Historic Rate Cut!
Good afternoon everyone, I hope you are all having a great week,
The Bank of England has today cut the interest rate by 0.25% to a record and historic low of 0.25%. Most Banks, Building Societies and Lenders seem to have follows suit and cut their base rates by the same amount.
Savers will unfortunately also see a cut in the rate of interest they are earning on their savings unless they have locked into a fixed rate. Many fixed rate deals may be withdrawn and replaced after today, so you will need to act fast if you want to lock in todays rates.
If you have savings either inside out outside of ISA’s and would like to discuss how you can improve your returns going forwards then please get in touch and I can chat through your options with you.
If you have a mortgage and are on a Variable, discounted or tracker rate you should see the rate reduce and your interest payment come down. If you are on a fixed rate this will remain unchanged until your fixed deal finishes.
If you have a mortgage it could be a good time to review the rates and deal you are on to see if we can improve on it for you. We are expecting a flurry of new fixed rates onto the market in the next few days. It is already possible to get a 2 year fixed rate at under 1% and a 5 year at under 2%. Most of the work is carried out over the phone and by email, so even if your not based in the Essex area we can still help you. If you are interested in our mortgage service then just email me.
Ten Year Gilt yields have dropped to a fresh record low as well, from 0.8% to 0.68% and Stirling has also dropped against the Dollar to 1.3176.
Annuity rates will also be effected by the rate cuts and we will see these reduce and Final Salary Pension Schemes will become more expensive to fund, so these could see an increase in the funds needed to be invested and an increase in their deficit figures. Transfer values from these schemes may rise as a result but it may still not be the best advice to transfer out.
This is a lot of information to take in and digest and the impact on you personally will depend on whether you are a borrower, a saver, in retirement or approaching retirement. Either way this could be a good time to undertake a financial review and make sure you are on the right track to achieve your financial goals.
I am Based in Braintree, Essex but I am happy to travel to you throughout the Essex, Hertfordshire and Suffolk area’s.
Feel free to get in touch with any financial queries that you have whether they relate to the rate cut or not.
All the best
Claire
Claire Blake IFA
07767 308783
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