The campaign group Save our Savers has claimed that UK savings have been eroded by £50 billion over the past year through a combination of low interest rates and rising inflation.
The Bank of England’s Monetary Policy Committee (MPC) yesterday held interest rates at 0.5%, the 28th consecutive month that interest rates have remained unchanged. In an effort to sway the MPC’s decision Save our Savers wrote to each member of the committee urging them to vote for a rate rise.
Save our Savers is campaigning for a rise in interest rates and it has warned that those on fixed incomes, many of who are pensioners, are badly affected by a combination of low interest rates and high inflation.
In their letter to the MPC the group said that “a country without savings is a country without a future”. The letter went on to say, “for many this is not a temporary setback. Its effect will permanently reduce the value of their future income.”
Some people have benefited from the low interest rate environment of the past two years or so.
Homeowners with variable rate or tracker mortgages have seen their mortgage payments fall and remain low.
The financial information service, Moneyfacts, reported last week that interest rates for new mortgage deals had fallen to their lowest level for 23 years.
Many business leaders are also calling for interest rates to remain low fearing that a rise in rates would damage the already fragile recovery.