Mr Gordon Cameron-Clegg

Gordon Cameron-Clegg is a regular guy. Married with two children both in full time employment and off his hands, Gordon has just retired. He has never been in debt but has spent what he earned.

He believed in following his Government’s lead and implied guidance. He has never bought a house; the curtailment of mortgage interest tax relief guided him here. He opted out of his employer’s pension scheme; the removal of c£5 billion a year ACT recovery from pension funds sent him a clear message. He had inherited some gold based shares but he sold these when his Government sold the national gold reserves thinking the timing must be right. He never fancied putting his hard earned taxed income into a stock market that could crash nor saw the point of cash investments, which were eroded without tax relief by Government planned inflation, yet were taxed on interest earned: often a negative net return.

Who will now pay for Gordon’s food and housing, his escalating medical care with expensive drugs and the long period nursing care resulting from his medically extended life? Although Gordon is debt free, his Government has borrowed extensively to fund current running expenses. They have borrowed for him. Who will repay the principal and interest on this debt? The simple answer to both questions is the same. The current and future generation of productive workers will pay for Gordon’s and their own upkeep plus repay Gordon’s debts, all from taxes from money they have yet to earn. The business equivalent is a company that contracts to pay its employees healthy pensions and plans to pay for them from profits it has yet to make.

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Busting the myth that savings are a drag on the economy

Several events in the last few days have shown just how urgent it is to have a voice for savers. Investment Life and Pensions Moneyfacts showed just how the saver has been the forgotten person of the Noughties. Through lower fund values and reduced annuity rates pension, incomes have fallen 72 per cent. A £100 a month contribution for 20 years into a personal pension maturing in 2000 would have bought a man of 65 yearly income of £9,000: Today the same payments would buy a yearly income worth a little over £2,500 a year.

All the focus tends to be on expenditure in the very short term Savings are thought to be a drag on the economy—hence the way that government in managing the crisis has put the interests of savers last with a policy package which has rewarded borrowers who have seen the cost of their borrowing fall by 50 per cent  or more as a direct transfer from savers. Savers have also had to contribute to the rising profits of the banks such as Santander in the UK. … Continue Reading

Living on the never never

As a nation we have deceived ourselves in believing that we could go on spending beyond our means. We have allowed consumerism to become our idol, no matter whether we had the income or not, a credit card was always there to feed our need for instant gratification. Why wait when you can have it now- instant credit, buy now pay later was the cry. With such an environment why bother to save. The result we have the highest level of household debt at 160% of national income, higher than Europe higher than the US.

One of the underlying causes of the credit crunch was the huge borrowing by the West from the likes of China, to finance our lifestyles and property bubble.

What is really disappointing in the Government’s response to the economic crisis is there has been no recognition of this. The government boasted that it had presided over 10 years of uninterrupted economic growth. The truth is a good part of this has been fuelled by debt. Its response to the bust has totally ignored the personal debt issue and the misery that uncontrolled debt can be become. Where is the encouragement to rebuild savings? Interest rates are at their lowest ever, tax relief on pensions for the more highly paid is being restricted and the implementation of the new National Pension Savings Scheme is being delayed so that it won’t be in force for all until 2017. … Continue Reading