🔔 Press Review: Savings Roundup (week commencing 2 June 2018)

Another week, another prediction of when a base rate rise might happen.

This week it’s good news for savers as, according to several articles, at the Barclays Inflation Conference held on 7 June 2018, one of the most cautious members of the MPC, Sir Dave Ramsden, has hinted that a pick up in the growth of the economy and a rise in wage growth means that a Bank of England rate rise is needed to push inflation down to the 2% target.

Sir Dave was one of only two members of the MPC to vote NO in November last year, but as they were in the minority, the base rate hike from 0.25% to 0.50% went ahead anyway. So, this turnaround from him could be significant.

As a result, the speculation this week is whether the anticipated base rate rise will be earlier than last week’s prediction of November 2018. Well, as I’ve said before, I’m afraid we just have to wait and see – these predictions are, at best, very fluid.

MoneyMail this week warned of the perils of not responding to fixed rate bond maturity letters. The article reminds savers that if they don’t give their provider instructions as to what to do with the maturity proceeds, you could end up either in an easy access account paying a paltry rate or, even worse, locked up for another term with the prevailing rate – which could be uncompetitive. Only a limited number of fixed rate bonds allow access before maturity, so not only might this be inconvenient because of the poor rate – but will be even more of an issue if you need the money.

Off the back of the Office of Tax Simplification paper, which among other things promises to review the complex rules of ISAs, The Times offered a back to basics guide to your ISA options – of course you can download our free ISA guide if you need a refresher – or call us on 0800 011 9705 for help navigating the ISA maze.

In the meantime, Clydesdale and Yorkshire Bank Group (CYBG) has improved on its offer to buy Virgin Money, which has prompted Virgin to enter into negotiations this time. Under the new proposal, Virgin Money Shareholders would own 38% of the new merged business, instead of 36%. The boards of both banks said the proposed deal would create the UK’s first true competitor to the large banks, with six million personal and business customers. The new deadline for a formalised offer to be agreed is 18th June.

As I said earlier, I’m including some interesting but non-cash-savings articles that I’ve read over the weekend. One such article – in fact it’s an advertorial placed by the investment firm Schroders – looks into behavioural science and how our financial decision making is probably being clouded by underlying emotional traits. Schroders has developed a test called InvestIQ – which can reveal your character type. Apparently the most common character is the ‘vigilant planner’ - these are careful investors who sometimes miss out on opportunities because they feel the pain of losses. This character is followed by the level-headed optimist, who cope well with uncertainty but are prone to being impulsive. There are also ‘opinion hunters’ who prefer to follow the crowd and ‘independent riders’ who don’t.

Here’s a statistic for you – according to an article in the Financial Times, most people spend far less time planning for their retirement than they do planning a holiday. Although the introduction of auto-enrolment has apparently nudged 9.6m workers into saving for retirement – which is an important step in the right direction. However, auto-enrolment savings alone are not going to solve the problem. Currently there are still 12m people not saving enough for retirement – that’s equivalent to about 38% of the working population.

And for those who do get saving, according to the Sunday Express, people have a tendency to forget things, especially as they get older. So, if you have diligently put money away, it’s important that you don’t forget where you’ve saved it, which can be surprisingly easy especially regarding pensions if you’ve moved jobs regularly. Harvey Jones suggests that this also applies to assets held by your partner or other family members that could be frozen or lost for good if they die or suffer mental incapacity. The article gives some tips on how to track down any missing money.

Our free Rate Tracker tool can help you to keep a note of all your savings accounts in one place – and it’ll indicate if you could earn more interest by switching.

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