The saving grace of interest rates

Published 01st Jul 2007

Brits are still in the mood to save, with interest rates already favourable for savers and predicted to become more so over the next few months.

Julia Clayworth, wealth management customer marketing manager at Legal and General, said: “MoneyMood figures show we are in ‘save’ mode compared to three years ago, which could indicate the Bank of England base rate increases, for 4.75 per cent in 2005 to 5.50 per cent today, seem to be having their desired effect – more saving, less spending.

“However this is unlikely to be the only factor influencing savers. When the Bank of England lowered interest rates to 4.5 per cent in July 2006 and then raised rates a year later the mood to save continued to grow steadily.

“Interestingly, MoneyMood found that the percentage of households who said they have money to spend after paying bills and debt payments has increased from 56 per cent to 62 per cent over the three years. This suggests more households are finding themselves in a position where they can afford to save rather than struggling to make ends meet.

“The combination of mood to save, ability to save and high interest rates suggest we could see a real uplift in household saving this year.”
By Ariane Buteux

Source: ' Personal Finance & Savings '

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