Anyone withdrawing savings due to 1% base rate?

tomstickland

jamtart6 wrote: »

ok we're not making money on savings, but if its just for a few months, what is the problem? (I would be grateful if this was answered seriously, as I don't know what the issue is?)

Losing out relative to inflation.
If it's only a few pounds per month for a few months then possibly not a massive problem.

save-a-lot

jamtart6 wrote: »

ok we're not making money on savings, but if its just for a few months, what is the problem? (I would be grateful if this was answered seriously, as I don't know what the issue is?)

Savings rates are so low that your money is actually being eroded in the bank as the value of your money is continually going down. The cost of living is increasing so you are seeing no gain. It has been answered seriously already in this thread

jamtart6

Boo, my post just got deletd! sorry save-a-lot the 'be serious' remark wasn't aimed at anyone on this thread. I don't have a good understanding of the economy etc. and didn't want any nasty comments because "I iz a bit fick"

Anway, would have been interested to see how this affected my ISA, as the interest was a nice little earner each month but we have just used majority of that for house deposit.

I understand how people with large savings may be affected, but I can't imagine most Joe Bloggs to have more than £100k stashed away (although I may be wrong!)

Do the base rate cuts mean we're nearing the point of collapse? Although we're not making anything on the savings, are they at risk? There has been a lot of talk about buying gold lately!

save-a-lot

I have not got a £100K, but I have a pretty decent pot of in ISAs and some fixed rate bonds and also shares.. and I would prefer to see my money working as hard as it can. Drawing down the mortgage, and mine is at 4.67% saves me the interest at that rate as I would be drawing down the capital of the loan

jamtart6

Good idea. I do see what you mean in that sense. thanks for clearing it up

save-a-lot

The only thing is to leave yourself with a savings pot for a rainy day, paying into your mortgage would leave you with less readily available cash, so I guess it is a matter of being sensible with your approach to this

jamtart6

All current savings (except for rainy/redundancy day pot!) will be going into house renovation at the moment, but if we're still in the same situation next year with base rates, savings will be going towards mortgage

ManAtHome

jamtart6 wrote: »

Do the base rate cuts mean we're nearing the point of collapse?

Well, we're certainly at the point of headless chickens...

Anyway, anyone with substantial savings probably had a good chance of decent 2 or 3 year fixed rates between summer 07/08.

gozomark

save-a-lot wrote: »

Savings rates are so low that your money is actually being eroded in the bank as the value of your money is continually going down. The cost of living is increasing so you are seeing no gain. It has been answered seriously already in this thread

except prices have been falling for the last 4 months....

unitedwestand

jamtart6 wrote: »

ok we're not making money on savings, but if its just for a few months, what is the problem? (I would be grateful if this was answered seriously, as I don't know what the issue is?)

The Daily Mail: “Financial experts said savers have become the 'sacrificial lambs' of the Bank of England's attempts to rescue the economy.”
http://www.dailymail.co.uk/news/article-1136362/Savers-ZERO-base-rate-slashed-new-record-low.html

Wales Online: “Rate cut 'an assault' on savers”
http://www.walesonline.co.uk/news/wales-news/2009/02/05/rate-cut-an-assault-on-savers-91466-22863659/

The Press Association: “Savers set to suffer further blow”
http://www.google.com/hostednews/ukpress/article/ALeqM5j10oNcqAeOMXeDl9RK8NuKu8OGyg

The Telegraph: ‘Don't cut interest rates’
http://www.telegraph.co.uk/finance/personalfinance/savings/4444586/Dont-cut-interest-rates-building-societies-tell-Bank-of-England.html

The Herald: 'Under the mattress’ mentality returns’
http://www.theherald.co.uk/news/other/display.var.2487311.0.Under_the_mattress_mentality_returns.php

The Herald: 'Savers have been thrown to the wind’
http://www.theherald.co.uk/news/other/display.var.2487312.0.Savers_have_been_thrown_to_the_wind.php

Daily Express: “savings drop by more than 80 per cent in the past two years”
http://www.express.co.uk/posts/view/83534/Despair-for-savers-as-interest-rate-is-cut-to-1-

Evening Standard: “Savers are inevitably angry and frustrated as they feel they are being penalised for prudence.”
http://www.thisismoney.co.uk/news/article.html?in_article_id=473210&in_page_id=2

Money Week: “Why the Bank of England's latest rate cut is a big mistake.”
http://www.moneyweek.com/news-and-charts/economics/why-cutting-interest-rates-now-would-be-a-mistake-14605.aspx

Times Online: “savers, who vastly outnumber homeowners, will suffer a further heavy blow to their fast-dwindling returns.”
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5672075.ece

Times Online “puts more pressure on the finances of savers, who have already been subjected to a vicious squeeze.”
http://business.timesonline.co.uk/tol/business/columnists/article5672080.ece

Reuters: “banks benefiting from the Bank of England's latest interest rate cut should think of ways to help savers”
http://www.forbes.com/feeds/afx/2009/02/05/afx6014041.html

EDP24: “Interest rate cut sparks savings outcry”
http://new.edp24.co.uk/content/news/story.aspx?brand=EDPOnline&category=News&tBrand=EDPOnline&tCategory=News&itemid=NOED05 Feb 2009 19:49:45:430