George Osborne doesn't get it

The Tory party promises an end to the 'money for nothing' culture.

I wonder where they have been for the last year. With 0.5% interest rates we are now in 'nothing for money' land.

The full impact of it hadn't struck me till I did the sums. Suppose I managed to save a million quid. Cash in the bank. Most of us would think that made us rich.

Except that if you tried to live off the income you would be making five grand a year. That's less than five hundred quid more than the state pension for a single person, which many believe is set at a poverty rate.

Now of course, as a millionaire you do have the option of dipping into your capital. (Mind you, most people who manage to save that much tend to be conservative with their money, and generally don't like the idea of touching their capital at all.) And most people with that much in assets probably have a mix of asset classes, not just cash accounts.

None the less, the figure shows just how difficult it is to get a return on assets at the moment.

And George Osborne tells us we all need to save for the future.

Exactly why? Sorry George - you'd like me to save a million quid so that I can live in poverty? And meanwhile you are bailing out middle class families with big borrowings for big houses and big cars and big school fees? Meanwhile you are supporting interest rate cuts to 'get business moving' which mean that if I do save anything, I won't get a return on it?

This isn't just a Tory thing. All the political parties are currently showing a disconnect between what they tell us we need to do, and their actual economic policy. The Labour party for instance tells us to save more, then reduces VAT to encourage us to spend it instead.

These guys really need to take a course in behavioural finance.