Retire At 70

Tom McPhail of Hargreaves Lansdown has said that, wealthy footballers and celebs aside, in 10 years’ time 70 will be the normal retirement age.

This should hardly come as a surprise, given that people are living longer and that pensions (both state and private) cannot keep pace with the increase in longevity.

However, the Times quotes a report from Scottish Widows that says that households are prioritising living expenses, paying off debts and mortgage repayments over saving for retirement in the current uncertain economic climate.

At this point I would ask exactly what it is that Scottish Widows expect people to do?

Defaulting on mortgage payments or increasing debts (in order to save for the future) will simply add to the financial burden of people in later years as they grow older.

BBA Blames The Weather For Savings/Lending Imbalance

The British Bankers' Association (BBA) reports that personal deposits rose by 6.2% over the year to January. However, net mortgage borrowing from the banks grew by a mere 0.2% in the year to January.

The reason for such an imbalance (despite pressure from the government for the banks to lend more)?

The BBA blame the weather!

 

BBA statistics director, David Dooks said:

“January’s severe weather impacted adversely on what was already a subdued picture of borrowing demand from households and businesses. While general economic growth stalls, low consumer and business confidence generates a natural tendency to restrain borrowing appetite, repay borrowing where possible and to build up cash and savings as a buffer.”

Weasel words!

The reality is that banks are doing all they can to shore up their balance sheets, lest another self inflicted financial storm rocks their boat.

Legs Kicked From Under Property Market

New rules to be announced tomorrow by the FSA wrt conditions on which mortgages can be granted will kick the legs out from under the struggling property market and, by definition (since the British economy is underpinned by the property market), the economy.

The new rules will make it much harder for the following to take out a mortgage:

- those over 50
- the self employed
- those wishing to use an interest only mortgage

Thus, at a stroke, the tenuous recovery that might be occurring within the economy has been stymied.

Osborne's Statement on Barclays Fraud

I see that the Treasury state that George Osborne is to make a statement on the Barclays fraudulent manipulation of LIBOR:

"HM Treasury ‏@hmtreasury

The Chancellor will be making a statement to Parliament at around 1215 about the FSA investigation into bank borrowing rates, known as LIBOR"

You will observe that they have politely avoided using the word "fraud".

Whilst the avoidance of the word "fraud" may suit the sensibilities of those in Whitehall I suspect that, once people who owe Barclays money (eg mortgages, personal loans etc) wake up to the fact that the rates that they paid were based on the fraudulent manipulation of LIBOR, the word "fraud" will be liberally peppered across the myriad of class action suits that are bound to arise.

Barclays Rigs Libor

Advice from Zerohedge to anyone with a Barclays variable rate mortgage between 2005 and now:

"Our advice to anyone who had an adjustable rate mortgage in the period between 2005 and today: sue the living feces out of Barclays, and all other banks who crawl out of the woodwork with purported settlements. 

Because due to their undisputed mark manipulation, it is absolutely safe to say that ARMs, which rely on Libor for interest rate formation, were grossly manipulated by the same idiot traders who left written evidence of their manipulation year after year. 

Now it is their turn to pay."