Enable’s experienced IFA’s in Bishop’s Stortford know that the theory behind the Bank rate cut is sound in so far as when consumers see a cut in their mortgage bill, and a worsening return on their savings, they go out and spend. Hence, there is a boost to the economy. The very same logic applies to businesses who will be more inclined to invest thus seeing us through this tricky time.
This is obviously a simplistic explanation but it does make it clear why they are cutting the Bank rate and that a Bank rate cut continues to be bad for savers. Savings interest rates have been fairly pitiful for years, and even those locking in their savings for five years are only getting an average of 1.97% in interest. Susan Hannums, of SavingsChampion.co.uk. said: “Many savings accounts could not even suffer a quarter point cut. With almost a third of easy access accounts currently paying 0.25% or less, savers need to act now to better their returns.”
About three-quarters of bank current accounts do not pay interest at all and for every savings rate that has been increased in 2016, around nine have been cut, according to data from financial information service Moneyfacts. Even those that have are about to change.
MoneySavingExpert.com founder Martin Lewis said: “Santander 123 has been a beacon, shining out for those with a decent chunk of cash, as at 3% it pays decent interest. Now it’s halving that, meaning for those with £20,000 saved, it drops from roughly £600 to £300 a year.” Mr Lewis added: “Unfortunately, it is likely Santander is just at the vanguard of rate cuts. Its main competition, the other banks with high interest accounts, may well cut those too. Enable’s IFA’s in Bishops Stortford are happy to help you look at your savings plans.
Issued by: Enable Independent Financial Life Planners • 25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority. It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us. NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE