Angry savers protested yesterday outside the Bank of England to highlight the effects of low interest rates on their savings.
A combination of high inflation and historically low interest rates means savers are left struggling to find a real, above inflation, return. In fact there are no accounts which currently offer an after tax return to beat RPI (Retail Prices Index).
Save our Savers
Members of the campaign group, Save Our Savers protested about continuing low interest rates at the same time the latest decision was taken. They were accompanied by “Bertie the pig” a papier mache piggy bank which they destroyed with a hammer to symbolise the effect that low interest rates and inflation are having on savers.
Save Our Savers campaigner Simon Rose said: “All savers are seeing their capital whittled away as inflation outstrips negligible interest rates. For the millions of pensioners who depend upon their savings, the future is terrifying.”
Bank of England decision
The Bank of England yesterday decided to leave interest rates on hold but did announce a further £75 billion of Quantitative Easing measures. Savers are worried that the latest announcements signal that an interest rate rise is even further away and that the additional money injected into the economy via QE could cause inflation to rise still further.
Experts such as Ros Altman from Saga suggested that more “out of the box thinking” was needed to help savers, suggesting that one option could be to extend the ISA (Individual Savings Accoutn) allowance to help more people shelter their savings from tax and therefore increase the return.
Dr Altman went on to say: “It sends all the wrong messages for the future.” Concluding: “If you save you’re a mug.”