The war on savers continues, with banks cutting deposit rates down to almost zero.
Substantial reductions in savings rates quietly introduced over the holidays have left consumers with accounts paying out as little as 0.1 per cent on deposits at a time of economic uncertainty when many households are planning to put more money aside.
The cut in savings rates will particularly affect pensioners who depend on interest payments to supplement their savings for retirement, financial advisers fear. "It’s bleak for all savers, and pensioners in particular,” said Ben Yearsley, an investment manager with advisory firm Hargreaves Lansdown. "We’ve reached a point where savings rates are lower than the rate of inflation.”
This week, Abbey, Lloyds TSB, Halifax, Barclays, NatWest, Alliance & Leicester, Nationwide and Royal Bank of Scotland slashed rates on variable savings accounts by 1 percentage point or more.
Banks now paying massively negative interest rates; government bonds yields are similarly negative; and the UK equity market is down by a third. There is simply nowhere for savers to go without making massive financial losses. It is now pointless to try to save; the government will acquire all private sector savings through withholding tax and inflation.
This is classic New Labour; whenever those jokers find themselves facing a problem, their solution is always to replace the initial difficultiy with an even bigger problem. After a few years of this kind of mad financial policies, the UK will be left with millions of poverty-trapped pensioners. The feckless and prudent alike - everyone will be dependent upon the state.