Savings rates are lower than a year ago

RG2015

Flobberchops wrote: »

Yes, savings rates have again dipped across the board - seemingly "Brexit Uncertainty" is the new "dog ate my homework", as it's an excuse wheeled out by banks, businesses, and indeed governments to explain why they can't get stuff done.

If you want a better return on your money you may have to look outside of cash.

Lower your outgoings, make sure you're maximising any cashback, rewards, benefits or rebates you may be eligible for, and then consider accepting a degree of risk or volatility if you want your savings to beat inflation. (Do your research, capital is at risk, etc etc)

I think that many will be reluctant to embark on investing instead of saving at the moment.

I am averaging 2% at the moment which increases to 3.3% when I factor in free cash from 0% credit card stoozing, Modest when compared with possible investment returns but at zero risk (excluding inflation losses). I am happy with this and I have no desire to risk any more to generate a profit.

If the OP is facing a serious hit to their standard of living then they will need a full financial re-appraisal. In my opinion there are many ways to lower outgoings without compromising the benefits they offer.

RG2015

Uxb1 wrote: »

you should have been around in the 1970's - like what I was
Inflation peaked at 25% and the stock market dropped by just over 70%

Not to mention the Wall Street Crash of 1929.

Thrugelmir

Flobberchops wrote: »

Thinking of more conventional investments, there are plenty of funds and individual stocks that are outperforming inflation. Forum favourite VLS80 grew 7.38% over the last year. There are also several FTSE100 dividend stocks paying in excess of 5% income.

In the chase for yield and a positive return. You do wonder how many people are going to get their fingers burnt.

MaxiRobriguez

Thrugelmir wrote: »

In the chase for yield and a positive return. You do wonder how many people are going to get their fingers burnt.

If people were desperate for yield then the FTSE yields wouldn't be as high as they are. The dominance has been, and still is for now, momentum plays.

londoninvestor

RG2015 wrote: »

I would not disagree with you but surely it is not as simple as this. Ford Money offering a one year bond at 2% a year ago and 1.75% now is not solely down to their cash requirements.

Not solely. But the corresponding money-market rate (1-year GBP LIBOR) is about 0.95%. We should add a bit of a credit spread onto that to reflect Ford Money being a non-bank borrower, so a substantial chunk of rate comes from the Ford Money (or indeed any other savings provider near the top of the table) wanting to specifically attract retail deposits.

Reflecting though, I would have thought that effect was stronger for instant access. Compare an instant access deposit from a saver with overnight wholesale funding. In principle, both could be withdrawn tomorrow and not rolled over; but in practice, most savers won't be moving their money every day, while wholesale funding can easily vanish in a credit squeeze. So institutions think it's worth their while to pay savers well above money-market rates

I'm surprised in a way that the same applies for fixed-term deposits from savers, compared to fixed-term money market borrowings. Do savers have a strong tendency to roll over their deposits at maturity? Maybe! Or does the difference all come from Ford Money et al having lower credit ratings than banks and so needing to pay LIBOR+0.80% anyway for money market borrowing?

masonic

The best 1 year fix currently available is paying 2%.

RG2015

masonic wrote: »

The best 1 year fix currently available is paying 2%.

Who is currently offering 2% for a one year fix?

I do see Al Rayan with an expectation of 2.05% but that is not fully comparable.

The best guaranteed 1 year rate I can see is 1.87% from Zenith.

masonic

RG2015 wrote: »

Who is currently offering 2% for a one year fix?

BLME is offering 2%

I do see Al Rayan with an expectation of 2.05%

Al Rayan is offering 2.07%, I missed that one.

but that is not fully comparable.

Why not? Many providers have slightly different T&Cs.

The best guaranteed 1 year rate I can see is 1.87% from Zenith.

I don't disagree, but the OP hasn't mentioned anything about needing a cast iron guarantee that the fix would last for the whole year. If she is willing to accept a very slight risk that she would need to break the fix early and reinvest elsewhere, then she could earn a guaranteed 2.07% for the duration she held the account, which would very likely be one year.

Thrugelmir

MaxiRobriguez wrote: »

If people were desperate for yield then the FTSE yields wouldn't be as high as they are.

Institutional investors drive markets not retail investors.

Bacman

Uxb1 wrote: »

you should have been around in the 1970's - like what I was
Inflation peaked at 25%

RG2015 wrote: »

Not to mention the Wall Street Crash of 1929.

If Labour get back in, based on what they are intending to do, it is likely to happen again. The old newspaper headline of "Will the last person leaving please turn off the lights" could come back.