The amount of savers’ money stagnating in 0% interest accounts rose by £10bn over the past year.
Our research shows the total amount of money earning absolutely no interest grew from £163bn in 2018 to a staggering £173bn in 2019. That’s a ninefold increase from £18.5bn in 2009 when the near-zero rates era began.
High street banks continue to let down long-term savers with low interest rates despite offering tempting teaser rates for new clients. As well as forgetting the loyalty of long term clients by not offering theme the same deals, these ‘teaser’ rates are often cut to near zero after a year.
A tough time for savers as the Bank of England held rates down
The Bank of England has continued to hold interest rates at 0.75% since August 2018. While the Bank of England’s monetary policy over the last ten years may have helped the economy, it has come at the expense of savers.
With no end to low rates in sight, people who don’t shop around for better options risklosing money in real terms. With inflation currently standing at 1.4%*, savers holding significant amounts of cash in low or no interest accounts are seeing the value of their assets eroded all the time.
Savers should consider a different way of growing their money
One way of doing this is with our Innovative Finance ISA, which offers a range of target rates depending on how much you invest, all of which are backed by UK property. Investing does however put your capital is at risk and IFISA’s have a different risk profile to traditional cash ISAs.
To help safeguard against not being covered by the Financial Services Compensation Scheme easyMoney employs a manual credit committee with stringent lending criteria that ensures all loans are secured by a legal charge over UK property at a maximum 75% loan-to-value to help protect your money.
You can read more about easyMoney and how we manage risk by reading our new help pages at easyMoney.com/help
*Consumer Prices Index, December 2019. Source: ONS