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Savers ‘numbed’ by low interest rates

Savers ‘numbed’ by low interest rates

Category: Savings

Updated: 29/08/2012
First Published: 29/08/2012

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

New research by Moneyfacts.co.uk has revealed the dramatic difference in savings returns compared to five years ago.

Savers with a no notice account paying an average of 4.08% in August 2007 would have needed to invest £2,451 to achieve £100 in interest. The minimum deposit to achieve the same interest today is a massive £11,111. Shockingly, the average no notice rate has plummeted to just 0.90%.

Sylvia Waycot, finance expert for Moneyfacts said: "To get the same return on investments as five years ago, you need to find an additional whopping £8,660 to put into an instance access account.

"Looking purely at averages, today you couldn't even put your cash into a five-year bond and get the return of an instant access account five years ago, as they are currently averaging only 3.79%."

"The Bank of England is due to announce its base rate next week, and talk is once again suggesting a possible cut. If this should happen, where will it leave savings rates?

"Yet another fall in returns may not signal the end of the world for savers, but as the saying goes, 'you will certainly be able to see it!'."

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