Virgin reduces rate on esaver account!

talexuser

nilrem wrote: »

Only real option is fixed rate but even these accounts are paying little unless one ties up for 5 years and above!

I wouldn't dream of tying up savings for 5 years, but if you had done that 5 years ago just before base rate became 0.5% you would be quids in now. I did actually take out a 3 year 3% fix a year ago and of course now wish I had put much more in!

I don't think anyone in 2009 predicted rates would stay this low for this long but I think we have a l-o-n-g way to go before they change substantially. Maybe depends on whether the QE "wet finger in the air" experiment unwinds without unintended consequences?

nilrem_2

GreenBitterfly wrote: »

The interest rate has been reduced on the easy access ISAs too, well created a new issue with a lower interest rate. It wouldn't surprise me if they reduced the interest rates on old issues of ISAs, already had mine reduced from 2.80% to 2%.

That is why I now only do fixed rate ISA's I know they are not from everyone but at least they won't cut the rate just after you invest!

Bantex_2

Thrugelmir wrote: »

The UK's debt pile is so large. That repayment is unlikely. So inflating away the debt is seen as the most appropriate course of action.

Borrowers may well yet get bitten far more badly.

In what way are borrowers likely to get bitten?

lisyloo

If interest rates go up then those who have big mortgages and are not fixed could be in for a shock.
I think base rates will stay low until the economy is able to deal with it.

Why would be BOE put up rates if they knew it would cripple the economy?

Of course a few may suffer, but if a big % of the population would suffer then the BOE will surely try to avoid it.

bigadaj

lisyloo wrote: »

If interest rates go up then those who have big mortgages and are not fixed could be in for a shock.
I think base rates will stay low until the economy is able to deal with it.

Why would be BOE put up rates if they knew it would cripple the economy?

Of course a few may suffer, but if a big % of the population would suffer then the BOE will surely try to avoid it.

Maybe, and I don't necessarily think you're wrong but it's a depressing outlook.

Continually encouraging people to take out bigger mortgages on the implicit guarantee of low interest rates and so keeping house prices high or even higher.

With a rapidly ageing population there's a strong argument to say that far larger numbers have been hurt by low interest rates rather than higher ones, also the fact that there are several savers for every lender.

Pensioners have been bribed to accept low savings rates by benefits and allowances but the real reason for the low interest rates is a combination of repairing the battered balance sheets of teh banks, as their spread has increased, and also to try and inflate away debt in general but more specifically government debt.

talexuser

Bantex wrote: »

In what way are borrowers likely to get bitten?

If they take on a lifestyle based on these borrowing rates.

Some of us can remember when a run on the pound required 15% base rate, and a couple of years at 10 -14% at the same time as house prices falling.

grimsalve

Sigh, looks like I'm going to have to move my money out of Virgin then. Not happy.

ColdIron

grimsalve wrote: »

Sigh, looks like I'm going to have to move my money out of Virgin then. Not happy.

The question is of course, to where? Virgin's e-Saver is a non-bonus account which is good, most of the rest are 1.4% or less. KRBS sound difficult. Britannia or AA (bonus) at 1.5% is only an extra £16 on £20,000 after tax

Sad to say but at 1.41% for a non-bonus account Virgin are still comparatively competitive and have chosen their price point well

And yes, I have filled up most of the the usual current account suspects

nilrem_2

ColdIron wrote: »

The question is of course, to where? Virgin's e-Saver is a non-bonus account which is good, most of the rest are 1.4% or less. KRBS sound difficult. Britannia or AA (bonus) at 1.5% is only an extra £16 on £20,000 after tax

Sad to say but at 1.41% for a non-bonus account Virgin are still comparatively competitive and have chosen their price point well

I was about to ask that question of "where to"?
I have to agree with you there is little choice at the moment.:)

grimsalve

I suppose bonds are the only option at the moment (for me anyway) - I did wonder about p2p but I don't like the risk and hassle.