It’s an interesting point to raise, especially considering that many savings and current accounts remain fixed to the Bank of England base rate, with many current accounts providing 0% interest.

This means even traditionally strong savings accounts are now offering only marginal returns above the Bank of England rate.

This is not simply a problem domestically, but also impacts offshore finance and savings vehicles, due to offshore savings accounts being impacted by worldwide central bank cuts to interest rates. The result is that the returns remain much reduced and the tax advantages limited.

Because inflation remains a very real threat, both to existing rates, and the dangers of it escalating in future, the serious danger is that inflation is eroding savings for many people very fast.

This is all the more of a concern because people now appear to be forced into choosing fixed term bonds if they wish to save, because of the decent returns being offered by comparison.

The result really is the case of savers turning to investment vehicles, which these bonds are.

The danger is not to sit lightly with this option, as investing is a very different strategy and requires more vigilance.

So, in the meantime, if you do put your savings into fixed term bonds, do take care that you account for future raises in inflation, and don’t get caught out with your money losing value from this risk.

A large amount of places offering saving deals over the last few weeks have had a good deals to offer consumers, mainly due to the fact that the Bank of England slashed the based rate meaning banks could pass on their savings.

It is definitely worth shopping around for the deals on comparison sites and the high street.

Saving at fixed rate

Last week was mixed for those looking for a new savings deal. A large number of providers cut the rates on their fixed-rate deals following the half percentage point Bank Rate fall at the beginning of this month.

However, many providers reduced the rates on their fixed-rate bonds by less than the full cut, meaning that the average rate has fallen by just 0.27 percentage points to 2.81pc since this time last month. Despite a flurry of cuts and Bank Rate being at just 1pc, savers can still find fixed-rate investments paying just under 4pc.

The question is, is it really worth the effort to save anymore?

While I might be digging slightly to deep and detailed here, I’ll just carry on anyway. If you save £50,000 per year and travel to the bank say 10 times a year, you have probably spent the majority of your interest based earnings…is it worth it?

To bother, or not to bother?

IS STORING cash under the mattress really the way forward? Low interest rates have taken away one of the key incentives for savers, and combined with falling share prices and government bailouts in the financial sector it is easy to see why people may choose to stay away from the financial institutions they once trusted.

 

Although we are living in what could be referred to as ‘uncertain times’, it doesn’t have to be all bad. Savers can sleep easy now that sums up to £50,000 are guaranteed, and real returns are to be had, not least because of sliding inflation. In somADVERTISEMENTe cases they are better than ever.

Inflation has dropped recently, but that does not have a drastic affect for savers, due to the interest rates being at ones of history’s low points

Savers make no return

Savers will struggle to make a real return on their money despite last week’s fall in inflation.

Although the consumer price index (CPI), the government’s favoured inflation measure, fell from 3.1% in December to 3% in January, few savings accounts pay enough interest to enable a tax-paying saver to even match inflation at this level - a basic rate taxpayer would need to earn 3.75% and a higher rate one 5%.

What do you know about ISA’s?

Greater love hath no man for his wife than he gives her the benefit of his investment advice. If it goes wrong, he may be berated for it over the breakfast table for the rest of his life.

Nonetheless, Matthew Cox, 29, of Skipton Financial Services, has advised his wife Caroline to take out her first equity Isa, investing in Jupiter Merlin Worldwide Growth, because he believes it has good long-term prospects.

Savers are the biggest victim in the whole scheme of things, as either way, good or bad, they always receive the worst deals and the poorest care.

Savers suffer as usual

Hands up if you feel good about the future. Don’t all rush at once. What, no takers? Perhaps you’re experiencing the difficult birth pangs of a new global order, as Gordon Brown patronisingly called it. Maybe you’re wondering when your very own £500 billion bail-out will be arriving – that’s on condition you don’t do anything silly, like lend it out to kick-start the economy.

Or, more likely, you feel as though you are standing on the edge of an abyss, and waiting for your job, house, school fees and savings to be sucked into the black hole of the deepest recession in a century.

New Banking Act

The UK’s new Banking Act, which will allow authorities to intervene and rescue troubled financial institutions and safeguard investors, is now in force.

The act, which came into effect on Saturday 21 February, means the Tripartite authorities (the Bank of England, Financial Services Authority and Treasury) will provide greater protection for investors as they can receive compensation within seven days should a bank collapse.

Nowadays the younger generations are realizing more and more that they can’t simply rely on government support, or so called ‘safe pensions’ for the future.

By becoming independent and saving for the future, younger savers in the long term, will be putting the UK economy in a stronger position.

Savers get younger

Brits aged 18-34-years-old are saving a great deal more than the country’s over-55s, it has been found by high street bank Abbey.

The bank published figures on Friday (February 20th) showing that adults under the age of 34-years-old managed to cut up to £3,599 from their annual outgoings as a result of the credit crunch, while baby boomers cut their spending by just £2,773.

Every time savings pops up in the headlines, we automatically assume that it is something to do with banks and how they are changing savings accounts for the worse.

Actually this time, this article is showing people that chopping back is not as hard as it needs to be, simply chopping a few items from your shopping could save your household huge amounts every year.

Save on food bills

Families and individuals in the UK are reducing the amount they spend on food in an attempt to cut their overall outgoings because of the recession, according to new research.

As the downturn makes people more cautious with money, Abbey Savings found that “the vast majority” of people in the UK are cutting back on their expenditure. Of these, 69 per cent say they have cut spending on food.

Safe saving is good

British consumers are choosing to put their money into savings accounts rather than spending it, new research has shown.

Findings from a study by the bank Abbey revealed that consumers of all ages and in all regions are saving their money as the UK’s recession becomes deeper.