Savers Suffer - November 2005

UK Mortgage News

A recent survey by Bates Investment Services, has shown that savers are getting a worse deal then they were last month despite the base rate being kept at 4.5%.

The survey shows that the percentage of accounts now failing to provide basic and higher-rate taxpayers with positive real returns after tax and inflation is the highest it has been since February.

Nearly a third of all savings accounts fail to offer savers in the basic tax band a real rate of return while top rate taxpayers do not get a positive return from 68% of accounts. To acheive a positive return, basic rate taxpayers need a savings account with an interest rate of more than 3.13%. Those in a higher rate band would need an account paying at least 4.17%. There are still a number of savings accounts that pay higher rates of interest but you will be unable to access your funds for at least 12 months. You may also be expected to save between the minimum amount - usually around £10 per month and the maximum of £250 per month.

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