Interest rate rises. Will savers start making money?

[Fordian]

A genuine question. In 1989 the BoE interest rate was around 15% which was obviously disastrous for many; but I recall my parents happily living off the interest on dad's redundancy payout.

Interest rates are rising again; will savers get more than 0.1% on their savings, do you think?

Hope so, but I'm not seeing rates rising anywhere with the same speed that inflation is......

Of course. I used to get 5% interest from my Santander 123 account then it dropped in stages down to 1%. Recently there has been a rise to that and an increase on the % we get back on fuel direct debits.

I live in hope!
I am of the generation who was shafted on high interest rates when young and borrowing but have had nothing in return since getting older and saving a little...

Well they've increased the interest on my mortgage twice this year, but no need yet about increasing my savings roi!

Need, not need

Of ffs news not need

My savings rate has crept up but its tiny additions not the sort of rise we are seeing with the base rate.

If you're getting 0.1% on your savings, you need to move your money pronto.

There's accounts that pay loads more than that. Savings rates have definitely risen over the past few months too. When base rates were 0.1%, the best savings accounts were around 0.6%, but now it's more like <consults Money Supermarket> nearly 2% or slightly more if you fix for a year or two.

If your interest rates are still appallingly low, look at the smaller regional building societies, eg Coventry, Leeds, Kent Reliance. Some of their rates are already over 2%. Coventry announced their latest increases yesterday afternoon, effective 7 October.

It’s sad really. House prices have been propped up and people have little choices (it’s expensive to move and such a huge disruption so not easily done).

The gap between salaries and house prices is absolutely epic now, and mortgages will get mor expensive.

But hey, great for savers!

The whole system sucks.

No savers are actually loosing money at the moment.

inflation in September is almost 10% against the now increased base rate of 2.25%.

say you can get a fixed rate of 4% on £100 at the end of the year all things being equal (and ignoring compounding) you’d have lost £10 in real value thanks to inflation and gained £4 in interest. So your £100 is now worth £94.

I got an email yesterday that my Marcus account savings rate is going up to 1.55% AER from 1.25

This is the issue isn’t it. The Marcus account has been one of the most generally competitive and as interest rates go up 50 bps they put their rates of 30 bps. Not much profit in that then

They will probably creep up by about 0.1%, no fear of going anywhere near the £1k tax free interest amount anytime soon

My online savings account increased to 1.85% last week before the base rate increase. It pays 2.25% If I put it in a 3 month access account. I am waiting to see if it will increase following the BoE rate increase.

If you are getting 0.1% it's time to move you money!

Nationwide are working through what it means for their members, probably not very much, my triple access account went from 1.4% to 1.5% to 1.75% this year, maybe it will reach the dizzy heights of 2% by the end of the year

No savers are actually loosing money at the moment.

Exactly

But if you're talking about money that is to be used to pay off your mortgage (or saved with the intention of paying towards the mortgage, you're not losing money because it holds it's value against the amount of your mortgage.

£100 is still worth £100 in a year's time (accounting for interest and payments made separately) because your mortgage balance has not increased by the rate of inflation.

Believeitornot it's not great for savers - if inflation is at 10% even if interest on savings is 5% (which it isn't even if you shop around) savers are losing money.

Most people have to save for a deposit if they want to buy for the first time, and plenty of people can't afford to buy property get a mortgage but can afford to save for an emergency/ the future - those people are shafted.

Don't worry, property owners will always come out on top long term unless they actually cannot pay their mortgage and the property is repossessed. Traditional savers who put away a bit of money each month for "a rainy day" will never come out better than those who invest in property, and that isn't a good or equitable thing at all!

BarbaraofSeville people who have savings but don't have a mortgage are losing money in real terms.

If you lock in your savings for over a year you can get at least 3%.

I got the same E mail.With the bonus interest added, the interest on my account will now be 1.80%.

My fixed rate ISA matures on Tuesday and fortunately as I hadn't bothered to do anything with it, the interest rate had gone up by 0.5% to 3.25% fixed for a year since I had my letter a couple of weeks ago, the two year one was higher but I am hoping interest rates might go up higher anyway in the next year, probably best not to fix for too long at the moment

I open 2 year savings bonds with Tesco bank every couple of months. I now get over 3% so beginning to see definite improvement in the money I am getting. I have £30,000 in one account, it’s paying £50 per month, last year it was paying £12.50.

That's worth knowing thanks @Mindymomo