Low interest rates 'require action from savers'

By Sarah Engle, Tue 3 Aug 2010 - Published in Banking

Savers have to prepare for the fact that interest rates look set to remain low for some time to come, it has been suggested.

George Ladds, head of investment and pension research at Fair Investment Company, pointed out that many experts believe the Bank of England will hold its base rate at 0.5 per cent until 2014, which could create problems for those coming to the end of fixed-rate deals.

"If you are worried about your money losing its value, the first thing to do is to make sure you use your tax-efficient ISA allowance," he commented.

Mr Ladds explained that these products are useful, as the current five per cent cost of living means that basic-rate taxpayers will need to receive interest of 6.25 per cent to see a return.

The expert also claimed that people who have already made use of their ISA allowance can try to find another fixed-rate deal which offers them the best returns while the base rate remains at its historic low.

Last month, Moneyfacts spokesperson Michelle Slade suggested that finding a competitive deal is currently difficult in the savings market.

News Categories

News Archive

News: Low interest rates 'require action from savers'