Thursday, 31 January 2013

UK Interest Rates

I received a letter from my bank today, re the interest rate on my savings account, which is currently a meagre 3.20%.

They advised me that, from April, the rate will decrease to 0.50% (due to the bonus ending).

This is a ridiculous state of affairs.

The controversial £80bn Funding For Lending (FLS) scheme has been widely blamed for the cuts. The FLS offers banks and building societies access to cheap money to fund mortgage lending. Since its launch in the autumn, the rates paid on savings accounts have tumbled, as banks no longer need to compete to get deposits from ordinary savers to fund their lending. 

Who else can be culpable, other than the Government and the Bank of England?

Ros Altmann, the director-general of Saga, said government policy was punishing the nation's savers. "It has been obvious for some time that policymakers don't care about the suffering of savers," she said.

Sylvia Waycot of said: "Savers are being persecuted without borrowers getting the rewards." 

When are they going to stop punishing savers, by their ghastly policy of artificially low interest rates?

Will the new Governor of the Bank of England, Mr Carney, change course?

Of course I shall review my personal circumstances in April. I notice that the current best interest rates for savers are languishing at about 2.35%.


Anonymous said...

Hello, let me just say that I really enjoy your blog.
Your 2 latest posts affect me also. James may wish to avail of Visioncall, a travelling optician company based with Alexanders in Lurgan. They are excellent - my husband is suffering from a brain tumour and is unable to get out.
As for your savings, I believe the thing to do is to march into the bank each year and demand their best deal. If you deal with different banks, it is a visit to each one. Really, the rates should last as long as you have the account.

Anonymous said...

I would not leave any substantial sum in a bank, purely for fiscal reasons. Bear in mind that they work for the shareholder. With a managed portfolio of equities you could expect to return between 6 and 10% at the moment, plus have the advantage of a little excitement with the vagaries of the stock market.

Timothy Belmont said...

Anon, many thanks for that. I phoned the home last night and James's optician had been in touch.

Re rates: I do shop around!


Timothy Belmont said...

Anon, Many thanks re the stock market: I tend to be cautious these days, alas; ever since I lost my shares in Northern Rock and the Lloyd's shares are worth a meagre few pennies! I still own quite a few Lloyd's TSB shares - I bought them at about 90p a few decades ago; they went up to £10; I sold as many as possible at about £8.80, though.

My confidence needs to be restored before Idive in again!