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Breaking Free
“True individual freedom cannot exist without economic security and independence” Franklin D. Roosevelt
A year ago, I wrote “There is no doubt now that we are in a recession – the only questions are how deep and how long.” Things are clearer now, and at last we are beginning to see some genuine green shoots. In the UK, we look to be returning to growth this quarter – behind the USA and most of Continental Europe.
The Bank of England has signalled an end to “Quantitative Easing” – the modern form of printing money. They are now expecting a “V” shaped recovery – in other words, not the “double dip” that many fear. The increase in unemployment shows signs of slowing – although I would not read too much into official figures in the run up to a general election.
There has been a tremendous cost to our recovery – banks continue to suck in public money; the UK’s “AAA” credit rating is under threat; Sterling has suffered. Whoever wins the election, we can all expect to pay higher taxes for reduced public services. Many people, like the nation, are discovering the downside of living on credit – and they too want to break free.
The markets for savings and investment remain heavily distorted. This is no ordinary recession, and the return to normal conditions will be both difficult and protracted. Low interest rates have made ordinary saving unattractive, and you need to tie up your cash in order to get a good rate.
Investment markets have also benefited from cash seeking a good home. Shares have had a very good run since March, helped by the signs that the global recession is coming to an end. Corporate debt has largely recovered from its distressed state. Property markets look to have bottomed out.
Our members have shared in this recovery if they have lump sums invested with us or they save regularly. Payroll deduction makes saving as painless as possible and enables you to build up a nest egg. Saving this way, along with paying off credit cards and other debts, can help you make the transition to financial security. Of course, you must also learn to live with spending less – there really is no such thing as a “free lunch”.
At MPFS, we offer a 5 year savings plan alongside more conventional plans that run for 10 or more years. Many of our members take out a new plan each year so, after the first 5 years, there is always a plan maturing to fund Christmas, or their holidays – or to clear those credit card debts afterwards! Ask us for details of our rolling 5 year plan. We also have more flexible plans, like the ISA, which can similarly be funded through payroll deduction.
This article has been submitted by Stuart Bell, Chief Executive at Metropolitan Police Friendly Society (MPFS)
For further information please call Metphone 28192, telephone 01689 891454 or visit
www.mpfs.org.uk
