Saving in a recession
With the Bank of England keeping base rate low to stimulate the economy, interest rates remain at an all time low. The changing financial landscape is affecting people in different ways, and you may have found that your savings are earning less interest than they used to. On the other hand, if you’ve got a tracker mortgage you could now have more money in your pocket.
In a downturn it’s worth thinking a little differently about savings. We’ve put some practical tips together to help you make your savings work harder, whatever your situation.
You could:
- Build up a cash fund that you can access whenever you need it
- Continue to live off your savings with the help of a tailored financial plan
- Aim for a higher return with longer-term investments
- Reduce your mortgage payments by offsetting your savings against your mortgage.
I'd like to know more about saving with:
Investments
- Develop a tailored financial plan for the future
- Supplement your income with interest from your savings
- Invest a lump sum for a period of time
Loyalty Reward ISA
- 3.05% AER 1 / 3.01% tax-free pa 2 (variable) including a 12-month fixed bonus of 1.00% tax-free pa 3
- Instant access
Transfers-in from other ISAs are not allowed
Offset mortgages
- You could reduce your mortgage repayments by linking your mortgage to your savings and current accounts
Tracker mortgages
- If your mortgage repayments have fallen, you could put the spare cash to work.
Important information
1. AER (Annual Equivalent Rate) illustrates what the interest rate would be if interest was paid and compounded once each year.
2. Tax-free: Indicates that interest is exempt from UK income tax provided all ISA conditions are met. The level and basis of tax can change and the value of tax relief depends on the individual taxpayer.
3. Loyalty Reward ISA is a cash ISA. Applicants must be 16 years old or over and resident and ordinarily resident in the UK for tax purposes. You must not have subscribed to another cash ISA or used your total annual ISA allowance in a stocks and shares ISA during the same tax year. Rates are variable. Interest is paid monthly on the first working day of the month. The rate quoted above includes an introductory bonus of 1.00% tax-free pa. The bonus is payable for 12 months from the date the account was opened, after which point the rate will reduce accordingly. We may withdraw the availability of Loyalty Reward ISA, or withdraw or change the bonus offer, at any time without notice. This would only apply to new accounts opened from that time.