Unexpected interest rate reduction

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.

bowlhead99

HUMBUG wrote: »

Prudent ? £1billion . Lol .

When you are talking about the amount of money owned and used by people across the entire country, you do tend to get into the billions and trillions. Coventry has over £30 billion of mortgages and over £30bn of savers' deposits and competes with banks who have hundreds of billions on the balance sheets with several billion pounds of profit a year. One billion can still be a relatively modest amount of money in that context. They have a couple of billions in equity/reserves so that they can operate without significant risk of collapse.

Obviously if you compare it to the amount of money you have in your personal bank account, it seems like a large amount of money. That doesn't mean they are scoundrels for operating in a world where the grand totals have lots of zeros on the end of the numbers, and should give the money to you.

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).

The business model is basically how they exist.

So when you say "they should pay me more interest" a sensible response would be "why should they pay you more interest?". If your response to that is along the lines of "Who cares about their business model, they just need to give me more money", it shows naivety. They are not going to break the business model that services 1-2 million members just to give the savers higher interest, as then they would have to charge more money to the mortgage borrowers and the mortgage borrowers would be able to find relatively better deals elsewhere so they might walk away and then all of a sudden they don't want to pay you any interest because they don't need your cash - as they don't have anyone wanting to borrow any mortgage money.

Generally, the reason a building society is created in the first place is to provide home mortgages to members. A society for building. While there may be more saver-members than borrower-members at a point in time - because households on the whole have lower amounts of spare cash to deposit in savings accounts than they have mortgage balances - that doesn't mean they should pander to the savers at expense of the borrowers just because there are a greater quantity of savers. It is the existence of a lending business that allows the savings side to exist.

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

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.

You mentioned that savers had 'lost an absolute fortune' due to the decrease in interest rates.

My first observation was merely that if you have lost an absolute fortune, you are luckier than those who did not have a fortune to lose in the first place.

And my second was if you have lose a fortune because of having a high proportion of your wealth in cash, which has been eroded in value through inflation and lost its income-producing properties due to lower rates, then your choice to be the sort of person who has a fortune but puts all or most of it in cash, is a bit naive.

You are right that it 'depends on what you define as a fortune' but you are the one saying that savers (I presumed including yourself) have lost a fortune. If you didn't have a fortune, and you didn't put all or most of it in cash, you would not have lost a fortune, and then we don't need to be so dramatic.

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).

I'm neither, but I make myself aware of how the financial world works so that when I make comments on savings and investment forums they're not ill-informed comments.

You are the one coming on here with the sensationalist headlines of how banks and building societies are gorging themselves and how you are getting stung with double whammies and people are robbing you by stealth. Such inflammatory language might be seen in some quarters as trolling to provoke a reaction. Similarly saying that someone must be a banker or IFA or poster boy because you believe them to be trolling or fishing, is in itself a trolling / fishing comment. The person who calmly tries to give you some facts as a counterpoint, is not the troll.

Sorry if I've hurt your feelings you poor soul.

Yes, that looks like a comment learned at junior troll class in Trolling 101.

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' .

So what you are saying is that the stock market should be avoided as it's no better for your wealth than the bookies.

The difference is that with the bookies you have a negative expectation because the 'house' has an edge and graduallly eats away at your money. Whereas with investment funds buying and holding assets in the stock market, you gradually receive money as your assets are invested in the global economy which is productive and grows. So the value of an investment can be volatile but it's the opposite of going to the bookies. The markets are substantially up rather than down over the last hundred years, and will be over the next hundred too, unless the world as we know it collapses into an apocalypse. Meanwhile the stock markets, which go up in value over the long term, have also been paying dividends along the way.

On the one hand, you are saying that we should avoid the stock market because as the risk warnings tell us, we will lose our money. By implication we should avoid investing in funds/stocks/equities and keep our money in other things instead, like cash savings. When I say it's your own fault if you pile all your money into cash savings and you lose value due to inflation or declining interest rates because you are not diversified, you say I should not presume to judge you - your recommendations are to invest in employer AVCs, sharesave schemes and use as much of your annual pension allowance as possible to top up your pension.

But surely you understand that the way the AVCs, sharesave schemes and pensions make money which outpaces inflation over time, for them to be worth buying into, is by... investing in the stock market.

You know, that stock market that you told us not to invest into because in your 'humble opnion' you may as well go to the bookies?

So you will hide behind your use of the stock market as a diversified store of wealth and creator of growth if you call it an AVC or a pension or a sharesave - while telling everyone else that they should avoid the stock market and portray me as a charlatan for suggesting diversified investment, writing me off as an advertisement for investment funds and the financial services industry, and a troll. Ah well, it takes all sorts to make a world.

I'm sure by repeating it a zillions times some poor sucker will succumb to your 'expert' advice.

Your posts are often complaints or taking an opportunity to ridicule someone for being a suspected banker; meanwhile, over 70% of my posts on this board in the last decade or so have received a 'thanks' click, so I'm presuming that of those 5300 thanked posts there is at least someone out there who took my advice or guidance and saved themselves some money or improved their prospects.

In fact I know that to be the case based on direct messages received (assuming they are not all lies) - my PM inbox is generally pretty full. Hopefully those people are not all being led astray but I would generally encourage people to think for themselves rather than latch on to one troll or another on either side of an argument.