£43 billion of our savings at risk
As beleaguered savers face tough times ahead, we look at new ways to get a decent return on your cash.
The Bank of England last week announced its decision to hold the Base Rate at 0.5% – continuing the interest rate freeze that began in March 2009.
Related links
Although this move had been widely anticipated, it will not have been welcomed by many savers, especially as high inflation is already eating away at our nest eggs.
According to calculations from campaign group Save Our Savers, Brits stand to lose £43 billion if inflation and interest rates remain unchanged for the next 12 months.
Simon Rose of Save Our Savers says: ‘If it was announced that £43 billion a year would be confiscated from those who are prudent and trying to save for their future to be given to the rash and imprudent who contributed to our current financial state, there would be uproar. But this is exactly what is happening’.
While the situation will probably remain bleak for the foreseeable future, could new products on the savings market help offset some of this difficulty?
Related links
Win up to £100,000 with Halifax
If you have savings of at least £5,000 with Halifax, you could enter a prize draw to win up to £100,000 each month.
The building society will give out three prizes of £100,000 each month. There will also be 100 prizes of £1,000 and 1,000 giveaways of £100 per month.
Although the draw is an attractive perk, it’s wise to pay close attention to the rate when choosing a savings account.
Halifax’s two-year fixed account is one of its more attractive options and pays 3.85% for a minimum deposit of £500.
It also offers a four-year product with a rate of 4.30% and a three-year fix paying 4.10%.
If you want to enter the draw, you’ll need to register online. You probably won’t win the £100,000, but someone has to.
Unless you know your rights, it’s easy to get ripped off or scammed by retailers and companies. Take our test to see how clued up you are about your consumer rights.
Santander’s savings twist
Santander has launched a three-year Upfront Interest Bond, which pays you interest at the time you invest your money.
In simple terms, this means you’ll receive the entire interest payment within a few weeks, rather than three years down the line.
This product pays a return of 3.36%, so you’ll receive £1,000 interest on every £12,000 you save. Once you’ve received the money, you can either spend or reinvest it.
Psychologically, it’s easy to see the appeal. Why wait three years for money you could have in just a few weeks?
However, this account may not appeal to everyone. In order to qualify, you’ll need to invest a minimum of £10,000 and hold a Santander current account.
As another downside, the return of 3.36% is not among the market-leaders for a three-year bond. With Yorkshire and Clydesdale Bank, you could earn 4.3% if you’re willing to wait three years.
Donate to charity with this market leader
Coventry Building Society has relaunched its easy access Poppy Online Saver, which pays a market-leading return of 3.15%.
The account allows four penalty-free withdrawals per year and the building society donates 0.05% of your account balance to the Royal British Legion. This product is only available to manage online and you can save between £1 and £250,000.
If this account doesn’t appeal to you, Nationwide’s MySave Online Plus pays a competitive 3.12% on deposits between £1,000 and £3 million. With this account, you can make one penalty-free withdrawal per year.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
Mortgages - YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE. FAILING TO ADHERE TO REPAYMENT TERMS MAY RESULT IN PENALTY CHARGES AND AFFECT YOUR CREDIT HISTORY. Rates may depend on your individual circumstances
Compare mortgages
Fill in our quick form to get a quote
Compare car insurance:
Fill in our quick form to get a quote
Compare life insurance:
Fill in our quick form to get a quote
