Thursday 4 November 2010


More than a third of Britons drew money from their savings account to pay for household bills, 31% used savings for holiday expenses and 11% for ‘back to school’ costs, according to the latest savings monitor from ING Direct.

The research also shows that Britons are using savings to reduce debt and personal loans, with 20% saying that they use their reserves to cover payments.

What this means on a statistical average is that Britons are depleting their savings by £100 a month. And this is the scary thing. The average savings per person during the quarter from July to September was £1,771. This is down £279 on the previous quarter.

Now of course this is a statistical notion. We cannot draw the conclusion that at around £300 reduction per quarter everyone will be out of money completely in 18 months, but it is reasonable to assume that people are living beyond their means and on a very narrow shelf.

One small disaster, a new boiler, a big car repair, a dental crisis, and the whole thing goes belly up.

And that is before we get into the feast of spending and general greed that is Christmas.

People are facing hard times. With job security on such a shoogly nail Britons have only 40 days worth of pay in accessible cash at a time when it takes typically 6 months to get back into work after job loss. And it’s worse for young people between 16 and 24, who have on average just £348 in savings.

Frighteningly, it has been reported that one of the things that the Chinese government has been looking at is the need to start increasing the wages of the lower paid in order to try to bridge the gap between the poor and the wealthy. This is a smart move in a country that is walking a tightrope between free capitalism and authoritarian “communist” government: always a dangerous mixture. They realize that you can only push the poor so far, especially when there are vast numbers of them.

It is thought that the “single child” policy may be lifted and that wages will be increased. They can afford it. After a couple of years of annual growth dipped to 8%, China’s economy is growing at between 10 and 11%. But higher wages mean higher prices.

...And given that almost everything that ‘ordinary’ people buy in the UK originates in China (we know that the rich can buy German and Italian goods), and that these people’s savings are disappearing, what does the future hold?

My notes on First Minister's Questions are being delayed due to the fact that the cuts in funding (or rather the lack of increase in funding) seems to have affected the BBC's efficiency. Under FMQs for November 4, 2010, on the BBC iplayer, they are giving us "another opportunity to hear" last week's programme.

How kind!

I will write up my notes tonight, when, or rather if, Politics Scotland comes on line.


  1. Sorry guys, this post is way over my head! You'll need to define you obscure economic term for me...
    What exactly is a *savings account*?

    More seriously though, good post! Bringing China in to it highlights the global context very well.
    It is inevitable that China's wages will (continue to) rise, they have been for some time, in fact China itself does lose business to other countries in the region who are doing less well.
    It is the consequence of the economies of the world unifiying at a global level, like pressure in a system previously compartmentalised, once the barriers are removed the pressure redistributes throughout the system and will tend towards an average - some will increase some will decrease. Over time China will likely cross a threshold that will makes it less competitive as a manufacturer. They seem to know this all to well, their science and tech base is developing rapidly (they just got world #1 slot for supercomputers).
    This global process of equalisation in wages/productivity is also evident in the current currency 'battles', where currencies need to rebalance against one another at something closer to their 'true' values (particularly after the global financial scam and QE).

    Sad though that while China are focusing on narrowing the gap between rich and poor, we continue to go hell for leather to increase it :(

  2. Ah Dundee. When I said savings accounts, I should have said that wee jar where you put all your pennies and twopennies, maybe the off 5p: Then dip into it on Friday nights when you want a half pint and a packet of crisps.

    Yes, of course, as China becomes more and more expensive, there is always the opportunity for other countries to undercut it to provide Primark with clothes. Already I imagine that Pound shops are sourcing elsewhere.

    India, Brazil and Russia will want their share too.

    As you say, China is already moving into the sectors that we might have hoped to do well in...

    Vietnam, Laos, Cambodia and later Mongolia and Nepal will, I suppose have their turn, along with the ex Soviet countries. Do you remember when Eastern Europe was cheap?

  3. Tris

    For your report on FMQ, just take a leaf out of Blether with Brian,

    A very substantive group of questions brilliantly posed by the rapier sharp Iain Gray which reduced the First Minister to a quivering wreck today.

    Auntie Bella as usual showed her shrewd grasp of all things unionist today and the First Minister was left speechless.

    Tavish opened his mouth but nothing of substance was heard, something about a water taxi in Dunoon.

    All in all as our unbiased reporter from The London Times? (at Scottish FMQs, don't ask!) said a great day for the union. The voters will flock to the Westminster parties after this poor showing from Salmond.

  4. Tris

    and you not what those ungrateful 'Voters' do they blame whomever is in Government that's Democracy for you.

    Perhaps it is wise that the snp have accepted the inevitable and are preparing themselves for opposition

  5. Hey Niko,

    I can just imagine Salmond saying "Go back to your constituents and prepare for opposition. Iain Gray is your new leader".

  6. brownlie

    that is in fact what he is doing...........the games up

  7. "what does the future hold?"
    An ever increasing acceleration of The UK's and Western Democracy's decline. Deserved for voting in losers. Particularly but not only, socialists.

  8. Right thanks for that Dubbieside. I pretty much feel redundant now you've covered all the important points of the First Minister's weekly half hour opportunity to be outshone by these towering wits....

    Oh well, I suppose I can find something else to do with the evening

  9. Yeah right Niko old thing.

    The trouble with Labour is that they think we're all daft. Daft enough to think that all of this is the Tories' fault in England and the SNP's fault in Scotland.

    Did whatsit manage to ask any pertinent questions today?

  10. ARGH Brownlie. Be careful about putting things like that last statement in writing. It could cause suicides and mass emigration....

  11. Tell you want OR, you and Mrs OR pack up your stuff and head for Bonnie Scotland, (and bring that Yukka).

    We'll get independence and avoid Western Democracy's decline.... OK?

    Do remember to bring the Yukka....

  12. Niko,

    Up until now I thought you were a bit eccentric but after that comment I realise that you are stark raving bonkers - no offence, old chum.

    Incidentally, saw a guy in the pub on Sunday who was the spitting image of Bob Hoskins apart from not being very tall. At first I thought it might have been you but the chap bought a round so I realised that it couldn't be!!

  13. Where do the likes of Ing get their information. Is it now compulsory to tell your bank why you're withdrawing money?

    Take your time with FMQs Tris and don't let Dubbie lead you down the Murraygate in a car. :)

  14. Hum... A bit eccentric brownlie...

    He only gets out on Thursdays...

  15. I was wondering that SR. I thought, hello, I didn't take out that much last month...

    Someone must have taken my share. I bet it was brownlie, chatting up my mum with his flowers and presents...

    Geez SR, my mum told me not to talk to strange men... I'm going nowhere with Dubs!!


    PS. It's still not up!!!!!!

  16. Tris

    Did whatsit manage to ask any pertinent questions today?

    That would be-Alex what do you intend to in your retirement after may 2010

  17. ha ha Niko.... Don't be silly Eck's not nearly ready for retirement.

    Even if Labour gets in he'll still be there, making life unimaginably horrible for...erm.... thingy....