Sub prime crisis good news for UK savers

Make sure your savings are earning a top rate

It seems we'd rather spend on a sunny day, than save for a rainy one.

sub prime crisis good news for uk savers

Sub prime crisis good news for UK savers

A number of banks have unexpectedly increased their fixed term savings products by as much as 0.55% today, and it’s all thanks to the sub prime mortgage crisis taking place across the pond.
Derbyshire Building Society hiked their one-year fixed rate bond from 6.3% to an impressive 6.85%, while Northern Rock upped their one-year product by 0.31% to 6.71%.

While it usually takes an unwelcome base rate hike to force stingy banks into offering more attractive rates, money search engine Moneyfacts says today’s increase is down to the fact they are desperate to bring money in.

 Institution Term Account New rate Old rate
 Derbyshire BS One year Fixed rate bond 152 6.85% 6.30%
 West Bromwich BS One year E bond 11 6.75% NA new product
 Northern Rock One year Fixed rate bond 292 6.71% 6.40%
 Heritable bank Two year Fixed rate bond 20 6.70% 6.36%
 Heritable bank Three year Fixed rate bond 30 6.65% 6.26%

One man’s meat is another’s poison
“With money markets in a volatile state on the back of the US sub-prime mortgage crisis, it is not surprising to see savings rates being increased, in an attempt to bring funds in via their front doors, rather than resorting to traditional methods,” says Moneyfacts news and press head Andrew Hagger.

“With rates being increased by up to 0.55% in some cases, it is an excellent opportunity for savers to bag themselves a great fixed rate savings deal, as institutions battle to bring in additional funds to help them during these difficult times.”

Make sure your savings are earning a top rate

Start saving, stop spending
And while these rates hikes are welcome, they will mean nothing if we don’t take advantage of them. Sadly, we’re doing exactly the opposite at the moment, filtering on average £400 from our savings accounts in the last three months alone.

According to Birmingham Midshires, over-55s are the worst offenders, filtering more than four times the amount of the under 30s (£682 compared to £151). Almost a quarter (23%) of this group used the money to fund their holiday.

It seems we’d rather spend on a sunny day, than save for a rainy one.

“While homeowners are feeling the pressures following Bank of England rate decisions, there has never been a better time for people to put away their money,” says Birmingham Midshires savings operations director Jason Robinson.

“Interest rates at a six year high mean great returns for savers, whatever amount you can afford to put away.”

Compare instant access saving accounts here

 Reason British average 25-34 year olds 35-44 year olds 45-54 year olds 55+
 Overspending on current a/c 25 37 37 25 18
 Holiday or w/e brreak 21 18 19 24 23
 Emergency car/home repairs 18 15 20 16 23
 Unexpected bills 14 13 17 10 14
 Gifts, treats or luxuries 11 14 10 9 8

UK Savers & Equity Release

What Is Equity Release?

Equity release is the use of financial arrangements that provide the owner of a house, or other property, with funds derived from the value of the property while enabling them to continue using it.

How Does Equity Release Work?

Equity release is aimed at homeowners aged 55 and over. It allows you to take some of the value of your home as cash.

Equity Release as a form of Savings

Over 55, own your own home, but struggling for cash/want a more comfortable retirement? The easy solution, according to the adverts at least, is to equity-release. While rates are the cheapest they’ve been in years, equity release itself is still an expensive and risky way to raise cash. In this guide I’ll run you through the key points you need to consider.

Editorial Note: This content has been independently collected by the EveryInvestor advisor team and is offered on a non-advised basis. EveryInvestor may earn a commission on sales made from partner links on this page, but that doesn’t affect our editors’ opinions or evaluations. Learn more about our editorial guidelines.
Taylor Holt - 300x300

Written by
Taylor Holt
Estate Planning Expert

Taylor Is Our Resident Estate Planning Expert. He Knows That Everything Revolving Around Wills or Funeral Planning Can Be a Sensitive Subject That People Don’t Like to Discuss. But He Also Knows How Important It Is to Know All There Is to Know About It. Taylor Makes It His Mission to Spread Awareness About Estate Planning, and We Believe Everyinvestor Is the Best Platform to Do That.

Monique - 300x300

Written by
Monique Pittman
Pensions Expert

Monique Is Our Resident Pensions Expert. Many People Postpone Planning Out Their Pension, Thinking That Is Something They’ll Have to Worry Much Later in Life. Monique Knows How Important It Is to Start Planning Your Pension Early, and She Wants You to Know It Too!

Written by
Lisa Schilling
Insurance Expert

Lisa Is Our Resident Insurance Expert. She Knows How Important It Is to Be Ready for Any Scenario, Especially When a Family Member Is Involved. Nobody Likes Being Found Unprepared in a Tough Situation! Lisa Can Find the Best Insurance to Cover Your Every Need, Present and Future.

Doyle Edwards - 300x300

Written by
Doyle Edwards
Mortgages Expert

Doyle Is Our Resident Mortgages Expert. He Comes From a Long Line of Financial Gurus, and It Truly Shows. Despite His Young Age, There Is No Question He Cannot Answer When It Comes to Mortgages, and His Ability to See Outside of the Box to Find the Best Mortgage Deals Is Truly Impressive.

jason stubbs 300x300 1.jpg

Written by
Jason Stubbs
Equity Release Expert

Jason Stubbs Is a Specialist in the Equity Release Sector. He Enjoys Helping Older People Who Are Struggling Financially Get Out From Under Financial Pressure.

rachel w.jpg

Rachel Wait
Personal Finance Journalist

Rachel is an experienced finance journalist and editor with a particular interest in personal finance and consumer affairs. She has vast experience writing about money issues, property, insurance, and consumer affairs, and you’ll find her articles regularly featured in top media and newspaper publications.

Reviewed by
Francis Hui
Senior Risk Manager

Having held various high-level roles across the industry, Francis is truly an expert in aiding UK citizens in their financial decisions and risk analysis. His unique insight and statistical knowledge make him the perfect person to help you take your financial future to the next level.
Mark Patterson

Written by
Mark Patterson
Mortgage Expert

Mark Patterson is a well-known expert in mortgages. He has been working as an expert for over 15 years, and he specializes in the UK mortgage market.
kath icon.png

Katherine Read
Consumer Affairs Writer

She writes on the topics of equity release, home reversion, and mortgages.

Nicola Date

Nicola Date
Writer & Journalist

Nicola is a financial writer for EveryInvestor and is passionate about the opportunities that equity release can open up for homeowners. Her extensive business experience and deep understanding of the industry means that she’s always up-to-date with the latest developments.