Savings Rates Feel The 2009 Pinch

Savers have had a tough year in 2009, Moneyfacts.co.uk has revealed.

As savings account rates fell to record lows savers have faced a ‘dismal year’, Michelle Slade at Moneyfacts.co.uk claims.

“Those that rely on the income from their savings to supplement their income, such as pensioners, have been the hardest hit, with many having to make changes to their lifestyle as a result.

“Only savers prepared to lock money away in fixed rate products have really benefitted, where the demand for savers’ money has pushed rates ever higher throughout the year,” Ms Slade comments.

In fact, the average rate on a 5 year fixed rate bond has increased by 1.30 per cent since the start of 2009, compared to the average easy access savings rate, which has dropped by 0.68 per cent in the same period.

According to Ms Slade, “Savers’ best friend next year may well be inflation, which if it continues to increase, may cause the MPC to increase rates sooner rather than later.”

The Bank of England’s Monetary Policy Committee has now kept the base interest rate at 0.5 per cent for 10 consecutive months.

© Fair Investment Company Ltd