Bank accounts: interest rates 'penalising savers'
Published 18 April 2012
A Treasury Committee report has acknowledged that today's low interest rates are 'penalising savers' - but not everyone will see interest rates as the main issue when they're choosing a bank account.
The Bank of England's approach to the country's economic problems may have helped the country through tough times, but savers have suffered from low interest rates.
The Bank's base rate is still at an all-time low of 0.5% today, where it's been ever since March 2009, over three years ago. In that time, we've seen countless articles complaining that while low interest rates benefit borrowers, they're bad news for savers.
Now, a House of Commons Treasury Committee has issued a report on the Budget, stating that: 'Loose monetary policy, achieved through quantitative easing and low interest rates, has redistributional effects, particularly penalising savers, those with 'drawdown pensions' and those retiring now.'
Sir Mervyn King, Governor of the Bank of England, said, "Gradually I hope we will be able to raise interest rates back to a more normal level, as the economy recovers."
For people with a large amount of savings, the interest rate on their bank account is a major factor - but for those whose income just covers their monthly expenses, it's simply less important.
A spokesperson for thinkbanking commented: "The interest rate is just one aspect of a bank account. If earning interest on your savings is one of your priorities, it obviously pays to shop around for a good rate. If, however, you're frequently in your overdraft, you'd probably be better finding an account with low overdraft fees.
"And if you're concerned about getting your bills paid on time and not running out of money before the end of the month, you could consider the thinkmoney Current Account, which is designed to ensure all essential payments are made on time."
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