Martin Lewis urges savers to do THIS following Bank of England interest rate hike

martin

7 years ago

The Bank of England has increased interest rates for the first time in a decade today.

High inflation squeezing UK households initiated the decision, as the base rate was lifted from 0.25pc to 0.5pc.

People with savings have been feeling pressure from low interest rates – the last hiked interest rates were in July 2007, when the UK economy was experiencing a financial crisis.

Money Saving Expert explains what the interest rate rise means for those with savings.

He said: “Low interest rates have been a plague for many with savings, especially those who retired and expected to live off the interest. So rate rises are generally good news for them – indeed we’ve already seen rates crawl up in expectation.

“The top easy access deal is now 1.3 per cent, compared to just 1 per cent a few months ago. This means I doubt we’ll see the top best-buys rise by the full 0.25 per cent over the next few weeks.”

Martin has predicted they will max out at 1.4 per cent to 1.5 per cent.

But he added: “Yet many people have money in savings accounts already paying pitiful, spitworthy rates like 0.1 per cent, and they are unlikely to rise.

“Those in a middling account paying about 0.5 per cent may see an increase over the next few weeks. But if you’re earning less than 1 per cent, it’s a c*** account anyway so you should ditch and switch.”

Martin appeared on This Morning earlier this week and revealed the best savings accounts to take advantage of now.

Birmingham Midshires

Pays 1.3 per cent AER variable, and it’s easy to access, so you can withdraw your money whenever you want.

The Post Office

Pays a slightly less 1.27 per cent AER (1.02 per cent bonus for a year). You can save from £1 in all these accounts and they all allow unlimited withdrawals.

The rates are variable so monitor them and be prepared to ditch and switch if they drop.