What does 2009 hold for UK savers?
As we enter 2009 there has been much talk of tax incentives for UK savers who have seen their incomes decimated by the ever falling UK base rate. While base rates are currently at 2%, many savers are receiving substantially less than this and many accounts are offering only minimal returns. The short-term outlook is even worse for UK savers with interest rates forecast to go down to around 0% which would see many savers having to eat into their nest eggs earlier than they had hoped. So what does the future hold?
There is no doubt that the UK government will need to address the problem of UK savers in the short to medium term otherwise we will have another serious problem on our hands. The more savers who were forced to eat into their nest eggs the more potential benefit claims the government will have to handle in the future, putting more stress on the UK budget. It is something of a very difficult balancing act but one which needs to be addressed sooner rather than later.
There is also a concern that more and more homeowners in the UK are using their savings to pay off their mortgages as their incomes continue to fall and pressure in the jobs market comes to the fore. If the recession in the UK is long-lasting then many homeowners will soon run out of savings to cover their mortgages and encounter serious financial challenges.
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