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| Savings rates hot up after years of low returns | Savings rates hot up after years of low returns |
| (about 1 hour later) | |
| Savers are finally being offered better rewards from providers after years of low interest rates, but some deals are being pulled within hours. | Savers are finally being offered better rewards from providers after years of low interest rates, but some deals are being pulled within hours. |
| Experts say banks and building societies are leapfrogging each other on best-buy tables as they advertise new products with better returns. | Experts say banks and building societies are leapfrogging each other on best-buy tables as they advertise new products with better returns. |
| This is the flipside of more expensive mortgages seen in recent weeks. | This is the flipside of more expensive mortgages seen in recent weeks. |
| Many providers are raising money by attracting savers which helps them to lend mortgages and other loans. | |
| However, when they have brought in the money they need, their deals are being withdrawn before they become oversubscribed. | However, when they have brought in the money they need, their deals are being withdrawn before they become oversubscribed. |
| "Things are changing so quickly that people are in danger of missing the peak," said Anna Bowes, of independent comparison service Savings Champion. | "Things are changing so quickly that people are in danger of missing the peak," said Anna Bowes, of independent comparison service Savings Champion. |
| "They may be hanging around for something better. Some who are not sure what to do are leaving their money in accounts which offer nothing in interest." | "They may be hanging around for something better. Some who are not sure what to do are leaving their money in accounts which offer nothing in interest." |
| However, whatever the rate, at the same time the buying power of those savings is being eaten away by inflation, or rising prices. The UK inflation rate is currently 9.9%. | However, whatever the rate, at the same time the buying power of those savings is being eaten away by inflation, or rising prices. The UK inflation rate is currently 9.9%. |
| Bank of England in emergency move to calm markets | Bank of England in emergency move to calm markets |
| Homeowners 'tearing their hair out' over rising rates | Homeowners 'tearing their hair out' over rising rates |
| The Bank of England has been engaged in a bond-buying programme in recent days to fulfil its role in bringing financial stability to the UK. | The Bank of England has been engaged in a bond-buying programme in recent days to fulfil its role in bringing financial stability to the UK. |
| But separately, it is still widely expected to raise interest rates as part of its monetary policy. That likelihood was heightened by the recent mini-budget. | But separately, it is still widely expected to raise interest rates as part of its monetary policy. That likelihood was heightened by the recent mini-budget. |
| As a result, the interest charged on new fixed-rate mortgages has been increasing. The average two-year fixed deal now has a rate of close to 6.5%, according to the financial information service Moneyfacts. On the day of the mini-budget, it was 4.74%. | As a result, the interest charged on new fixed-rate mortgages has been increasing. The average two-year fixed deal now has a rate of close to 6.5%, according to the financial information service Moneyfacts. On the day of the mini-budget, it was 4.74%. |
| As rates rise, so do the interest rates offered to savers. In recent days, rates on easy access accounts have reached 2.75%. For those willing to lock their savings in for a year, returns are close to 4.5%. Both are much higher than anything offered in recent years. | As rates rise, so do the interest rates offered to savers. In recent days, rates on easy access accounts have reached 2.75%. For those willing to lock their savings in for a year, returns are close to 4.5%. Both are much higher than anything offered in recent years. |
| Lots of money saved | Lots of money saved |
| The idea of saving money will be alien to many people struggling with the rising cost of living. A recent survey by the Building Societies Association (BSA) found 35% of those questioned had stopped saving as a result of the rising cost of living. | The idea of saving money will be alien to many people struggling with the rising cost of living. A recent survey by the Building Societies Association (BSA) found 35% of those questioned had stopped saving as a result of the rising cost of living. |
| Meanwhile, 36% of those asked said they were relying on their savings to get through a period of rising bills and prices. | Meanwhile, 36% of those asked said they were relying on their savings to get through a period of rising bills and prices. |
| Some credit unions are offering ways to help families save for expensive times of year, such as Christmas. | Some credit unions are offering ways to help families save for expensive times of year, such as Christmas. |
| Jonathan Moore, chief executive of the Stockport Credit Union, said they were encouraging a savings habit with products that lock in savings until they are released to help pay festive costs, or to cover higher energy bills. | Jonathan Moore, chief executive of the Stockport Credit Union, said they were encouraging a savings habit with products that lock in savings until they are released to help pay festive costs, or to cover higher energy bills. |
| Many millions of pounds are still in savings accounts - some of which was built up during Covid lockdowns - but some of that will receive almost nothing in interest if it has been in the same account for years. The BSA said that 31% of those asked in its survey never checked what interest rate they were getting with their bank or building society. | Many millions of pounds are still in savings accounts - some of which was built up during Covid lockdowns - but some of that will receive almost nothing in interest if it has been in the same account for years. The BSA said that 31% of those asked in its survey never checked what interest rate they were getting with their bank or building society. |
| Higher rates can also help those who have saved for a pension, despite the current turbulence in that sector. | Higher rates can also help those who have saved for a pension, despite the current turbulence in that sector. |
| An annuity is a fixed retirement income for the rest of your life which you buy once using some, or all, of the pension pot saved up when you are working. | An annuity is a fixed retirement income for the rest of your life which you buy once using some, or all, of the pension pot saved up when you are working. |
| They have been somewhat out of favour during a decade of low interest rates. | They have been somewhat out of favour during a decade of low interest rates. |
| Now they are becoming more attractive again. The deal you get is better when gilt yields are high, and they have been rising. | Now they are becoming more attractive again. The deal you get is better when gilt yields are high, and they have been rising. |
| Providers say demand is growing as new pensioners consider how best to manage their finances in retirement. The free, government-backed MoneyHelper service, with its Pension Wise helpline, can assist with some of the basics. | Providers say demand is growing as new pensioners consider how best to manage their finances in retirement. The free, government-backed MoneyHelper service, with its Pension Wise helpline, can assist with some of the basics. |