Data from June 2016 suggested that there were in the region of 600 accounts paying out at the inflation rate of 0.3% and under. However, since then inflation has continued to increase, rising first to 0.6% and then to 1%. Some figures from recent years suggested figures from the Bank of England showed over 2,000 accounts earning under this latest rate, of which nearly 700 are available for new customers. 0.3% and under is now the norm for most easy access accounts.
With such low interest rates more people will just end up keeping their money at home under their mattresses or in a safe. If you are starting to keep your worldly possessions in your home check there not visible to onlookers and maybe get a Locksmith Sheffield company like hallamlocksmiths.co.uk to come and change your locks and get you a spare key.
The Worst Offenders over the last few years
Some of the most notably low rates have included:
– One current account available appeared to be among the very worst, offering a 0% rate of interest to its customers.
– Another account we found was a savings account payed out a paltry 0.01%.
– An instant saver is also having its interest cut. Rates dropped from 0.25% to a mere 0.01%.
Meanwhile, debt continues to be a problem for many. Record numbers of IVA arrangements are being undertaken. IVAs, or Individual Voluntary Agreements are undertaken between creditors and individuals who have found themselves with unmanageable levels of debt. It is a legal arrangement which allows the debt to be restructured into more affordable repayments, and after five years the debt will either have been fully repaid or any remaining sum will be written off. IVAs are available for those in England, Northern Ireland and Wales, but people living in Scotland do not have access to the scheme. However, there are a number of different options available to them, including a Trust Deed.
A Bleak Future for Savers
Things are not likely to improve in the near future. Alongside a base rate of 0.25%, the Bank of England has predicted inflation to be around 0.8%..
The rates on the high street are likely to stick at around 0.74% and as a result savings will continue to be eroded. For example, customers with £1,000 in savings will stand to lose around £7 over the course of a year. The greater the savings, the greater the loss. While mortgage holders might be rejoicing at the low rates, this is not good news for savers.