1 year fixed or longer if political parties change?

Krakkkers

Try getting 1 or 2 too good to go bags from local supermarkets and you will be amazed what you get, only £3 each and so much food that would have been wasted, freeze what I can and give what I can't use or freeze away on Olio.

subjecttocontract

Krakkkers said:

Try getting 1 or 2 too good to go bags from local supermarkets and you will be amazed what you get, only £3 each and so much food that would have been wasted, freeze what I can and give what I can't use or freeze away on Olio.

Anyone can do it.......but I guess some just can't be bothered.

mebu60

GoldenOldy said:

Hello there,

I more or less rely on savings interest to afford to live.
My current bunch of fixed term deposits are at an end, and i have found it uncomfortable the last few years .
i was thinking if buying a property to let, but have now ditched that idea after some consideration and wisdom from people on this site.
i have spoke to an ifa, well 2 actually, and they seem to be lurking around areas of investment with risk attached. 

This is just not me as I have anxiety problems already.
Therefore i wondered if any of you good people had any thoughts on whether it would be prudent to now set up deposits for 1 year, or maybe go longer say 2 or 3 years (even though the rates for all three are roughly the same)because the possible change in government may mean I struggle with the interest again.
Many Thanks

If you are not comfortable with investment risk then consider spreading your fixed term deposits over both 1 & 2 years and even a proportion into a 3 year. 

RG2015

Band7 said:

Krakkkers said:

Everyone can have a negative inflation rate if they choose.

If that was true, we would all have a negative inflation rate

And btw, your savings interest rates wouldn't have risen if we had negative inflation. Also, negative inflation - aka deflation - is highly undesirable, as any economist will tell you.

It is very refreshing to see someone adapting to these (temporary) high inflation times rather than complaining, striking and expecting someone else to solve their problems.

Thumbs_Up

Band7 said:

Krakkkers said:

Everyone can have a negative inflation rate if they choose.

If that was true, we would all have a negative inflation rate

Hey, i'm on a negative inflation rate, but if I tell all I may be labelled a parasite.

Adyinvestment

Band7 said:

Krakkkers said:

Inflation rates vary according to lifestyle.
My inflation rate is negative and has been for some time.

Do you live in the dark and cold, on a farm growing all your own food, without machinery that needs diesel or petrol, and with steam-powered internet access?

I would imagine there are plenty of people on this forum that are far better off with high inflation and the corresponding high interest rates.

10% inflation means next to nothing if your main income is interest/bonds and that has increased 400%.

RG2015

Adyinvestment said:

Band7 said:

Krakkkers said:

Inflation rates vary according to lifestyle.
My inflation rate is negative and has been for some time.

Do you live in the dark and cold, on a farm growing all your own food, without machinery that needs diesel or petrol, and with steam-powered internet access?

I would imagine there are plenty of people on this forum that are far better off with high inflation and the corresponding high interest rates.

10% inflation means next to nothing if your main income is interest/bonds and that has increased 400%.

Percentages are often misleading. If someone is gaining more in interest than they are losing in increased costs, they will surely be losing big on the value of their capital.

Albermarle

i have spoke to an ifa, well 2 actually, and they seem to be lurking around areas of investment with risk attached. 
This is just not me as I have anxiety problems already.

Are you not anxious that currently cash savings are losing around 6% per year in value ? Obviously do not know your circumstances, age etc but a mix of cash savings and investments is usually a better approach.

Therefore i wondered if any of you good people had any thoughts on whether it would be prudent to now set up deposits for 1 year, or maybe go longer say 2 or 3 years (even though the rates for all three are roughly the same)
Normally you get a better rate for tying your money up for longer. The fact that is not the current case is because the outlook is for interest rates to reduce from next year onwards ( exact timing unknown and not guaranteed) So if you went for one year, you might find that by the time it ends savings rates will have dropped and you  might wish you had fixed for longer. But nobody knows really.

TheBanker

GoldenOldy said:

Hello there,

I more or less rely on savings interest to afford to live.
My current bunch of fixed term deposits are at an end, and i have found it uncomfortable the last few years .
i was thinking if buying a property to let, but have now ditched that idea after some consideration and wisdom from people on this site.
i have spoke to an ifa, well 2 actually, and they seem to be lurking around areas of investment with risk attached. 

This is just not me as I have anxiety problems already.
Therefore i wondered if any of you good people had any thoughts on whether it would be prudent to now set up deposits for 1 year, or maybe go longer say 2 or 3 years (even though the rates for all three are roughly the same)because the possible change in government may mean I struggle with the interest again.
Many Thanks

The IFAs will point to investments as they're generally the best option. If you don't want to take their advice, that's your choice but it doesn't make it bad advice.

I don't think a potential Labour government will lead to a significant change in interest rates, personally, since the rates are set by the Independent Bank of England (thanks to a previous Labour government, but a decision subsequent governments have not reversed). They're used to control inflation, so the question is what will happen to inflation?

Given our current inflation woes are linked to global factors, I don't think a change in government will have much of an effect.

The general feeling seems to be that inflation is going to fall, therefore we will see an end to the current series of increasing interest rates. The Bank of England will want to reduce interest rates when they can (without impacting their inflation objective) given the harm these rates are causing to people with mortgages. 

So I think over the next few years, interest rates will drop, but not back to the low levels we've seen over the past decade. My decision would therefore be to take advantage of some of the longer fixes available. Depending on my position I might split my money between several fixes covering different periods. 

But obviously you need to do your own research. Nobody has a crystal ball - not even the Bank of England themselves. If the fixed rates available will generate enough income to fund your lifestyle, then is it better to lock in now and have that certainty? 

RG2015

Dazed_and_C0nfused said:

i have spoke to an ifa, well 2 actually, and they seem to be lurking around areas of investment with risk attached.

Yet you're happy to guarantee the actual loss from inflation 🤔

I am possibly being presumptuous, but the OP is @GoldenOldy hence is likely of advanced years.

I am similarly aged to merit such a description and the mindset may be quite different to those well away from retirement.

I suspect the OP is well aware of the loss to inflation. I can only speak for myself and I look towards mitigating the loss. I accept this loss as a cost of living and hope this will reduce significantly over the next few years.

Could my savings have made me more over the next ten years? Possibly, but could I lose more by diverting funds into investments? Again, possibly.

To remain with modest (losing) savings rates is a rational decision for some, even if it not maximising the opportunity.