You are here: Home - Uncategorized -

No savings graces

Written by:

Savings rates are being cut again and consumers are not best pleased, as Mike Collins finds out

Despite the Bank Base Rate having remained at 4.5% since last August, many savings providers have been cutting the interest rates payable on their accounts, much to the consternation of people who were lured into opening one by the promise of good rates. Providers that have cut their rates recently, in some cases by up to 0.25%, include Nationwide, Abbey and Yorkshire Bank.

”I opened an account with a big High Street company which was paying me 4.75% this time last year,” says Julie Westwood, a mother of three from Frimley in Surrey. “However, that has been cut 1% since then and I must admit I feel that I’ve been conned. They’re glad to reel you in with tasty headline rates when the accounts are launched, but I’m far from impressed with their longer term behaviour. I wanted to make some interest to treat the kids at Christmas, but it hasn’t worked out like that.”

Financial expert Martin Cunningham shares Westwood’s reservations. “A lot of High Street accounts pay less than 1.2% after 20% savings tax, and at this rate the value of your money is being badly eroded by inflation, which is currently running at 2.4%.”

He continues: “To make any real gains you need to find an account that is paying at least this amount after tax, which is 3% before tax, to retain the spending power of your savings. The only answer is to shop around and avoid the real stinkers, of which there are plenty, believe me.”


Tag Box




Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
Savings disorder?

Brits putting money into savings accounts would benefit by paying off their debts first. Pauline McCallion looks into how to...