How will UK base rates perform in 2010?
As we move towards 2010 and hopefully a new era for the UK economy there is a consensus forecast that UK base rates will remain at around 0.5% for the vast majority of 2010. While this will no doubt cheer mortgage holders and those who have significant debt, we need to spare a thought for savers who have been absolutely hammered over the last two years.
It is easy to forget that many people, especially those of an older age, have saved large amounts of money for their retirement with many previously living off their interest. However, with base rates slashed to just 0.5% and savings rates still under significant pressure, the income stream from savings has all but dried up for many. This has put more and more people on the financial breadline and indeed the benefit system in the UK is starting to creek. At a time when the cost of living, especially utility bills, continues to rise in the UK there is genuine fear for the short to medium term.
Unfortunately, if the UK government is looking to encourage investment and spending in the UK there is a need to maintain base rates at a relatively low level with savers the obvious losers. While base rates are unlikely to move significantly higher in the short to medium term those who have in the past depended upon their savings income will likely need to start withdrawing their capital.
Share this..
Related stories
NS&I predicts savings downturn
Savings levels are likely to drop over the months to come, according to National Savings & Investments (NS&I).The government-backed accounts provider said that the proportion of income saved averaged 6.4 per cent over the summer and autumn.This is down on 2005's figure of 7.16 per cent - taken at a time when the economy was still booming.NS&I said that 47 per cent of people are still saving regula...
Read MoreMost people unaware of the new personal savings allowance
07/03/2016
Up to 90 per cent of people are unaware of changes to the new personal savings allowance, despite it coming into effect in less than one month time. The figure was uncovered by AA Financial Services, who conducted a study on people’s knowledge of the impending changes to the personal savings allowance. There will be several major changes to savings and taxation on 6th Apri...
Read MoreAre there sinister moves to discourage savers in the UK?
As interest rates continue to fall in the UK, with rumours that they will fall to around 0% in the short term, there is a growing belief of a sinister move to discourage UK savers from retaining their funds on deposit. We are already seeing many savings accounts with reduced interest rates and many savers have been forced to break into their nest eggs as their incomes have decreased substantially....
Read MoreEven Premium Bonds are feeling the pain!
In a sign of the times, it has been revealed that the National Savings and Investment company (NS&I), which administers the Premium Bond fund on behalf of the government, has decided upon a significant reduction in the prize fund. The fund will be cut from £58.9 million per month to £32.2 million a month which has effectively doubles the chance of hitting the jackpot to 36,000,000,000 to one.
Deputy Gov of the Bank of England criticises savers
In what could turn out to be a significant public relations disaster for the Bank of England, Charles Bean, the deputy governor, today suggested that savers in the UK should stop moaning and start spending. He believes that savers in the UK should not expect to live off their interest and openly admitted that low interest rates are part of a larger strategy to encourage spending from those who are...
Read More