Cash Accounts
Bank of England move was a step too far
Jennifer Lowe, 14 January 2009
The latest decision by the Bank of England to cut interest rates has proved to be extremely unpopular with the electorate.
According to moneysupermarket.com's latest survey, more than two-thirds of people were angered by last Thursday's 0.5 per cent rate cut.
Kevin Mountford, head of banking at moneysupermarket.com, says, ‘The tide is definitely turning, and the collective voice of the nation's army of savers is getting louder. Clearly, not much thought is being given to savers, whose returns are dwindling by the day.
‘The bulk of people have been angered by Thursday's slap in the face from the Bank of England for what has been, in some cases, a lifetime of diligent saving. Many of these people need the income from their savings to get by, and their desperation is getting to the point where they are questioning just what Gordon Brown and his chancellor are doing.’
Mountford is urging savers to shop around for the best deal. He adds, ‘Gone are the days where accounts paying six or seven per cent were plentiful. With the average rate at just 1.43 per cent, vigilance is key and variable rates can drop like a stone.
‘There are still some good deals to be had, though, especially if you're prepared to lock your money away and fix the rate. Anglo Irish and ICICI are offering 4.6 per cent or more on fixed-rate bonds, and Nationwide has a fixed cash ISA at four per cent.’
He also suggests that for those who usually have spare cash at the end of the month, a regular saver account can be a great idea. Barclays and Norwich & Peterborough are both offering six per cent on user-friendly accounts.
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