Savers urged to make the most of interest rate rises
July 2, 2007
The recent interest rates have really taken their toll on borrowers, and those with variable rate mortgages as well as first time buyers have found themselves facing significantly increased repayments on their mortgages.
Interest rates week hiked up by the Bank of England by 0.25 percent in August 2006, and again by the same amount in November 2006. In January of this year a further 0.25 percent was applied to the base rate, and another in May of this year.
With the interest rate having risen by a full one percent in less than a year, many banks and lenders have been quick to apply these rises on borrowing – with some applying even more than the base rate rises.
However, with savings account many banks have been incredibly slow to pass on the interest rate rise, and in some cases have applied less than the Bank of England rises. As a result of this many customers are getting a raw deal on both their borrowing and their saving.
Experts are urging consumers to take the time to hunt around for a more lucrative deal when it comes to their savings accounts, as there are some savings accounts out there that offer highly competitive rates.
According to industry professionals some savers could be losing hundreds of pounds a year – sometimes more – in interest because of the poor interest rates that they are receiving.
Some consumers may find that online savings account will offer better rates of interest, but some may not be taking on any more customers.
However, savers should avoid being apathetic about their savings, and should try and make the most of the interest rate rises by ensuring that these rises are applied to their savings as well as to their borrowing.
Alan Wright
2nd July 2007
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