Bad news for savers

SheffD57

HI
We have a joint current account and a seperate one each in order to get an extra 4% interest with Lloyds.
We also have a very good with profits investment with the pru that was still paying 5% when the recession was at its worst and at best we have had 9% and we also have just had a payout from an investment with that Natwest but didn't perform very well it should have been 6% per yearsover 6 years and ended up being 5% total.
Now to the problem in hand. We have been told in confidence by a bank advisor that the government and the Bank of England are talking about reducing interest below 0% if the cut to 0.25% doesn't do the trick. This means that savers will have interest taken off them to keep money in the bank rather than the other way round. I want to know what effect this will have on investments and would it be better to invest our savings in further investments or use it to buy things like bullion.

Yours worried SheffD57

veryintrigued

SheffD57 wrote: »

... the government and the Bank of England are talking about reducing interest below 0% if the cut to 0.25% doesn't do the trick. This means that savers will have interest taken off them to keep money in the bank rather than the other way round.

It wont happen

SheffD57 wrote: »

We have been told in confidence

Sssshhhh:lipsrseal

Vortigern

SheffD57 wrote: »

We have been told in confidence by a bank advisor...

Your advisor is trying to scare you into moving your cash from savings to investments. I doubt that he has access to any confidential information about base rates

A bank is the last place you should go for advice. They don't do independent advice, they do try to push their own products.

Ballard

Despite what some people will tell you no one knows where or when the next rate change will be. It may go lower. It may go higher. My personal view is that it will drop to nominally above zero but just because I've said that doesn't make it any more likely.

teddysmum

This has been in the papers, on tv and online for quite a while.


No saver would pay to lend the banks their money, preferring to risk keeping the money at home (as has been suggested on here)or investing in premium bonds, where there is no chance of a burglar making off with the money.


The story about charging to deposit, refers to business accounts; not those of small savers or people having their salary/pension paid in.

veryintrigued

teddysmum wrote: »

This has been in the papers, on tv and online for quite a while.

Was it the same commentators that previously said that post brexit that the rates would be increasing about now?

AnotherJoe

SheffD57 wrote: »

Now to the problem in hand. We have been told in confidence by a bank advisor that the government and the Bank of England are talking about reducing interest below 0% if the cut to 0.25% doesn't do the trick.

:rotfl:

You think your bank advisor is best mates with Mark Carney perhaps ? Seems he'd have a more prestigious job in that case.

And, remind me never to tell you anything in confidence.

dunstonh

Now to the problem in hand. We have been told in confidence by a bank advisor that the government and the Bank of England are talking about reducing interest below 0% if the cut to 0.25% d

And your bank "adviser" is in contact with the BoE and the treasury?

Please, dont mistake bank sales reps for being something other than they are.

Aretnap

Public ally Mark Carney has stated that he doesn't foresee the base rate going negative. His private thoughts might be different - but if they were it seems unlikely that a bloke who works in your local bank would be in a position to know them.

Even if they base rate did go slightly negative there is no certainty that this would lead to ordinary savers being charged to make deposits - it hasn't in Switzerland, Sweden or Japan. And even if it did, paying a small amount to keep your money in a bank is a better option than keeping it in cash at home where it is at risk of fire, burglary etc (and don't expect your insurance to cover large amounts of cash - it won't).

If you are saving for the long term then certainly you should have a reasonable amount in bonds and equities rather than cash, depending on your own risk tolerance, but don't change your whole strategy based on what sounds little better than gossip.

jimjames

So you're already getting 4% on your savings with current accounts and you think that a cut in the base rate from 0.5% to 0.25% will now suddenly turn this 4% into a negative number?

Do you not think that these rates have no correlation to the BoE base rate? And even if they did the chances of a branch adviser knowing anything about BoE policy are neglible.

If you don't already have current accounts paying 5% then those are ones to look for. But don't expect your bank to tell you about them because they only sell their own products.

Glen_Clark

According to Osborne rates will rise https://www.theguardian.com/business/2016/apr/15/george-osborne-says-brexit-will-drive-up-interest-rates