New Home Owners And Snagging Forum
Investments => Cash ISAs and saving accounts => Topic started by: The Prophet on March 23, 2013, 11:14:42 am
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Cyprus savers will still lose less than UK savers!
Even with the 'savings tax' in Cyprus, they are still better off than savers in the UK!
Why, well the ultra loose UK monetary policy has devalued the pound and kept interest rates artificially low and inflation high for years.
If you put £50,000 in a Cypriot bank in January 2008 you would have got 74p per Euro giving you €67,600.
Over the last few years a typical interest rate paid by a Cypriot bank was around 4% - 5%.
At 4.5% you would now have €84,240. Even after paying the 6,75% tax on your savings, (which has now been rejected by the Cypriot government for accounts with less than €100,000), you would still have €78,554 converted back to sterling leaves you with £66,770.
Compare that to the return from a UK bank.
At an average interest rate of 3.12% over the period, (because rates were still high in 2008) you would have just £58,317.
You would be £8,453 better off investing in Cyprus, even with the proposed tax raid!
Without the tax raid you are £13,287 better off in Cyprus.
Considering the effect of inflation over the period and your savings would have needed to grow to £58,579 to stand still and have the same purchasing power. By saving in Britain you have lost £262 in real terms.
Be under no illusions, one way or another, the UK government is stealing your savings - you just don't notice it.
At least the Cypriots are being open and upfront.