MoneyWeek issue 384 cover

Out of gas

16 May 2008 / Issue 384

Eleven ways to profit from the new scramble for oil... PLUS:

• Simon Nixon: the British economy is now in crisis

• The million-pound plumber to the rich

• Why Warren Buffet is tipping South Korea

Excerpt

Are we too dim to save?
Should you save more? Of course you should. So why don’t you? JP Morgan Chase thinks it knows the answer, says Anthony Hilton in the Evening Standard. In a report out this week, they claim that people in Britain don’t save because “they don’t really understand how to go about it”. I suspect this is nonsense.

Today our savings rate is around 3%. Back in the 1980s it was more like 10%. Did we somehow understand more then than we do now? Of course not. The truth is that an awful lot of people in the UK don’t save not because they are too dim to open a bank account, but because they get paid the minimum wage.

After paying all Gordon Brown’s rapacious taxes, their out-of-control mortgage or rent, buying a few bus tickets and eating, they’re lucky not to be bankrupt. Saving is a distant dream. And the rest of the country know perfectly well how to save – they just, as Hilton points out, don’t much like “the way they are treated when they do”.

Read the full editor’s letter here: Are we too dim to save?