Stop demonising saving

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“Keep calm and carry on spending” could be the mantra of the government and, indeed, the British people as a whole. Spend, spend, spend and, whatever you do, don’t save. That is held to be the cure both personally and nationally.

Except it clearly is not.

Recently, the General Secretary of Unite, Len McCluskey said: “The minimum wage should increase because if low-paid workers received an extra £40 a week they’d spend it, not put it into some fund in the Cayman Islands.” In theory, I am all for raising the minimum wage. I believe it is pitifully low in the UK and is not helping people meet the ever-rising cost of living. But I also appreciate that businesses which bear the brunt of it, in particular small and medium-sized ones, will suffer as a result. The difficulties this causes them would, in turn, raise costs for consumers.

However, what really vexes me about McCluskey’s comment is the way in which saving is portrayed as some abstract concept restricted to the filthy rich. Does he not realise that saving is something the less well-off have to do simply to survive?

McCluskey also said that the third week of every month is turning into ‘Wonga Week’, a reference to people resorting to pay-day loan companies to bridge the gap. Surely this is another reason to try and save, to put aside that little bit every month so as not to have to rely on such desperate measures.

Why is saving portrayed as being for the rich?

Why then is saving portrayed as something only the rich do to make themselves richer? Most savers I know live within their budget because they have to; they cut down on luxuries and unnecessary items and set aside a certain amount of money in order to cover the growing cost of living. For many, savings provide the only source of income to live off which, thanks to the Bank of England, it is now impossible to do so.

Earning more is essential in meeting the cost of living. We might want to put some money aside for our children’s future or our emergency fund, for those irritating things that arise out of nowhere. The car might need fixing, the plumber might need to be called out, the children might need new school things. But that extra money needs to be set aside in the first place or it cannot be spent at all.

Pressing for energy bills to be capped too is actually a wise request and makes perfect sense in helping people to budget and meet the cost of living. This would help so many people across the nation. I am sure the energy companies would vehemently disagree but practically we can all deem this a prudent incentive for recovery.

Pay-day splurging

Another example of anti-saving propaganda I have noticed is a trend in women’s magazines that actively extols the virtues of pay-day splurging. We’ve all been there, waiting for the day our wages go into the bank with the eagerness of Billy Bunter anticipating a postal order. We make promises to our friends; we can meet up when we get paid or we can book that holiday when the dosh turns up. But this only works if our wages are good enough in the first place and if the cost does not exceed what is paid in. This is not complex economics, merely common sense.

An article about spending your next wage packet on the latest Louboutin stilettos is far more enticing than an article advising how to invest your next pay packet in a savings account.

But the way these pieces are written is, to me, the height of irresponsibility. Flighty, spendthrift women spending their wages on shoes is all very well; it is, after all, their money to do so as they wish. But if they end up out of pocket as a result and are not putting money aside in savings to meet those unexpected future costs, then the magazines that encourage such behaviour are doing their readers and the nation a disservice. Sensible debt management is, I suppose, not very sexy. An article about spending your next wage packet on the latest Louboutin stilettos is far more enticing than an article advising how to invest your next pay packet in a savings account.

Can savings be sexed up?

How do you sex up savings? I am afraid that is impossible. While savers continue to be penalised, saving seems an irrational and pointless use of funds to the average person. However, self-reliance and independence are traits to be admired and saving instils both these.

McCluskey is right in saying that the government has pushed ordinary people deeper into debt. But when will they see that the measures implemented so far have not worked and that a different attack must be made on the debt crisis and recession?

As Einstein once rightly said, insanity is doing the same thing over and over again and expecting a different result. By this reasoning we are being led by a government and Bank of England who are both insane in penalising savers and mass overspending. It is about time we restored some sanity in managing the crisis and ensuring that we can and will recover at some point in the not too distant future.

A guest blog by Charlotte Sabel. The views expressed are those of the author.

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9 Comments

1. john in cheshire

   October 4, 2012 at 9:38 pm

   Why would anyone take any notice of a low IQ union leader who is clearly only interested in protecting his own financial situation. If the unions were actually representing their members there wouldn’t be so many indigenous people out of work and so many immigrants in work. But, as I see it, the unions are working hand in fist with the socialists in our midst, to annihilate the indigenous peoples of our country and replace them with immigrants.

   Recommend (9)
2. John.

   October 4, 2012 at 11:04 pm

   Einstein is also alleged to have said that compound interest is the most powerful force in the universe. I’m quite sure the crooks behind central banking peddling their wealth transfer tokens backed by nothing, understand that sentiment all too well and would wholeheartedly agree. When the wheels do eventually fall off, and fractional reserve banking ensures they will at some point, it is the plebs who’ll end up carrying the can not the banking bonus billionaires.

