Who do you believe?Posted on: 29 July 2010 by Editor at Large
As the Governor of the Bank of England announces that interest rates will remain low and that prosperity is not just around the corner, what can you do if you're on a fixed income with modest savings?
It’s that ‘old chestnut’ – the economy! It may seem boring, but when you are on a fixed income with a little bit of money saved, the fate of the economy and interest rates is very important to you.
Mervyn King, Governor of the Bank of England says its ‘still a long way from normal!’. He’s the man who should know. In his view we have a long way to go before we see long term economic stability. Interest rates will remain low. A blow to savers.
What then should the retired or about to retire citizen of the UK do? Well for a start, don’t retire yet. Annuity rates, used to set people's annual pension payments, have fallen steadily and aren’t going to give you a good return. If you can stay in a job, do so.
If you’ve already retired, then shop for bargains in everything you buy and conserve as much of your cash as you can.
It will be a long time before we see rates of 7 per cent again - if ever - so get the best return you can you can get for your savings and protect the capital. Locking your money away isn’t going to work against you.
If you have a garden or allotment, grow your own food. Travel by bus and put the car in the garage. When it comes to taking holidays, take the last minute end of line offers from the travel companies. Leave your credit card at home and take cash. Leave the mobile phone to keep it company: Those ‘roaming’ charges can kill you!
When winter comes, shut down the radiators in rooms you don’t use. You will save a ton of cash.
The good news is that if you own your own house, the chances are that it will still earn you money in the long term.
Above all, laugh in the face of adversity. It’s what we Brits are famous for, isn’t it?
Remember Hans Blix?
Hans Blix was the UN weapons inspector that ran around Iraq trying to find Saddam Hussein’s weapons of mass destruction.
This week he was giving evidence at the Iraq Inquiry. In essence he said that the Americans were ‘high for a war and didn’t think they needed a permission slip from the UN.’
Also, it was very difficult for the Iraqis to comply with the UN Directive when they had no weapons to show or give up!
What does all this add to our knowledge of the Iraq war? Not much save to confirm that Tony Blair was the lapdog of the US and took us into an unnecessary and illegal war.
Sadly, it was the children of other families that got killed fighting there. There were no casualties of war in the Bush or Blair households. Funny that.
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