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Gloomy outlook for household finances

Gloomy outlook for household finances

Category: Money

Updated: 23/08/2010
First Published: 23/08/2010

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 It is now over 6 months old so the content may be out of date.

Whilst the economy may be slowly improving, household finance seems rooted in negative territory.

The Markit-YouGov Household Finance Index posted 37.9 in August, which, when below the no-change level of 50.0, signals deterioration in outlook.

The negative result was mostly a reflection of people's increased worry over job security, lower pay and the higher cost of living.

Nearly a third (30%) of the 2,000 UK households polled reported worsening finances during August, compared to the mere 6% that reported improvements.

Government cutbacks, likely tax rises and higher inflation meant that nearly half of households expect their finances to worsen in the year ahead, compared to the 25% that anticipate improvements.

"The latest results from the HFI demonstrate that, broadly, the public do not base their personal financial outlook on one quarter of strong GDP growth," commented
Todd Davis, financial services consulting director at YouGov.

"People continue to base their expectations on more immediate and personal experience and many are still facing employment uncertainty and constrained personal finances."

During these tough times it's important to make the very most of your money and find a decent interest rate for your savings.

We're here to help take the pain out of finding the best savings rates around.

For the best returns, a market leading rate of 4.75% is available from ICICI Bank on balances of £1,000 or more, although savers must put their money away for five years.

Barnsley Building Society is offering a rate of 4.25% if you're happy to leave your money invested until 30 September 2014.

If you want to be able to access your money a little quicker, Coventry Building Society pays a rate of 3.70% on its two year fixed rate bond, while Santander has a one year deal paying 2.80%.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.