‘Triple whammy’ of measures from Bank of England boss amid interest rates cuts
Anyone with savings or loans, in particular a mortgage, will be affected - find out how
BANK of England boss Mark Carney has admitted that the UK won't be hit too hard by a Brexit recession as interest rates were cut to a new low.
He unveiled a "triple whammy" of measures amid predictions of an economic slowdown.
I’M ABOUT TO RETIRE. HOW WILL IT AFFECT ME?
Those looking to convert their pension pot into a monthly income at retirement are likely to get less than ever. Richard Eagling, head of pensions at Moneyfacts, said: “It’s likely to add extra downward pressure on annuity rates at a time when they’re already at record lows.” Those relying on savings for income will also suffer.
HOW CAN I MAKE MY SAVINGS WORK HARDER?
If you want certainty consider a fixed-rate bond, Moneyfacts says. These pay a set interest rate for a set time. But you cannot access your money early without a penalty. Consider putting your cash in current accounts not savings as some, such as TSB, pay up to 5 per cent interest. Experts advise paying off credit cards and loans as the cost of borrowing is “almost certainly” higher than returns on savings. Those saving for first homes should consider Help To Buy Isas.
WILL NEW MORTGAGE DEALS GET EVEN CHEAPER?
Mortgage rates have already hit record lows, thanks to price wars between lenders. There is the potential for rates to edge down but many banks have accounted for the cuts in current deals.
WHAT IMPACT WILL THE CUT HAVE ON THE HOUSING MARKET?
If you don’t have a deposit you will find saving more difficult because interest rates are so low. Cutting interest rates further is likely to improve confidence among house-buyers.
WHAT WILL HAPPEN TO MY MORTGAGE PAYMENTS?
It depends on what type of deal you have. Some mortgages are directly linked to the base rate, others not.