Will they or won’t they? That is my burning question. Who on Love Island will ‘couple up’ with whom among the impossibly well groomed and suspiciously even-tanned participants?
Only kidding. Whilst the reality TV show is gripping the nation (well certainly my grown-up daughters) I want to know whether the less well-coiffed and more sun-starved boffins meeting in vape-filled rooms will stick their necks out and raise the Bank base rate next month.
The latest indications suggest we will indeed see the rate edge up a smidgin in August (possibly from 0.5 to 0.75 per cent), partly because of all that sun-induced shopping that is apparently warming up the economy.
The latest indications suggest we will indeed see the rate edge up a smidgin in August
This would be a welcome development for savers so long as banks and building societies pass on the increase.
And it cannot come too soon. Worryingly, our savings habit is waning. Official statistics suggest that in the second quarter of 2018 we have been putting aside just 4.1 per cent of our disposable income for a rainy day compared with 4.5 per cent in the three months previously. (And this is for all types of savings from pensions and investments to cash deposits).
What savers need is a carrot or two to rev up their efforts. The good news is some providers are so sure an August base rate rise is in the offing that they are already reflecting the increase in deals being offered on fixed-rate savings accounts and are getting in quickly to beat their rivals. Wonderful news that competition is finally returning to the market.
One, two and three-year fixed rate bonds have hit a two-year high and savers can get more than 2.5 per cent on a five-year deal.
One reason savers lose out more than they should is they cannot move fast enough to open an account before a good deal is withdrawn. Sometimes the best rates are only offered for a week or two. The thought of undergoing money laundering checks, proving identity and completing a pile of forms every time is a barrier to action.
Cheap money: A survey suggests people are more worried about credit card debt than any other – even their mortgage
One company hoping to put an end to this frustration – and apathy – is new operation Raisin.
It recently launched a ‘savings marketplace’ where customers sign up and jump through the ID and anti-money laundering hoops only once. After that they can search the marketplace and switch easily when they spot a deal they like.
This is not a comparison service, asserts chief marketing officer Richard Owen, as it does not cover the entire savings market. Currently only half a dozen providers (including ICICI, Shawbrook and Malta-based AgriBank) feature – mainly because they are among the banks working hard to provide competitive savings rates.
Savers can only take out fixed-rate bonds for now, although instant access and even Isa accounts are planned.
But the rates are keen. The best deal is from Gatehouse Bank paying 2 per cent on a one-year bond, 2.14 per cent on a two-year, 2.33 per cent on three-year and 2.68 per cent on five-year deal.
There is full Financial Services Compensation Scheme protection on savings up to £85,000 for UK providers or the equivalent for continental European banks.
Another service offering a similar arrangement is Octopus Cash. Savings guru Anna Bowes of advice website Savings Champion has welcomed these services as a potential solution for savers who otherwise would leave their cash languishing in poorly paid accounts with a high street provider.
On the other side of the interest rate equation are borrowers, millions of whom have relied on credit cards as a crutch through the financial crisis and stagnant wage growth.
They will not rejoice at the news of any base rate rise, which will eventually filter through to their repayments.
Figures from R3, the insolvency body, suggest people are more worried about credit card debt than any other – even their mortgage. One in five adults have an outstanding credit card balance of at least six months and a significant number have a balance five-years old. Time to devise a strategy to ditch that debt if you can. Or ‘pie it off’ – as they say on Love Island.
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS