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Post by yorkshireman on May 30, 2014 11:29:03 GMT
Yes, I think caution should be the watchword generally but especially, and this is not a criticism, with 5 year rates of 5.7 /5.8% as currently offered on Ratesetter.
I still hold 3 year loans which are under 2.5 years old with Ratesetter at rates in excess of 7.0% compared to the 4.4 / 4.5% currently available.
If rates can fall by 2.5 percentage points in not much more than 2 years I take the view that they could rise by that amount over a similar period which if applied to 5 year loans could mean that we would be looking at rates in the region of 8%.
www.dailymail.co.uk/money/saving/article-2642905/NS-I-Pensioner-Bonds-create-savings-stampede-banks.html#ixzz33BwnB3k3
Perhaps the Nationwide guy is expressing the fears of the banking fraternity as a whole that if there is a stampede to grab the “deal of the century” (ROFL  ) banks and building societies will have no choice but to increase rates ahead of the BoE in order to attract funds.
I still stand by my comments in January that rates for 5 years, even at the 6% plus currently available, should be viewed with caution as there are a number of factors that could force rates higher, funds being transferred to pensioner bonds being only a tiny part of the equation, inflation will increase in the medium term regardless of what the “experts” say and the political outlook is uncertain. I won’t expand on the second point as I don’t want banning for expressing what may be interpreted as biased political views.
Suffice to say that I won’t be putting money into the NS & I product, if nothing else the rates are risible.
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Post by yorkshireman on May 30, 2014 11:36:34 GMT
Perhaps it’s me but I find the quote and edit functions on this forum to be more difficult to use than Assetz Capital’s auto invest feature!! 
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Post by davee39 on May 30, 2014 12:34:05 GMT
Firstly, banks did not massively cut their rates when bank rate fell to 0.5%, the dramatic drop was caused when they were were stuffed with free money under funding for lending. I am rather astonished to learn that Nationwide feels unable to compete. I thought a market varied pricing according to supply and demand, hence an increase in rates to savers, an increase in mortgage costs and a tiny slowing of the housing bubble. WIN WIN WIN (So speaks a disgruntled saver who has been mortgage free for 10 years).
However these rates are not aimed at sophisticated savers who (I hope) understand the risks involved in chasing rates via exotic products. I am familiar with an elderly relative who has £40k earning 0.1% with a high street bank (which she trusts having banked there for 50+ years). So far suggestions that the money be moved to improve the return have not led to any change so any fallout from the pensioner bond might also help savers in these Zombie accounts.
Finally, just what kind of rate is acceptable, and how much risk should be taken to chase it? Zopa and RS seem pretty good for relatively low risk deals. Property safety is a myth, Look at Halifax, the Co-Op or the entire Irish Banking system to see what happens to asset backed loans when markets fall after a spot of bubbling. What most rate chasers are expecting is that they will get to the exit before the buildings fall down.
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Post by oldnick on May 30, 2014 13:31:19 GMT
Yes, I think caution should be the watchword generally but especially, and this is not a criticism, with 5 year rates of 5.7 /5.8% as currently offered on Ratesetter.
I still hold 3 year loans which are under 2.5 years old with Ratesetter at rates in excess of 7.0% compared to the 4.4 / 4.5% currently available.
If rates can fall by 2.5 percentage points in not much more than 2 years I take the view that they could rise by that amount over a similar period which if applied to 5 year loans could mean that we would be looking at rates in the region of 8%.
www.dailymail.co.uk/money/saving/article-2642905/NS-I-Pensioner-Bonds-create-savings-stampede-banks.html#ixzz33BwnB3k3
Perhaps the Nationwide guy is expressing the fears of the banking fraternity as a whole that if there is a stampede to grab the “deal of the century” (ROFL ) banks and building societies will have no choice but to increase rates ahead of the BoE in order to attract funds.
I still stand by my comments in January that rates for 5 years, even at the 6% plus currently available, should be viewed with caution as there are a number of factors that could force rates higher, funds being transferred to pensioner bonds being only a tiny part of the equation, inflation will increase in the medium term regardless of what the “experts” say and the political outlook is uncertain. I won’t expand on the second point as I don’t want banning for expressing what may be interpreted as biased political views.
Suffice to say that I won’t be putting money into the NS & I product, if nothing else the rates are risible.
Check the forum rules - no mention of biassed political views being prohibited. Just avoid defaming individuals and keep it gentlemanly. Over to you. :-)
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Post by bracknellboy on May 30, 2014 13:39:57 GMT
Agreed: +1. Or should that be "May 30, 2014 12:36:34 GMT 1 yorkshireman said: Perhaps it’s me but I find the quote and edit functions on this forum to be more difficult to use than Assetz Capital’s auto invest feature!! " Ah, b********, forget it.
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Post by yorkshireman on May 30, 2014 14:14:37 GMT
Firstly, banks did not massively cut their rates when bank rate fell to 0.5%, the dramatic drop was caused when they were were stuffed with free money under funding for lending. I am rather astonished to learn that Nationwide feels unable to compete. I thought a market varied pricing according to supply and demand, hence an increase in rates to savers, an increase in mortgage costs and a tiny slowing of the housing bubble. WIN WIN WIN (So speaks a disgruntled saver who has been mortgage free for 10 years). However these rates are not aimed at sophisticated savers who (I hope) understand the risks involved in chasing rates via exotic products. I am familiar with an elderly relative who has £40k earning 0.1% with a high street bank (which she trusts having banked there for 50+ years). So far suggestions that the money be moved to improve the return have not led to any change so any fallout from the pensioner bond might also help savers in these Zombie accounts. Finally, just what kind of rate is acceptable, and how much risk should be taken to chase it? Zopa and RS seem pretty good for relatively low risk deals. Property safety is a myth, Look at Halifax, the Co-Op or the entire Irish Banking system to see what happens to asset backed loans when markets fall after a spot of bubbling. What most rate chasers are expecting is that they will get to the exit before the buildings fall down. I’m afraid that I can’t agree that funding for lending has been the main reason for banks cutting rates although I do accept that it has accelerated these cuts from an already low base. Looking through my records it appears that the rot set in from early 2011 onwards when several good deals came to an end and were replaced with lower offers.
To answer your question regarding what kind of rate is acceptable, for me 5.5 to 6% for 3 years maximum in a bank or building society with full FSCS cover for perhaps half of my money, this was available in 2007/2008 if you recall. However, I am prepared to take some risk provided the return is commensurate which is where P2P comes in!
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