The Money Charity’s Money Stats are out today.
New figures show that the average rate of interest for instant access savings accounts is at a record low of 0.37%.
It’s not good news for savers and means that if a mid-income person saved for 12 months at the average rate of 4.4% then put that money in a savings account, they would get only £3.35 in interest after a year.
Saving to buy a house without help is also getting ever further away. It would take 32 years for someone on the average salary, saving the average amount per household every year in an average instant access savings account, to afford the average first-time buyer deposit.
Cash ISAs offer little better – a near-record low of just 0.66% on average – to consumers. At this rate, an ISA would only shorten the wait to save for a deposit by 24 months to 30 years.
Michelle Highman, Chief Executive of The Money Charity said:
“The Bank of England has held base rates at the historic low of 0.5% for nearly seven years. As long as it lasts, this is great for borrowers, but at The Money Charity we fear that not enough is being done to support savers.”
“We welcome the £1,000 in tax-free interest coming in this April, but so long as interest rates are so low, this will make little difference to most people.”
“If you can, we always encourage you to put money aside for a rainy day or to achieve your financial goals. There might not be much interest now, but you will still be able to have the security of whatever you save. And interest rates will rise one day!”
Other figures in March’s Money Statistics include:
- It is more expensive than ever to bring up a child. LV’s ‘Cost of a Child’ report estimates that parents now spend a record £231,843 on raising a child to their 21st birthday – £30.23 a day. This is up 1.1% compared to last year, and has increased 65.1% since the study first began in 2003.
- Total net lending to individuals by UK banks and building societies rose by £5.3 billion in January 2016 – or £171m a day.
- There were 20,404 individual insolvencies in England and Wales in Q4 2015. This is equivalent to 222 people a day or, one person every 6 minutes 13 seconds. This was up 3.6% on the previous quarter but down 10.5% on the same period a year ago.
- CPI (Consumer Prices Index) annual inflation stood at 0.3% in the year to January, up 0.2% from December.
Get the full picture, and many more fascinating facts about money in the UK in our monthly Money Statistics.