Savers in better position |
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| Economy | |
| Written by Paul Williams | |
| Tuesday, 19 May 2009 | |
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Despite low interest rates the fall in the real cost of living means savings are net gainers.
Savings rates look to have ended their freefall, with the average no notice rate hovering around 0.65%, marginally above bank base rate. Darren Cook, Analyst at Moneyfacts.co.uk, commented: “Unfortunately low interest rates are geared to encourage savers to plough their savings back into the economy, but this serves little or no benefit to those who rely on interest from their hard earned wealth to subsidise their pension. “Using both inflationary indices, the real return on savings interest is showing a pleasing upward trend for RPI, up 0.67 per cent on last month. “Due to the make up of RPI, the only beneficiaries of this positive real return are those that have recently benefited from cheap monthly mortgage repayments. “Mortgage-free pensioners who are relying on savings interest to subsidise their income are seeing their expenses rise by CPI at 2.30 per cent and their savings fall by 1.77 per cent in real terms”.
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