There is new national debt data out today. This was my reaction to the announcement from the Office for National Statistics on Twitter:
I am making a very deliberate point. In a world overflowing with savings (because the wealthy are getting ever-richer) a great deal is being deposited with the government. Isn't that good news? And shouldn't it be promoting the idea that people could do this to transform our economy for the better?
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Richard,
I know I bang on about this and I appreciate that your time is limited.
Apart from providing funding, what about the role of ‘National Savings’ in firstly helping those on a low income in particular to build up some savings. Secondly, and its not that easy to do without providing a subsidy to the already well off, what about its role in diverting money away from risky or undesirable ‘investments’ eg Buy to Let, vintage cars etc by providing products that are sufficiently good to discourage those sorts of schemes?
I like the former
The latter is about risk appetite. NS&I is not going to offer high risk returns
Of course, ultimately, all our government created money ends up with the government; either gilts, CBRAs or National Savings…. but the make up matters.
Every pound held in NS&I is one less pound in some bank’s CBRA account. The government is still paying interest but at 4% instead of 5.25% and direct to people rather than banks. Now, one may still be unhappy with the government paying too much interest…. but it could, if it wished, address this through the tax system.
Now, NS&I, time to start offering gilts to the general public! Currently, If I want to “lock in” to higher rates offered by their fixed term bonds I do get a rate that compares well with gilts but I can’t get my money out until maturity…. unlike gilts that can always be sold if I need the money in a hurry.
Agreed, entirely
Hi Richard
According to the BBC, it is doom and gloom:
https://www.bbc.co.uk/news/articles/cgxqzp2zdw4o
However, is there anywhere to find a breakdown of what constitutes these savings?
Regards
Yes
The detail is behind the ONS release, but it is very messy andvtake me a long time to work out
It is better than it was because I engaged with them on one element – but I have not got time to explain now