UK Savers’ Still Paying the Cost of Funding for Lending Scheme

By: MoneyFacts

The ill-fated Government initiative to kick-start the housing market, (Funding for Lending Scheme) was withdrawn this January, but not before it had decimated the savings market.       

Now the dust has settled, Moneyfacts has analysed what, if any, impact the withdrawal of FLS has had on the savings market.

The news is bad – average rates across virtually all savings products are still falling.

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“Any faint hope that savings would revert to pre-FLS levels are well and truly dashed and those that clung to the idea that at least it won’t get any worse were wrong, too.”

“The catastrophe that savers need to deal with is that average rates on all but no-notice accounts are still falling.

“If you had invested £1,000 in an average one-year fixed rate bond before the launch of FLS, it would earn £27.70 in interest. By January, an equivalent bond would earn just £15.40, but today even that has fallen to a paltry £14.10.    

“Britain is on the verge of a savings revolution where riskier methods of getting a return are becoming more common place. However, before considering new options, such as peer-to-peer platforms, savers need to be comfortable with the principles of risk and reward. For some, it’s a great opportunity, but the simple fact is that it doesn’t suit everyone.

“Savers’ worried about their money being safe are unfortunately stuck with miserably low interest rates, but better that than put their savings at risk.”  

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.