EddardStark Posted December 8, 2014 Share Posted December 8, 2014 (edited) Households ability to cope with increases is questioned. These predictions assume above average wage increases as well so it could be worse Go to page 8. http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q405.pdf Edited December 8, 2014 by EddardStark Quote Link to comment Share on other sites More sharing options...
Orraloon Posted December 8, 2014 Share Posted December 8, 2014 To be honest, I don't have an awful lot of sympathy for folk who find it difficult to cope with increasing interest rates. Interest rates have been at a record low for the best part of a decade now. Folk taking out loans and mortgages should have factored in a rate rise to their calculations before getting into debt. Having said that it is still far too easy for folk who can't afford it to get credit so the banks have to take a lot of the blame as well. They really should know better by now. The answer is fairly simple. if you are worried about interest rates don't borrow money. Quote Link to comment Share on other sites More sharing options...
giblet Posted December 8, 2014 Share Posted December 8, 2014 We've had a very good innings on the run of low interest rate. People should be lumping in on their mortgages just now. Quote Link to comment Share on other sites More sharing options...
Charlie Endell Posted December 8, 2014 Share Posted December 8, 2014 It has been a miserable period for savers. Quote Link to comment Share on other sites More sharing options...
UPROAR Posted December 8, 2014 Share Posted December 8, 2014 there is absolutely no chance of a rate rise soon or even through the whole of next year imo..... Quote Link to comment Share on other sites More sharing options...
Charlie Endell Posted December 8, 2014 Share Posted December 8, 2014 Sadly not. Quote Link to comment Share on other sites More sharing options...
giblet Posted December 8, 2014 Share Posted December 8, 2014 It has been a miserable period for savers. ISA choices recently have been ridiculous. 1% gives you no motivation to leave your money there. Quote Link to comment Share on other sites More sharing options...
Charlie Endell Posted December 8, 2014 Share Posted December 8, 2014 Folk will say invest elsewhere (with the potential of better returns, but riskier) but I always like to have some 'rainy day' money that I can easily access. I have two cash ISAs, which currently pay 1.5% and 1.75% . Quote Link to comment Share on other sites More sharing options...
Flure Posted December 8, 2014 Share Posted December 8, 2014 It has been a miserable period for savers. This. Quote Link to comment Share on other sites More sharing options...
EddardStark Posted December 8, 2014 Author Share Posted December 8, 2014 I don't have any debt but I am concerned about how interest rates could impact on economic recovery never mind individuals. Agree about its a bit away yet but you have to wonder whether the moderate recovery is based borrowing and spending money that people don't have . Quote Link to comment Share on other sites More sharing options...
Rorinho Posted December 8, 2014 Share Posted December 8, 2014 Regarding savings, yes there's an element of risk attached, but I've done mine through Hargreaves Lansdowne Stocks and Shares Isas - This year all 3 funds have returned above 5% Quote Link to comment Share on other sites More sharing options...
Khana Lagur Posted December 8, 2014 Share Posted December 8, 2014 Interest rates, or rising interest rates, will be the next economic timebomb IMO. Borrowers are now used to low rates and not many of them really understand the percentages involved. Many see a rise from 0.5% to 1% as a half percent rise. Never had an ISA (and never will) but can I ask those that do why they have got them? With almost £11,000 in capital gains allowance offset by management/admin/set-up fees, what's the appeal? Quote Link to comment Share on other sites More sharing options...
ParisInAKilt Posted December 8, 2014 Share Posted December 8, 2014 Kinda new to having savings and stocks / shares etc scare me, don't fancy any form of gambling when I don't really know much about it. Saving accounts out here aren't bad, getting about 4% but with inflation not sure how good it really is Quote Link to comment Share on other sites More sharing options...
sbcmfc Posted December 8, 2014 Share Posted December 8, 2014 I've been warning the wife about this. She's quite sensible with money, but don't think she realises the effect it would have on our mortgage payments if the interest rates go up. We've started looking at moving house, and it is a tricky situation, we don't want to regret moving into a house that's too small or in a bad area, but also don't want to put ourselves in the position where a hike in interest rates would cause us problems.... Quote Link to comment Share on other sites More sharing options...
