The Financial Blog

Interest paid on savings accounts savings accounts is looking far more healthy than this time last year when savings rates were just better than the Bank of England Base Rate! And so it’s savers who are reaping the benefits of 6 per cent and higher interest rates. There are even some current bank accounts offering up to 8 per cent interest.

Borrowers are however having to pay more interest, particularly on their loans loans which are averaging just over 2 per cent above base rate. The figures from Moneysupermarket.com reveal how quickly the UK personal finance world has changed since the US credit crunch and how quickly rates in the UK high street have been affected.

Tim Moss, head of loans at price comparison site Moneysupermarket.com said: “Poorer Brits are now paying the price for banks’ poor lending decisions of the recent past. Their lending mistakes in the US, in particular, are now hitting people here who can least afford it.

“Lenders are ramping up their rates to claw back profits. For every happy saver in Britain, there is a now a disappointed borrower.”

Kevin Mountford, head of savings and current accounts at http://www.moneysupermarket.com said: “Savers though, back in July, were barely getting any return above the base rate, but now they are consistently seeing rates one per cent or more above the Bank of England’s figure.

“Add to that, the current accounts from Alliance and Leicester and Abbey paying eight per cent or more and savers have never had it so good.

“Banks know they need to increase their level of savings so they are now fighting for new customers.”

This entry was posted on Friday, March 28th, 2008 at 1:14 pm and is filed under Savings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.