As is well known, interest rates have been held at unprecedented lows to boost the economy and to keep the cost of borrowing down since the last financial crisis in 2007-08. They fell to 0.5 per cent in March 2009 and remained at that level until August 2016, when they were cut to 0.25 per cent. Although it is anticipated that interest rates will rise, Mark Carney, the governor of the Bank of England, has suggested that increases will be limited and gradual.
While this is good news for borrowers, long-suffering savers will continue to experience low returns. Predictions are that low interest rates will prevail for a number of years to come.
But the ultimate aim of successive governments is for individuals not to have to rely on the state in times of need and there have been many initiatives to encourage saving. Last year, a study by the Money Advice Service found that more than 16m people have less than £100 in savings. Clearly, there is some way to go.