Best of the Week
Most Popular
1. Next Financial Crisis Is Already Here! John Lewis 99% Profits CRASH - Retail Sector Collapse - Nadeem_Walayat
2.Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - James Burgess
3.Gold Price Trend Analysis - - Nadeem_Walayatt
4.The Beginning of the End of the Dollar - Richard_Mills
5.Stock Market Trend Forecast Update - - Nadeem_Walayat
6.Hindenburg Omen & Consumer Confidence: More Signs of Stock Market Trouble in 2019 - Troy_Bombardia
7.Precious Metals Sector: It’s 2013 All Over Again - P_Radomski_CFA
8.Central Banks Have Gone Rogue, Putting Us All at Risk - Ellen_Brown
9.Gold Stocks Forced Capitulation - Zeal_LLC
10.The Post Bubble Market Contraction Thesis Receives Validation - Plunger
Last 7 days
SPX/Gold, 30yr Yields & Yield Curve – Amigos 1, 2 & 3 Updated - 21st Oct 18
Gold Stocks Sentiment Shifting - 21st Oct 18
Why Is the Weakness In GBP/USD Likely? - 21st Oct 18
Stock Market Bubbles, Balloons, Needles and Pins - 21st Oct 18
The Incredibly Bullish Set-Up for Gold - 20th Oct 18
Here Comes the Stock Market Retest - 20th Oct 18
Waterproof Camera - Olympus Tough TG-5 Setup and First Use - 20th Oct 18
Israel’s 50-Year Time Bomb, Pushing Palestinians to the Edge - 19th Oct 18
Bitcoin Trend Analysis 2018 - 19th Oct 18
History's Worst Stock Market Crash and the Greatest Investing Lesson! - 19th Oct 18
More Signs of a Stocks Bull Market Top and Start of a Bear Market in 2019 - 19th Oct 18
Stock Market Detailed Map Of Expected Price Movement Before The Breakout - 18th Oct 18
Determining the Outlook for Gold Mining Stock - 18th Oct 18
Investor Alert: Is the Trump Agenda in Peril? - 18th Oct 18
Stock Market is Making a Sharp Rally After a Sharp Drop. What’s Next? - 18th Oct 18
Global Warming (Assuming You Believe In It) Does Not Affect Gold - 18th Oct 18
Best Waterproof Compact Camera Olympus Tough TG-5 Review - Unboxing - 18th Oct 18
Silver's Time Is Coming - 17th Oct 18
Stock Market Volatility Breeds Contempt - 17th Oct 18
Gold 7-Year Bear Market Phase Is Over - 17th Oct 18
Gold - A Golden Escape - 17th Oct 18
Tec Stocks Sector Set For A Rebound? - 16th Oct 18
Real Estate Transactions are Becoming Seamless with Blockchain-Powered Data Sets - 16th Oct 18
Important Elements of a Viral Landing Page - 16th Oct 18
Stephen Leeb Predicts 3-Digit Silver and 5 Digit Gold?! - 16th Oct 18
BREXIT, Italy’s Deficit, The EU Summit And Fomcs Minutes In Focus - 16th Oct 18
Is this the Start of a Bear Market for Stocks? - 16th Oct 18
Chinese Economic Prospects Amid US Trade Wars - 16th Oct 18
2019’s Hottest Commodity Is About To Explode - 15th Oct 18
Keep A Proper Perspective About Stock Market Recent Move - 15th Oct 18
Is the Stocks Bull Dead? - 15th Oct 18
Stock Market Bottoms are a Process - 15th Oct 18

Market Oracle FREE Newsletter

Trading Any Market

2017 Was a Roller Coaster Year For UK Savers

Personal_Finance / Savings Accounts Dec 12, 2017 - 12:33 PM GMT

By: MoneyFacts

Personal_Finance

As we come close to the end of 2017, the latest research from moneyfacts.co.uk shows it has been a roller coaster year for savers. Savings rates fell to record lows for various fixed bonds in January and for variable rates in February, but thankfully as the end of the year draws near, rates in both areas have improvement immensely.

Fixed rates have risen considerably this year, with the average five-year bond hitting 2.03%, its highest level since July 2016 when it was 2.05%. The short-term bonds have also recovered to the extent that today, the average one-year bond stands at 1.17%, its highest point since July 2016 when it was 1.20%.


Variable rates have recovered at a much slower pace. Despite some positive movements at the start of this month, fuelled by the base rate rise in November, the average easy access rate is still below what it was before the Bank of England cut the base rate in August 2016. The average easy access rate in August 2016 was 0.55%, but today it’s 0.47%, which isn’t very reassuring news.

The average return on ISAs (fixed and variable) is also falling short, standing at 1.07% today, down from 1.13% in August 2016.

Nevertheless, for the 11th consecutive month, savings rate rises outweighed cuts, with moneyfacts.co.uk recording 58 individual rate cuts compared to 157 rate rises (including ISAs) in November. However, statistics released today show that the Consumer Price Index has risen to 3.1%. Therefore, savers’ cash is still being eaten away by inflation, as there is not one single standard savings account* that can beat or match 3.1%.

Rachel Springall, Finance Expert at moneyfacts.co.uk, said:

“At the start of this year, savers had to endure the worst ever recorded cash rates since records began. So, despite many savers choosing to start up a savings nest egg as a New Year’s resolution, the average returns would have been just awful compared to years gone by.

“There was a huge expectation that variable rates for savers would rubber-band back to what they were before the Bank of England cut the base rate in August 2016, but sadly this doesn’t appear to be the case. Whilst it is true the market has improved in 2017, most of the effort has come from challenger banks, whereas the big high street banks seem to have been very selective on what accounts will benefit from a rise – if any. This is a bit of a backhanded approach as many of the well-known brands were quick to cut rates in 2016.

“It’s disappointing to see ISAs as an area of neglect, particularly as these vehicles used to be seen as a first port of call for savers. Today couldn’t be more different, as the introduction of Government tax-saving initiatives for consumers, specifically the Personal Savings Allowance (PSA), have greatly damaged the returns and enticement of ISAs. Many of the key players in the standard savings market do not offer an ISA equivalent product so the market has not had the luxury of getting a significant boost in returns over the last year.

“Inflation is still taking its toll, as savers’ cash continues to be eroded by its effects, due to interest rates falling short. Even if a saver were to invest in the best five-year fixed bond today, paying 2.51% from Secure Trust Bank, £59 would still be lost in just one year on a £10,000 investment, as the interest fails to beat inflation, assuming the Consumer Price Index sticks at 3.1%.

“Clearly it’s encouraging to see the savings market move in an upward trajectory as we head towards the New Year, but there is still so much more room for improvement. It remains to be the case that challenger banks are working the hardest to entice savers, with high street banks falling by the wayside. With this in mind, savers would be wise to consider more unfamiliar brands to boost their interest if they are looking for a brand new savings account for a brand new year.”

*Data Note: Please note that these savings product numbers only include deals that are available to all UK residents (this figure does not count each interest payment option for each account). Moneyfacts has chosen not to include products that have limited access, such as locals-only, high net-worth clients or linked products which mean you must have an existing account to obtain headline rates. Moneyfacts has taken the view that as these accounts are not available to your entire readership, their inclusion may be misleading to your readers by directing them to accounts they may not be entitled to. We do, of course, hold all this data should you require it. Our daily Moneyfacts savings rate monitoring started in July 2015 and is a record of live standard savings account changes, which include fixed rate bonds of all terms, all ISAs, notice accounts and no notice accounts.

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.


© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules