Unexpected interest rate reduction

ValiantSon

nbrewitt wrote: »

Very disappointed with the latest news from the Coventry, I've been singing their praises for years about them being a bit different and more customer focused and they go and pull a stunt like this when the general trend is for rates to be on the move upwards. Having said that, their rates are still competitive although it has dulled my opinion of them somewhat.

I've seen several comments now about the upwards trend in interest rates, but no evidence provided to support this view. By contrast, in the same week that Coventry reduced their rates, so too did the market leading easy access accounts from ICICI Bank (down from 1.35% to 1.3%) and Tesco (down from 1.3% to 1.26%). The evidence looks to me more like rates are not rising, but contracting. A positive change in the BoE base rate does not necessarily translate to a positive change in retail rates.

The one contrast to the above is with Nationwide's new ISAs, but these are still not that impressive when compared with non-ISA accounts.

I understand people's disappointment with the recent decision by Coventry BS, but feel that some of the comments on it are not entirely fair given the wider context of the market place, and the fact that many of their accounts are still fairly competitive.

Loanranger

I agree with ValientSon.
People are very quick to condemn but noticeably slow to praise. I shan't be leaving the Coventry any time soon. No sooner have you taken the trouble to move your cash elsewhere then elsewhere will be lowering their rates, too.
As for not trusting them... what a sad life it must be if a building society such as the Coventry are to be lumped in with the likes of the commercial players who are in to make a profit for their shareholders.

Fed

Same here which is a shame because Coventry have been great, despite having the account for years the rate on my online saver has always exceeded the best on offer elsewhere. Now it's similar, not worth the hassle moving though

Stubod

..I was all up for moving when I received the notification, however I can't find a better rate for instant access at the mo.... ....

Phil27356

Broadwood wrote: »

Mass ditch and switch from The Coventry to somewhere better ?

What date shall we do it ?

These are serious questions by the way.

Loanranger wrote: »

I agree with ValientSon.
People are very quick to condemn but noticeably slow to praise. I shan't be leaving the Coventry any time soon. No sooner have you taken the trouble to move your cash elsewhere then elsewhere will be lowering their rates, too.
As for not trusting them... what a sad life it must be if a building society such as the Coventry are to be lumped in with the likes of the commercial players who are in to make a profit for their shareholders.

I, as the OP in no way was either condemning nor lumping the Coventry in with any "commercial players". And, I don't think the word 'Trust' [or lack of it] ever came up in replies.
There have been several good factual replies in answer to my original post, which I appreciate. I also appreciate that there will be people out there who will perhaps be slightly more aggrieved with The Coventry's decision. I too have multiple accounts with The Coventry and have [as per
Loanranger;73978847] absolutely no intention of leaving them. That said, I am prepared to move some Coventry money around if I can eke out a little extra for little or no effort.

[Apologies is this reply is in wrong place/format]

Speculator

This account was paying 3% until just before the base rate rise when it was reduced to 2.75% for some reason.

Then after the base rate rose to 0.5%, the account went back up to 3%.

Now its back down to 2.80% probably in anticipation of another BOE rate rise.

HUMBUG

So this is the reason why Coventry BS has been able to reduce their savings rates. Banks and building societies 'gorged' themselves on BOE funds (TFS scheme) before it was closed at the end of 2017.

https://www.telegraph.co.uk/business/2018/03/01/lenders-gorge-cheap-bank-england-funds-cut-off-date/

"TSB, Yorkshire Building Society, Metro Bank and Coventry Building Society all drew down more than a billion pounds apiece in the period".

Obviously trying to get people roped into fixed rate mortgages at low rates before financial year end and then double-whammy them next year when interest rates go up. In the meantime, we savers suffer more manipulated low rates ( 10 years and counting - lost an absolute fortune- robbery by stealth by Govt and BOE & Co). Impact of inflation on savings has also taken a big toll.

ValiantSon

HUMBUG wrote: »

So this is the reason why Coventry BS has been able to reduce their savings rates. Banks and building societies 'gorged' themselves on BOE funds (TFS scheme) before it was closed at the end of 2017.

https://www.telegraph.co.uk/business/2018/03/01/lenders-gorge-cheap-bank-england-funds-cut-off-date/

"TSB, Yorkshire Building Society, Metro Bank and Coventry Building Society all drew down more than a billion pounds apiece in the period".

