortgage and savings interest rates

    Analysing BoE’s statistics on mortgage and savings interest rates

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    4 February 2014 No surprise there’s a housing bubble as latest Bank of England figures confirm bonanza for mortgage holders 100,000 Mortgage borrowers £3,300 a year better off Savers with £100,000 saved up are now £4,000 a year worse off Analysing the Bank of England’s statistics on interest rates in mortgage and savings markets since 2007 shows fascinating results.  The extent of income gains for mortgage borrowers is startling and the losses for savers are significant.  Those with the largest…

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    Prolonging the party – who wants rates to rise?

    Prolonging the party – who wants rates to rise?

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    31 January 2014 Bank of England statistics confirm bonanza for mortgage holders Mortgage borrowers may be £3,300a year better off and savers over £4000pa worse off Low rates are huge help for mortgagees – no wonder so many don’t want rates to rise Analysing the Bank of England’s statistics on interest rates in mortgage and savings markets since 2007 shows fascinating results.  The extent of income gains for mortgage borrowers is startling and the losses for savers are significant.  Those…

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    Well done Mr. Carney ….

    Well done Mr. Carney ….

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    28 November 2013 … for focussing Funding for Lending on business loans – which is what it should always have done. At long last some relief in sight for savers? The Bank of England’s announcement today that the Funding for Lending scheme will only be available for business lending, not mortgage lending, is fantastic news. At long last, there seems to be a recognition that there are real dangers of a housing bubble based on unsustainably cheap mortgages and that…

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    Rates are too low as economy booming – Forward Guidance looking backwards

    Rates are too low as economy booming – Forward Guidance looking backwards

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    14 November 2013 Bank of England repeating past mistakes – rates should start rising as UK growth set to surge Mortgage borrowers enticed into large loans at low rates as loan to income ratio returns to pre-crisis peak Keeping rates at 0.5% is about politics, not economics Take the squeeze off pensions and savers – and encourage companies to spend their £200bn cash pile UK economy is booming – but BoE looking backwards instead of forwards: The Bank of England has finally realised…

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    Potential good news for pensioners as gilt yields rise

    Potential good news for pensioners as gilt yields rise

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    17 September 2013 Rising gilt yields and revised regulations could increase pensioner incomes from income drawdown by 50% But inflexibility prevents pensioners from accessing more of their money By the time they are allowed to, the opportunity may be lost Need to make drawdown more flexible and allow for ill-health  Recent rises in gilt yields and Treasury rule changes for income drawdown mean people could now take much more money out of their pension funds than last year.  This should…

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