   Recommend (4)
3. marianne

   October 5, 2012 at 12:45 am

   But doesn,t the present model of extreme capitalism depend ond the established pattern of endless production, endless consumption,endless taxation and state spending…regardless ofthe consequences.The Chinese state, having seen a decline in its export market is incentivising its population to move from saving to consuming.As members fo the public so many of us give constructive thought to improving our countryand make good suggestions but I sense that the members of the major parties are just members of an international rich elite who are not that bothered about the problems of a declining Uk, but only out to extract the last bit of wealth from the country.We note the very care less attitude of the present bunch and all the oversights , evasions and bodges.Is the only answer for an IT clever citizen to set up a citizen protest site,advertised on Facebook, to state that people supporting willonly vote for the following manifesto; in other words the citizens devise the manifesto, not the politicians.Because I distrust the statement;most people in the uk say—no one in over sixty years vhas ever asked me anywhere what I think about anything. So much for surveys! I can see that devising a citizen manifesto is best with problems , because there is a multitude of views and individual vested interests out there but it can surely be done and is poossibly the only way to counteract the entrenched powers.

   Recommend (5)
4. frances

   October 5, 2012 at 9:00 am

   The establishment and half the population see the over 60s as dead and past it and only useful for stealing savings from or gaining IHT when they die
   The current full state pension is a miserly £105 a week assuming you have worked for 39 years

   If you have no savings the Pension Credit pushes it up to £132

   However the majority of women now in their 60s/70s were the generation who had no choice but to stay home and care for their children because there was no childcare or part time jobs and then they cared for elderly parents hence they like me only get £56 a week in state Pension

   Just who can live on any of those figures ?

   So its very clear from George Osborne attitude he wishes we would all stave to death /die of hypothermia or just curl up and die

   The fact we were born here and have generations of forbears here and have worked all our lives is irrelevant in their eyes because the ones who benefit big time are the layabouts /the scroungers and the countless millions of illegal immigrants

   Recommend (6)
5. Charlotte

   October 5, 2012 at 10:10 am

   I do think that talk of illegal immigrants is totally irrelevant here. It merely subtracts from the issue and diminishes the point.

   Savers come from all backgrounds and include legal migrant workers who are hard working individuals with every right to work in the UK doing some of the jobs that lazy Britons cannot be bothered to do.
   I would assume as a penalised sector in society, savers would know better than to be rude about another group already marginalised in our society.

   And I do believe in the power of unions for good in seeking better working conditions and pay for workers, this is not a matter of left versus right but how best to include everyone so we live in a just and interdependent society. Something perhaps which the government might like to consider sometime.

   This article is merely to demonstrate how saving has become the enemy of recovery or economic stability and is now seemingly universally considered as something only for the rich or pensioners.
   All of which as we know is totally false.

   Recommend (3)
6. frances

   October 5, 2012 at 1:02 pm

   As a pensioner totally dependant on savings income and living where i do i feel totally and utterly penalised for scrimping and scraping trying to save for old age and feel like a stranger in my own country

   I would be far better off having sat on my rear end or blown the lot and held my hand out

   the Rich are benefitting handsomely out of the B of E actions as are all those who have never paid a penny into the system
   The population has exploded by 4 million in immigration recently and they all get far more in benefits than i do so i am fully entitled to feel exactly the way i do .

   No wonder the Country is in dire straits

   Recommend (4)
7. WH

   October 5, 2012 at 5:52 pm

   frances says:
   However the majority of women now in their 60s/70s were the generation who had no choice but to stay home and care for their children because there was no childcare or part time jobs and then they cared for elderly parents hence they like me only get £56 a week in state Pension.

   Have you checked for the benefit of home duties looking after
   children for previous decades (if you did) and enquired if you
   are due a revision and back payment accordingly?

   Recommend (0)
8. frances

   October 5, 2012 at 6:33 pm

   Home responsibilities protection did not kick in until my kids had nearly finished school so £56 is all I get for 19 years of work as opposed to full state pension for 39 years

   I am very very careful to check everything

   Recommend (1)
9. Me

   October 9, 2012 at 10:08 pm

   Savers will continue to be demonised as long as Mervyn KIng and George Osborne continue to protect their bosses – the historically dominant banking families. You all know which family is calling all the shots with the UK economy don’t you and Osborne and King are just lackeys to this family. This family are also the ones pushing climate change agenda within the UK which is pointless unless unless the likes of the USA, India and China take an active part in emmissions. Cameron is also acting as a lackey on the climate change front.

   It’s time to stop this greedy, super rich, dictating family stealing the wealth of the UK working / middle classes and pensioners.

   Recommend (13)