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Grumblewagon
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12-03-2014, 08:53 AM
1

Interest rates to rise..

The governor of the Bank of England has suggested hat interest rates are to rise over the next few years.

ABOUT TIME

Millions of savers have endured pathetic rates for far too long. Of course there will be cries of "what about people who will have to pay more on mortgages etc..?"

Did they honestly think that rates would remain low for ever?
Julie1962
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12-03-2014, 09:20 AM
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Re: Interest rates to rise..

There is certainly an unfairness in the system, we need rates low enough they don't penalise mortgage holders and high enough they don't discourage savers.

I have a theory they put savers rates so low to make people spend us out of the credit crunch, didn't really work though did it ....
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12-03-2014, 10:16 AM
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Re: Interest rates to rise..

I know it is impossible to please everyone but those of us who have scrimped and saved all our lives and gone without to make sure we have a small amount of savings to cover emergencies after retirement have been severely punished over the last few years.
It is about time we were given a bit of consideration.
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12-03-2014, 10:50 AM
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Re: Interest rates to rise..

Originally Posted by Meg ->
I know it is impossible to please everyone but those of us who have scrimped and saved all our lives and gone without to make sure we have a small amount of savings to cover emergencies after retirement have been severely punished over the last few years.
It is about time we were given a bit of consideration.
Yes, indeed. And regarding mortgages, when I first took out a mortgage I was conscious of the fact that rates could rise so didn't mortgage myself to the hilt but allowed for the fact that payments could increase. I think too many people now have been encouraged to take advantage of the low interest rates without a thought for the fact that eventually they will rise and need an increased financial commitment. A bit of forward planning never did anyone any harm...And while those with mortgages see their investment rising above inflation those with savings just see them eroded by inflation.
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12-03-2014, 11:38 AM
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Re: Interest rates to rise..

I agree about mortgages when we took ours we made sure we could pay it off long before retirement and it would have needed interest rates of 50 or 60% to catch us out. Sadly though like a lot of other people we got caught out when we had to remortgage due to endowments no longer paying out and now older than we wanted to be when our mortgage was originally due to end we are now not earning as we did due to ill health. So hope the low rates carry on a while longer now for us but I know people who genuinely over stretch should not have bought a house at all.
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12-03-2014, 01:44 PM
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Re: Interest rates to rise..

Re mortgages, that may have been true years ago, different story today without job security. A good balance is needed to help both.
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12-03-2014, 02:10 PM
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Re: Interest rates to rise..

It's a double edged sword, if interest rates are set to rise then it means inflation is preceding it so the higher interest rates will merely cover the cost of higher prices and at the same time dampen growth.

Be careful what you wish for.
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Grumblewagon
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12-03-2014, 05:20 PM
8

Re: Interest rates to rise..

Bruce, when interest rates are so low, it's not worth saving so you might as well spend it and this boosts retail sales figures. Then when your savings are gone you can't spend as much and retail sales fall off again.

So you've got to balance things and encourage people to have enough savings for a 'rainy day', but keep the retail market going.
I'd be happy to get the 6 or 7% that I was getting a few years ago, but even 3 or 4% would be much better than the 1.5 - 2% you get currently.
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12-03-2014, 05:44 PM
9

Re: Interest rates to rise..

Originally Posted by orangutan ->
Yes, indeed. And regarding mortgages, when I first took out a mortgage I was conscious of the fact that rates could rise so didn't mortgage myself to the hilt but allowed for the fact that payments could increase. I think too many people now have been encouraged to take advantage of the low interest rates without a thought for the fact that eventually they will rise and need an increased financial commitment. A bit of forward planning never did anyone any harm...And while those with mortgages see their investment rising above inflation those with savings just see them eroded by inflation.
My thoughts exactly orangutan!

For quite some time now I've seen or heard mention people with mortgages "struggling" in the recession, (no mention of unemployed people I must point out), but when I first had a mortgage I was paying 15% interest and that WAS a struggle.

All those people should have thought about it more before they changed their lifestyle and spent the money they didn't have to pay on their mortgages because the rate was kept low shouldn't they?!

That's how I look at it and I'm sorry if people get upset but aren't we all supposed to be in control of our own finances?

When our mortgage interest went down I put the interest we would have paid away and used it to pay off the mortgage with lump sums every so often because it reduced the interest I was paying every month.

2 years of doing this meant that the difference between the total owed on the mortgage and the shortfall on my endowment got less and less until 2010 there was just enough to pay the mortgage off in the endowment.

The difference that made to our finances was very welcome as I'd been trying to keep us going on Temp income at the time and then I lost that job.

I still doubt that savings rates will go up for some time though unfortunately. stevmk2
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12-03-2014, 08:54 PM
10

Re: Interest rates to rise..

We lost a home in the 80's high interest times so we were very careful this time, as I explained earlier it isn't so simple though with endowments failing. Also back then I am sure wages were going up fairly regularly too we haven't seen a pay rise in many years now and the NMW is only going up to £6.50 so not exactly helpful when other prices are rising so fast.
 
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