Britain’s beleaguered savers are holding out little hope of a happy New Year, having seen a “silent theft” on their cash pots caused by high living costs and low rates of interest on savings accounts.
The Bank of England’s historic low base rate of 0.5 per cent has meant that while those wanting to borrow cash have been able to take advantage of deals with low rates, many savers, particularly those approaching retirement, are feeling a distinctly bitter winter chill on their finances.
With forecasters predicting that interest rates are unlikely to rise any time soon and younger generations increasingly relying on their parents and grandparents, those who have spent years carefully putting money aside in savings have little comfort to fall back on.
Danny Cox, head of advice at Hargreaves Lansdown, said: “2012 is looking pretty bleak for savers – interest rates are unlikely to rise in 2012 and virtually no accounts offer inflation-beating interest rates.
“However, inflation should fall which will improve the value of savings accounts.”
Asda’s Income Tracker recently found that families were £13 a week worse off than they were a year ago. Spiralling utility bills were seen as one of the main factors putting pressure on families, as gas prices rose by 24.1 per cent over the year and electricity went up by 14.9 per cent, the report said.
Skipton Financial Services has also found that families with two or more children need to bring home almost £25,000 a year just to get by, wiping out the average gross full-time wage of £26,200.