One of the most notable years for me was 1963. Jennifer and I had just bought our first house for the princely sum of £1,400, which back then seemed an awful lot of money.
The year was also notable as being the last time savings ratios were as pathetically low as they were in the first quarter of this year, when they came out at a measly 1.7 per cent of disposable income. In other words, for every £100 of disposable income, the great British public saved just £1.70.
This low rate of saving highlights three key issues. The first is the horrendous mountain of personal debt that is again building up in the economy. The 2008 financial crisis was driven by cheap credit and the belief that private homes would never fall in value.
This led to the securitisation of toxic loans, which ultimately almost destroyed the US and UK banking system. While we are not at that stage yet – and banks now have to keep more capital in reserve – the dangers of rising personal debt are all too apparent.
The second concern is Fos. I was appalled at a recent adjudication where the Ombudsman apparently upheld a complaint on the basis that the individual would have needed to change his behaviour in order to save. This is a ridiculous assertion; the whole point of helping someone save or protect their family is for them to change their behaviour. The fact is that if they do not change, they will never achieve their objectives.
My final concern is the way the actions of successive governments and regulators have so dramatically reduced the number of advisers available to help, and, yes, persuade, consumers to save. It is great that advisers are now more professional and better trained. However, I am afraid that the cost, in both financial and human terms, has been unnecessarily high.
I believe the FCA has a responsibility to stop squeezing the sector and give us all the opportunity to do our job of helping more consumers protect their families and save for their futures. Hopefully, the outcome of the FSCS Review will be a major step forward in this direction.
In the meantime, I must confess that I have just spent more on a TV than our first house cost. How times change.
Ken Davy is chairman of SimplyBiz