Average savings rate over the last 25 years

cafcfan

:eek: Can anyone help- I need to work out the average compounded interest on savings over the past 25 years. I.E if I had put £500 in a building society savings account 25 years ago- what would it be worth now? It's just too mind boggling for me- I don't know how to start workng it out. Can any maths genius help- or failing that someone who has left a static sum in an account untouched for the past 2 years.

Blowsy

If you're trying to figure out what a CAFC season ticket will be worth 25 year from now, don't bother, I can tell you now it won't be a good investment


It's difficult to do really as interest rates have been anywhere 15% and 4% over this time period.

An estimate would be between 2-4% "real" return per year??
£500, on the above basis would therefore be worth £830 - £1330 ??

I'm sure someone here will be along to correct me if my figures are off.

dunstonh

25 years ago would have been before banks and building societies were able to compete with each other and you didnt have direct access.

My data goes back to 1986 so cant quite make 25 years. However, from 31/01/1986 to 31/10/2007 you would have grown 254.67% (Finex 90 day deposit ac). Turning £500 into £1273.

jamesd

That's about 6% a year.

barak

dunstonh wrote: »

My data goes back to 1986 so cant quite make 25 years. However, from 31/01/1986 to 31/10/2007 you would have grown 254.67% (Finex 90 day deposit ac). Turning £500 into £1273.

dunstonh - I know you weren't asked, but I am sure you also have the figures for equity investments over the same period - perhaps for UK 'all companies'.

dunstonh

barak wrote: »

dunstonh - I know you weren't asked, but I am sure you also have the figures for equity investments over the same period - perhaps for UK 'all companies'.

The sector coverage didn't start until 1989. So, I have done a selection that matched the required period.

Start date 28/02/1986 - 13/11/2007


Finex UK Property - 326.3% (property funds)
Finex money deposit 90 day - 250.9%
FTSE AS - 871.8%
FTSE 100 - 840.2%
Halifax property index - 414.8% (house prices)

The RPI data started to be recorded on the system from 31/12/1994.
The Finex money dep 90 day - 56.2%
RPI - 43.1%
Finex UK Property 232.6%
FTSE AS - 222.6%

From a year before the last property crash 31/10/1989
FTSE AS - 475.5%
Norwich Union unitised with profits fund - 167.8%
Finex UK Property - 138.2%
Finex money deposit 90 day - 137.7%
Halifax property index 186.8%

A bit of trivia I noticed from these figures.

Property funds suffered losses in 1991 but started to recover almost immediately. The Halifax price index had only shown a stability in the prices when the property funds took their big drop. House prices went on to fall for the next 4 years.

Property funds didn't suffer another drop until July 2007. The Halifax house price index stabilised that month but last month showed a drop.

Is history going to repeat itself????