What with the troubles with the American and British finance industry, our fiat currency (fiat currency means currency that is created out of nothing and without any work. It is not convertible into a physical quantity ( such as gold ) and is accepted as a medium of exchange due to government fiat or decree). is going to plummet through the floor, and even the large interest rates of up to 8% offered by some banks are not going to keep the purchasing power of our savings up.
And, as one blog states, “one side-effect of the collapsing pound is that Britain will have to pay £8 billion extra into EU coffers by 2013 according to research by Open Europe. That is equivalent to a penny on income tax for the next 5 years.”
The important paragraph, if you click on the above link, is:
“UK in-year contributions to the EC budget are not affected by exchange rate contributions. This is because VAT and GNI contributions , and any revisions to the VAT and GNI bases, are made on using a fixed exchange rate that is set on the last working day prior to the start of the EC budget year. However, the UK’s net contribution over a given period will also depend on the level of UK receipts. Unlike UK VAT and GNI contributions, the exchange rate used for receipts fluctuates in-year and is fixed two days before any payment is made to the UK. Exchange rate changes are one of the factors that affect the forecast of future UK contributions, which are published twice a year in the budget and PBR.
Do take a look at putting some of your savings into Gold. Goldmoney is a well established company and your holdings are insured by Lloyd’s of London. If you prefer to have coinage, the Krugerrand has an ounce of pure gold in it, and the surcharge for buying is just 1% nowadays. The coin actually weighs 1.09 ozs as it is 22 carat and the extra makes up for the alloy. So buying Krugerrands does mean you have a full ounce of pure gold for each coin. One advantage is, the Krugerrand is legal currency in South Africa so, if the British Government copy the American example of banning its citizens from holding gold bullion, you can by-pass the law by holding ¨legal currency¨.