1 year fixed or longer if political parties change?

Albermarle

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.

Depends what you mean by advanced of course. 

You can pretty much see from many of the regulars on here, that many are close to retiring or already retired ( for some years in some cases) . Yet nearly all of us remain invested to a greater or lesser extent, with varying levels of cash .

Of course pursuing a cash only strategy is your choice, but I think the consensus is that it is not seen as the best way, unless maybe if you reach very advanced years.

TheBanker

RG2015 said:

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.   

No matter how you save, or invest, you'll always find with hindsight that another option could have produced a better result. Whether that's a different time entering a market/fixing a rate, the length of the fix or the mixture of assets. Hindsight is a wonderful, but useless thing. 

If the OP is happy with the rates currently on offer, and comfortable that they'll generate the income (s)he needs, then that's what matters. 

GoldenOldy

kinger101 said:

In what way would a change of government change things?

Are you worried whoever the next lot are might not do as stellar a job of managing our economy?

One of the Ifa’s mentioned that a change may have an impact negatively on interest rates. 

GoldenOldy

mebu60 said:

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. 

Great Idea! Thankyou very much.

GoldenOldy

Albermarle said:

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.

I am indeed greatly troubled by that. But due to my age and increasingly poor physical health (and not so great mental health to be honest), I have tried to keep things simple in case i need to access the cash reasonably sharpish if things go really bad for me.

TheBanker

GoldenOldy said:

kinger101 said:

In what way would a change of government change things?

Are you worried whoever the next lot are might not do as stellar a job of managing our economy?

One of the Ifa’s mentioned that a change may have an impact negatively on interest rates. 

If they do a better job of managing the economy than the current/previous government, then we should see interest rates reduce. But if inflation reduces at the same time that's not a bad thing.

Thinking of the bigger picture, the current interest rates are hurting a lot of people with mortgages, and will hurt even more as fixed rate deals end over the next few years. So I think any government will want to see interest rates fall and it won't make much difference what colour rosettes they wear. 

RG2015

Albermarle said:

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.

Depends what you mean by advanced of course. 

You can pretty much see from many of the regulars on here, that many are close to retiring or already retired ( for some years in some cases) . Yet nearly all of us remain invested to a greater or lesser extent, with varying levels of cash .

Of course pursuing a cash only strategy is your choice, but I think the consensus is that it is not seen as the best way, unless maybe if you reach very advanced years.

By way of honest feedback, I have to say that I find the tone of your comment rather condescending, although I am sure it is not intentional.

"Nearly all of us remain invested....."

"The consensus is that it is not seen as the best way....."

"Unless maybe if you reach very advanced years...."

"Of course pursuing a cash only strategy is your choice...." 

wmb194

GoldenOldy said:

kinger101 said:

In what way would a change of government change things?

Are you worried whoever the next lot are might not do as stellar a job of managing our economy?

One of the Ifa’s mentioned that a change may have an impact negatively on interest rates. 

Usually when investment types talk about negative impacts on interest rates that means they'll go higher, not lower, as higher rates are generally negative for companies and economies e.g., higher borrowing costs can impact profits and people's spending habits if they need to pay more for their mortgages.

People are divided at the moment about further rate rises, with some only seeing another 0.25% and others 0.5% this year before they'll begin to be reduced. Obviously it's just speculation but, as we're seeing in other countries, if inflation begins to calm down getting to a Bank Rate of 5% could be about right.

Krakkkers

4.5% is not high historically. People seem to believe the last 15 years or so is the norm.

Altior

The financial world has changed anyway, there's very little this country can do to control the central bank rate, whatever you see or read in the mainstream media. Whether it's nominally the BoE making the decisions, the treasury, or elected politicians. We are on a lead, or leash as they may call it, held by the Fed. The reason why the 'bank' was forced to abruptly raise rates was because the Fed policy was collapsing sterling, which has all kinds of negative impacts. The Fed are ahead of us (and the EU & other developed nations), our rates won't be reduced until the Fed determines it so.