Obviously trying to get people roped into fixed rate mortgages at low rates before financial year end and then double-whammy them next year when interest rates go up. In the meantime, we savers suffer more manipulated low rates ( 10 years and counting - lost an absolute fortune- robbery by stealth by Govt and BOE & Co). Impact of inflation on savings has also taken a big toll.

You'd have a lot more reason to complain if the country had entered a period of deep and sustained recession because there was very little available credit.

If you want better returns in the long run then you should consider investments, rather than cash savings.

bowlhead99

HUMBUG wrote: »

So this is the reason why Coventry BS has been able to reduce their savings rates. Banks and building societies 'gorged' themselves on BOE funds (TFS scheme) before it was closed at the end of 2017.

However if you read the actual published facts and the less-sensationalist headlines, you can see that the financial institutions left money on the table and didn't choose to draw down as much cheap funding as the government was offering. They only borrowed what they thought was prudent given their business models.
Example:
http://www.cityam.com/281504/banks-leave-gbp13bn-cheap-money-term-funding-scheme-table

In the meantime, we savers suffer more manipulated low rates ( 10 years and counting - lost an absolute fortune- robbery by stealth by Govt and BOE & Co). Impact of inflation on savings has also taken a big toll.

Inflation has been relatively benign in the last decade compared to previous decades (perhaps your talk of manipulated low rates for over ten years really just means eight or nine years when the base rates hit the floor, as ten years ago they were fine).

Putting all your life savings in cash and then "losing an absolute fortune" to inflation probably implies you weren't as smart as you should have been and didn't hold any 'investments', only a big pile of cash. So, if you have lost such a fortune:

a) you should probably count yourself lucky that you had a fortune in ready cash. Most of us are not so fortunate as to have a fortune in cash;

b) maybe take some responsibility for your own situation yourself. Nobody owes you a living and if you had all your money in cash to watch it get eroded by inflation you should probably reflect on that and wonder why you didn't spread your assets across cash and diversified investment funds.

HUMBUG

bowlhead99 wrote: »

However if you read the actual published facts and the less-sensationalist headlines, you can see that the financial institutions left money on the table and didn't choose to draw down as much cheap funding as the government was offering. They only borrowed what they thought was prudent given their business models.
Example:
http://www.cityam.com/281504/banks-leave-gbp13bn-cheap-money-term-funding-scheme-table

Prudent ? £1billion . Lol . Who cares about their business models. They have manipulated rates at the expense of savers to subsidise borrowers (the majority of their customers are savers).


Inflation has been relatively benign in the last decade compared to previous decades (perhaps your talk of manipulated low rates for over ten years really just means eight or nine years when the base rates hit the floor, as ten years ago they were fine).

Inflation was higher than the manipulated lower saving rates , therefore we basically lost out.

Putting all your life savings in cash and then "losing an absolute fortune" to inflation probably implies you weren't as smart as you should have been and didn't hold any 'investments', only a big pile of cash. So, if you have lost such a fortune:

Who said I put my life savings in cash? Please defer from making wild assumptions about other posters.


a) you should probably count yourself lucky that you had a fortune in ready cash. Most of us are not so fortunate as to have a fortune in cash;

It all depends on what you define as a fortune? What do you define as a fortune? But it is quite easy to save if you work hard , don't waste it and pay off your debts (ie. mortgage ) early . Invest in AVC's if your employer offers them , take advantage of employee sharesave schemes. Use as much of your annual pension allowance to top up your pension. I'm sorry that you are not so fortunate to have a fortune in cash but hey! C'est la vie.

b) maybe take some responsibility for your own situation yourself. Nobody owes you a living and if you had all your money in cash to watch it get eroded by inflation you should probably reflect on that and wonder why you didn't spread your assets across cash and diversified investment funds.

You have a strange way with words. Its verges into a type of trolling and fishing style. I think you must be a banker or some independent financial advisor (or a poster boy for them). Sorry if I've hurt your feelings you poor soul. IMHO, if you want to invest in the stock market you may as well go to the local bookies. Haven't you read the small print "Remember funds can go down and you could lose your whole investment". Just keep plugging away advertising for the financial institutions and keep repeating the word 'diversification' . I'm sure by repeating it a zillions times some poor sucker will succumb to your 'expert' advice.