Can we save our savings?

We’re in the mother of all recessions.  And one of the reasons this country is so deep in the mire is that our habit of living off borrowings has come back to bite us.  Even that most sacred of British holy grails – giving yourself the millstone of a mortgage only works if you believe that the house you will eventually own is worth having.  And our loathing for all things to do with estate agents tends to suggest that even house owners do not believe in their own publicity.

The terrible thing is that the recession is a very good thing… apart for the unfortunate minority who have lost their jobs or can’t get one.  If you are gainfully employed you are quids in… especially if you’re used to the idea of paying off mountainous debts at ruinous rates of interest.  Let’s face it, today’s interest rates of less than 1% are very good news indeed for debtors.  But miniscule interest rates do not make particularly exciting savings news.

So imagine the problem if you actually have some money and want it to work for you, rather than spend it.  Or worse still, you’re one of the ever-increasing army of pensioners who rely on savings for income.  How are those big-bonus paying banks like Barclays or a bank we bailed out like our very-own Royal Bank of Scotland going to help out?  Erm – well that it seems is your problem.

The end of the tax year is fast-approaching – and with it comes the annual opportunity to put a big chunk of money in cash ISA savings account to maximise this year’s tax-free savings.  Except of course levels of interest are at an all time low and it hardly seems worth the bother.

Nor are the savings options looking any more enticing if you cast your net a little wider.  I have just been looking at the self-investment options available to Halifax account holders and comparing them to what’s on offer with Nationwide Savings and Investments.  The answer seems to be – not a lot.

One foolproof way to get rich seems to be to run (and bust) a major bank such as the RBS.  Maybe we’ll get rich too – as we now own it.  But you don’t seem to get money tips like that in the the Telegraph’s money section

All in all the level of interest is so low that you feel you may as well spend it.  Or at the very least buy plenty of premium bonds.  At least with premium bonds you enjoy the dubious privilege of non-existent interest with the vague possibility of becoming a millionaire.

I suspect that every moderately well-off pensioner thinks the same way and has a big wedge of premium bonds.  But even if they win it will be a little bit depressing.  What is the point of becoming a millionaire if you are too old to enjoy it?