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When will UK savers be rewarded?

At a time when many in the UK are up to their eyeballs in debt it would seem that the government is unwilling to help with those who are saved for years in the hope of giving themselves a comfortable retirement. So how can it be those who have overextended their finances in the short term are the recipients of taxpayer funding while those who have reduced their dependence on the state continue to suffer?

The truth is that in order for the UK economy to grow we need to see an increase in credit and an increase in disposable income. However, as UK base rates have been reduced to 0.5% in recent times, in order to make credit as available as possible, the flipside of the coin has been a reduction in income and interest earned for those who have money on deposit. Indeed, after today's December inflation figures showed a rise to 2.9% many savers will be seeing reduced spending power for their nest eggs with very few savings accounts offering anywhere near 2.9% interest.

While this will not last forever and in time savers will again receive larger incomes and improved interest rates, it is ironic that those who have overextended themselves and are now in financial trouble are the ones who are being saved by the government at the expense of those who have been perhaps more diligent with their finances.

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