Martin Lewis' Urgent Warning For Savers! | Good Morning Britain

The Bank of England then kept interest rates at 5.25. It is the first time they have not increased in almost two years. What does that really mean for all of our finances and what impact will it have on the current cost of living crisis? Well, Martin Lewis. join us now so

good

morning

Martin

good

morning

there you have a lot of questions that you are the person who can answer what does this mean? I think the most

urgent

people who need to think about this are Savers, it's pretty strange now. It is not like this? We are talking about a story about the Bank of England having done nothing, but the markets move according to expectations and what we have had this week is that on Wednesday we had lower than expected inflation figures and then we had the bank.

England did not raise interest rates when markets expected it to and that has changed widespread expectations for the future of interest rates and that is not just an intangible that is there and that has a real impact on savings rates. , so we are likely to see savings rates fall and, more specifically, because easy-access savings, the variable rates that most people have, where you can put your money and take it out whenever you want, tend to move with the base rate of the Bank of England. but the rate at which you can get fixed savings that pay more when you set aside your money for a certain period to earn more on it, tend to move with expectations of future interest rates, so we're talking about those fixed savings and there's a particularly good deal right now that I'll talk about right now, but what you have to understand is that we think that nobody knows that means that the highest fixed savings rates are likely to be reduced a little bit, but what I posted in the social networks. yesterday and the trick you need to understand right now is that if you go and open a fixed savings now you normally have a week or two weeks or in some cases even a month to fund it and you can still take your money.

See if you change your mind, so what I would suggest people do now, those who have been looking to get fixed savings where they were able to keep the money for a year, two or three years, is to go and open at the fixed top. Savings Account Now open it, but if you want to see what will happen if interest rates and other savings rates go down, don't fund it until the last minute so you can have the service available at today's high rates and if rates go down, you can put your money there and you will be stuck at that rate for a year or two and if rates don't go down or even if they went up in the opposite direction, it is unlikely, but it could happen that the markets move all the time .

Well then you just open another account and don't put your money into this one and that's the wake up call I got and I know there are often people who are surprised that there are more savings accounts in the UK than there are. debt accounts every time we make phone calls on the show we talked about we get more questions about savings than anything else, many people who built up savings during the pandemic have money saved at the moment they are desperate to earn that much interest. as possible because this is your savings or your safety net right now, if you can afford to put money away, open a high-end savings account and then wait a week or two to see what happens before you put your money into it. . which is the same Martin regarding cash Isis also yes yes it is fixed rate cash ice like cash Isa is just a savings account that you don't put money into but I have to say the first thing I would look at at the moment there is an incredibly amazing type of pending account on the market and the reason why it leaves outstanding account amazing is not only because it pays the highest rate that it pays, which is 6.2 percent, but because of who offers it. offered by what is called nsni which most people will know by its old name national savings so this is the state financial institute and the reason why that makes it interesting is when you normally put money into the account savings, you are protected up to £85,000 per person per financial institution, but you put money into NS and I.

National savings people used to get it through the post office in the old days, it's not the same as post office savings, well all your money is backed by the state and these accounts allow people deposit up to one million pounds. They are called capital guaranteed bonds. It is effectively a one year solution or guaranteed income bonus. If you want to withdraw your money each month, you can deposit anywhere from £500 to a million and it's all protected - it's the highest rate of any solution on the market at 6.2 per cent. Now you might be thinking, yes, a million pounds, but quite a few people sold houses a year or two years ago and they have that part of the money they haven't decided to buy again because they are waiting to see what happens with the property market.

They have to distribute it between several accounts. Well, if I were in that fortunate position of having a large amount of money. having cash to be able to put everything at the highest rate with perfect security is relatively unheard of and I don't think those nsni accounts are going to be around for long, so 6.2 percent on Total Security with a big name It's really quite a lot and I have a surprisingly different deal that's available right now and they just have to have a certain amount of money going into ns9 you talk about cash Isis now I used to be a big I always used to say your money is better on the cash Isa and then I stopped saying it because a cash ice is all about tax when you get interest on savings you are eligible to pay tax, but in 20 or it was 16 or 17, I don't remember getting off the top of In my head a new thing was introduced called a personal savings account, personal savings allowance and that means you can earn a thousand pounds of interest a year without paying tax if you are a basic rate taxpayer 20 per cent if £500 interest if you are a taxpayer with the highest rate and that exempted most people from paying taxes and as normal savings they pay more than cash as it meant they should just put money into normal savings because they don't need to be protected but now the rates interest have gone up a Thousands of pounds of interest can be generated with 10 15 20 000 pounds of savings that are starting to reach the Kingdoms that some not so rich, as you know, have

savers

, people have that money, especially the pensioners, and if you are a taxpayer, it is now.

It's worth considering: have you used your cash? Isa. If you're going to earn enough interest, you'll use your £1,000 a year interest allowance as a basic-entitled taxpayer, so cash is a backup. They're just savings accounts that don't pay tax, so if you're going to pay tax on the savings, open the cash Isa first and then look at normal savings, then it's fascinating. Now, what about those who are not in the fortunate position of saving? They will look at the interest rate thinking what we do with mortgages all of that very briefly what is the best thing to do well the answer in mortgages is exactly the opposite of what happens with savings in mortgages again that together inflation and interest rates have risen a less than expected means fixed rates the rate you can get with a new fixed deal on a mortgage are likely to go down in the short term, where it will go in the long term is incredibly difficult. to say without a crystal ball, but I think yesterday we already saw some of the big mortgage lenders slightly reduce the cost of their new fixed rate deals, so if people find themselves in that imminent position, then certainly it will probably be cheaper to get a fixed rate today than this time. last week if they are going to come down to a much more significant level, we just don't know what the Bank of England said about interest rates, actually that's fine, we're not going to raise them, but we expect them to stay high for Still a while There will be a good time and it all depends on how the markets work and there are several other factors that influence that.

Read what's happening with interest rates. You really need to look at your own internal finances if you want a guarantee and you know. what you're doing and then fixing gives you a warranty and fixing for longer because you get a longer warranty and in fact longer term repairs are actually cheaper if you can afford not to take advantage of the markets and if you're really fighting for one of the advantages in the mortgage sector. Are there mortgage brokers who can give you personalized help in finding the best mortgage for you and try to give you the advice you need that is personalized and specific, whereas I can only speak in general terms because I am talking to millions of people, so which is a bit different so I would use a mortgage broker at the moment if you're struggling to get the deal you need, but in terms of interest rates not going up of course it's good for the savings in a way.

It's a bad thing because I'm saying lock in quickly in case rates go down for mortgage holders looking to fix it, it may well be a good thing, it all depends on where we go over the next few months to be honest Martin, thanks. Thank you very much for joining us. It's always great to get your feedback on important days like this. It's a pleasure to see you this morning.