When is the agony for savers going to come to an end?

News Letter editorial
News Letter editorial

The financial crisis began at the height of the last economic boom, in the middle of 2007.

Interest rates were slashed in the autumn of that year, and have remained at rock bottom ever since. For nine long years, savers have suffered as a result of this policy.

Most people fully accept the need for radical financial policies to rescue the banks and the wider economy, to save jobs and to protect homeowners from losing the roof over their heads. But when is it ever going to end?

When are elderly people with small lump sums of cash savings, accumulated over a lifetime of hard work, going to at least see their capital keep pace with inflation?

There has even been talk in recent years of the day coming when savers will have to pay to keep their money in banks.

Many elderly people do not have the inclination to take risk in the stock markets, and the stress that that entails, and so prefer to keep their savings in banks. It is hardly unreasonable of them to hope for a small return on those savings.

Interest rates have been kept super low partly to ensure that those who have over-borrowed are kept afloat. But the needs of responsible savers have been mostly overlooked since the start of the financial crisis almost a decade ago.

Now the consumer group Which? has issued a report about “scissor-happy” Isa providers, in which rates are cut repeatedly. This leaves savers with another stressful and confusing component to their financial affairs, in which they have to closely monitor their accounts. As anyone with an Isa will know, there is endless trickery: savers are lured in by %age interest offers that then expire so that the rate plunges.

Which? identifies one NatWest account that had its return slashed from 2% to 0.25%.

Well done to Which? for also naming the most responsible building societies, which are less likely to cut rates. They deserve custom in these frustrating times for savers.