Toepoke Posted December 8, 2014 Share Posted December 8, 2014 We've had a very good innings on the run of low interest rate. People should be lumping in on their mortgages just now. Problem is over the same period we've been hammered by inflation. Our monthly mortgage payment is small but we're still saving next to zilch. (Mind you in my old days as a saver I didn't have weans!)... Quote Link to comment Share on other sites More sharing options...
Deedee Posted December 8, 2014 Share Posted December 8, 2014 but also don't want to put ourselves in the position where a hike in interest rates would cause us problems.... Try and find a long term fixed rate. Quote Link to comment Share on other sites More sharing options...
Charlie Endell Posted December 8, 2014 Share Posted December 8, 2014 (edited) Interest rates, or rising interest rates, will be the next economic timebomb IMO. Borrowers are now used to low rates and not many of them really understand the percentages involved. Many see a rise from 0.5% to 1% as a half percent rise. Never had an ISA (and never will) but can I ask those that do why they have got them? With almost £11,000 in capital gains allowance offset by management/admin/set-up fees, what's the appeal? Simply use my cash ISAs (instant access, no withdrawal penalties) to hold my 'rainy day' money for the unexpected. I wouldn't entertain a shares ISA. Edited December 8, 2014 by Charlie Endell Quote Link to comment Share on other sites More sharing options...
sbcmfc Posted December 8, 2014 Share Posted December 8, 2014 Try and find a long term fixed rate. Yeah, we fixed originally for 3 years, which in hindsight was a mistake, but at least that way we know what it costs. Just on the variable just now, as we plan to move in the next 10 months or so. Quote Link to comment Share on other sites More sharing options...
kumnio Posted December 8, 2014 Share Posted December 8, 2014 Was reading about this last night after listening to a podcast. After looking into, it wont have a major impact on my mortgage, although Id obviously like to see the rates as low as possible for the foreseeable future. Ive previously put my savings into my mortgage, and upped what Im paying to clear the debt ASAP, only have 6 years to go, so will have it all paid off in 9 years as opposed to 25. If rates then increase massively, my savings will be profitable, which would be nice. I know a few people who would be badly hit by a significant rate increase though, not everyone has much flexibility as they need sadly. Quote Link to comment Share on other sites More sharing options...
phart Posted December 8, 2014 Share Posted December 8, 2014 Usury is great racket if you can get into it. Quote Link to comment Share on other sites More sharing options...
ParisInAKilt Posted December 8, 2014 Share Posted December 8, 2014 The thought of a mortgage terrifies me Quote Link to comment Share on other sites More sharing options...
Deedee Posted December 8, 2014 Share Posted December 8, 2014 Moneybox on Radio 4 usually has good advice on mortgages. Think it was on there they were saying that a lot of mortgage brokers themselves have offset mortgages. Bit more complicated but can save a lot of money. Quote Link to comment Share on other sites More sharing options...
Deedee Posted December 8, 2014 Share Posted December 8, 2014 The thought of a mortgage terrifies me I`ve just come out of one and staying clear for the next couple of years anyway. Quote Link to comment Share on other sites More sharing options...
dipped flake Posted December 8, 2014 Share Posted December 8, 2014 Folk will say invest elsewhere (with the potential of better returns, but riskier) but I always like to have some 'rainy day' money that I can easily access. I have two cash ISAs, which currently pay 1.5% and 1.75% . Newcastle building society pays 2.54 at the moment Quote Link to comment Share on other sites More sharing options...
EddardStark Posted December 8, 2014 Author Share Posted December 8, 2014 Santander pays 3% on balances up to £20k in its current account. If your partner of even yourself is a non tax payer then that is worth looking at in terms of setting it up. In terms of fixed deals then the maximum I would fix would be for two years to ensure you don't miss out on potential interest rate rises. Cash ISA's are slowly becoming not worth it unless you have a very significant ISA built up over a period of time. Stocks and Shares ISA's a better option provided you take the long term view. Over the last 4 years I have returned around 20% on average. In terms of mortgages then lots of buyers who took out fixed rate deals may actually be paying above the standard rate. So when they come out of these deals they may actually have a bit of spare cash. My lad being one of them. Quote Link to comment Share on other sites More sharing options...
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