Investment - Articles - How savings are affected by the BoE rate rise to 3 percent


Jenny Holt, Managing Director for Customer Savings and Investments at Standard Life, part of Phoenix Group, comments on the Monetary Policy Committee’s decision to raise interest rates

 Analysis highlights how savers can increase their cash by over £200 by opting for best-buy savings rates. Those able to put money away for longer should consider investing which provides the potential opportunity for real returns on their money over the longer term

 The Bank of England made the widely expected move of raising interest rates again, to 3%. While this is good news for savers, the increase in interest payments on cash savings is a long way off bridging the gap created by high rates of inflation.
 
 “Our analysis shows that even with an interest rate of 3%, higher than what is currently available on almost all easy access savings accounts, savings of £10,000 will be reduced to around £8,500 in real terms after two years if inflation remains at 10%. These figures highlight the importance of ensuring your savings are working as hard as possible for you. If your savings are earning just 1% interest then the real value after two years is around £8,260, a difference of £240.
 
 “For those able to take a longer-term view, putting cash into investments via an ISA or pension provides the potential for returns that can match - or even beat - inflation over the longer term as well as additional tax efficient benefits.”

 
  

Back to Index


Similar News to this Story

Targeted Support major step towards addressing support gap
Targeted Support is poised to play a pivotal role for potentially millions of non-advised individuals. Non-advised could be supported with at retireme
FCA proposals for millions to navigate their financial lives
Millions more people could get help navigating their financial lives with support on pensions and investments, under proposals announced today by the
Comments on FCA proposals on navigating financial lives
Aviva, Just Group, Standard Life, Scottish Widows and the ABI comment on FCA proposals on navigating financial lives

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.