April 1, 2010
April Fool’s day for savers
Every year there is a flurry of adverts extolling the virtue of maximising your tax allowance on savings. And every year I wonder if anyone falls for it. I mean – are you really beating the tax man if you pile any spare cash into low interest accounts? And who actually has any spare money anyway – apart from pensioners who presumably want to eke a bit more from their savings than the near zero returns that seem to be on offer.
Now I admit that I am not an independent financial adviser (IFA) but I am sure I can think of better things to do with my money – if I had any. For starters don’t pay into a pension would be my top piece of advice. Yes it is tax –free – and yes you might actually need the safety net of a pension in later life. But you never actually see all that money ever again as the financial institutions hang on to it. And we now know they are both reckless and stupid in their use of your money. Much better to invest it yourself – which you can now do with a self-invested pension plan.
I doubt there are many people lending and borrowing to fund their investment strategy any more. Yet a couple of years ago you could make a very comfortable living backing winners in a one horse race. The housing market was a win-win situation too. And a licence to print money.
And what about the people who dropped us into the current mess? No – not politicians. The banks! Now you and I don’t have to make the decision to switch bank account at the touch of a button. The government have effectively done it for us. As a tax payer we now own more banks than you can shake a stick at.
I feel decidedly sick every time I think how much money has been thrown away propping up greedy and incompetent bankers. Remember all the fuss about supporting miners, steel workers, car workers etc. All those businesses were enthusiastically allowed to die because they would cost money to keep going. Yet all three put together would cost just a fraction of the money put into banking.
It makes me think the best investment strategy at the moment is to look for an affordable health insurance quote – and get on board with that. After all, if your blood is boiling every time you see the financial news… your health must surely be at risk!
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