Daily Express

Bank cut ‘ spells more devastatio­n for savers’

- By Vicky Shaw

SAVERS who have already seen their returns plummet now face more devastatio­n following the Bank of England’s interest rate cut, experts have warned.

It is thought that those who are on the brink of retirement may face particular challenges as the rate was reduced from 0.75 per cent to 0.25 per cent.

The decision was an emergency response by outgoing governor Mark Carney to counter a potentiall­y “large and sharp” economic shock from the Covid- 19 outbreak.

But some borrowers on variable rate mortgages should see some easing in their budgets as the size of their payments reduces.

The average easy access Isa on the market now pays 0.84 per cent based on someone having £ 10,000 to put away.

This is compared to 0.94 per cent at the start of 2019 and 1.77 per cent in March 2009.

Rachel Springall, a finance expert at financial website Moneyfacts. co. uk, said: “This will be devastatin­g news for savers who are already seeing returns plummet across the market.

“As we have seen in just the past 12 months, competitio­n is stagnating, and it has become the norm to see providers cut rates to adjust their market position rather than launch headline- grabbing deals. It almost seems inevitable at this stage that the base rate reduction could get passed on in full to savers over the next few months. However, this then should be a signal for savers to shop around for a new deal.

“As we have seen time and time again, the biggest high street banks are unlikely to be matching base rate – let alone beating it, so this cut is the perfect excuse to pay out less in interest to consumers.”

Steven Cameron, pensions director at Aegon, said at a time of volatility, the rate cut does “pose particular challenges for those approachin­g retirement”.

 ??  ?? EMERGENCY ACTION: Mark Carney tried to counter economic shock from virus
EMERGENCY ACTION: Mark Carney tried to counter economic shock from virus

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