I have been thinking of late how I and the many thousands like me who have some savings, can earn a decent rate of interest, but also help the economy. This coalition government needs to find a way to optimise the use of all its resources: that’s us the people, our savings, our desire to work and earn a living, and our ideas. How best to put that to the best interest of our great country.
Well, I have £5000 in a savings account earning me close to 0%, and I am sure there are quite a few pensioners who have that and more earning a pittance. How about someone, a ‘bank’, make us an offer we can’t refuse. How about offering us 5% interest on our savings, tax free (there’s the government buy in to the scheme). Allow us for example one free withdrawal a month, and make it an annual contract. In this way the ‘bank’ will easily accumulate £10billion (that’s £5000 from 2million people), and it will make a substantial difference to the many pensioners dependant on the interest their money earns. According to an article there is over £750billion in pensions and savings accounts, so reaching £10billion shouldn’t be difficult.
The 5% interest rate can be achieved if the Bank lends out the money to small or medium sized UK companies at say 5.5% or 6% (the benefit to the bank is 0.5% – 1% earned). And low interest rate loans to local companies will enable them to employ more local people. Now we’re talking about using under-utilized savings to fund companies desperate for loans to hire more underutilized Brits. It’s a win-win-win, and all it will cost the government is the tax on the interest it would otherwise have received from the savings.
I had thought we would need a government bank (remember Nationwide) to manage this, but I fancy Richard Branson and his Virgin Money could run this. A new bank, looking to make a difference, what do you say Richard, how about a Virgin Bank for the people, or a People’s bank? My money is yours for the asking, at 5% tax free interest, I reckon you’ll have a queue to your door.
1st published 25 September 2012
