Over half of Brits hope to see base rate increase

When the Bank of England originally announced that the base interest rate in the UK was being dropped to an all time low of just 0.5 percent thirty months ago, there were many people who were ecstatic as a result of being able to save money on their outgoings and borrowing in what had become a very difficult financial and economic climate.

However, thirty months on the base rate is still at this record low and whilst the economic and financial climate is still difficult a rising number of people are now starting to hope that the base rate will soon start to increase again. Whilst many borrowers have indeed benefitted from the low base rate there are also many that have suffered, such as savers who have lost a fortune in interest on their savings and consumers who have seen inflation soar.

A recent survey has revealed that more than half of UK consumers are now hoping that the base interest rate in the UK will increase for one of a number of reasons. In total, 52 percent of consumers are hoping to see the base interest rate increase. Of these, 41 percent wanted the base rate to rise so that they would be able to get better returns on their savings, which have really suffered over recent year. A further 11 percent said that they would like to see the base rate rise in order to tackle soaring inflation.

One industry expert stated: “With the Bank of England Base Rate sitting at a record low for the past two and a half years it is clear that there have been winners and losers, with savers generally feeling the combined impact of low rates and high inflation. Some borrowers have benefited, particularly those mortgage borrowers with large deposits, or those who want to borrower larger amounts on personal loans.”

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Up to £1.6bn to be spent on Valentines day

British spenders are expected to splash out up to £1.6 billion on Valentines day gifts for loved ones, according to a recent survey.

Findings from PayPal revealed that the average spend per gift is thought to be £71.25 with those in a relationship spending £69.90.

Cristina Hoole, spokeswoman for PayPal, said: “It would seem that romance is far from dead as almost half of Brits will be splashing out a massive £1.6 billion on their loved ones this week.”

She added that as millions are expected to hit shops, up to one in five will choose to shop online for a gift to avoid the crowds.

Further findings from PayPal showed that up to a quarter of UK men are more likely to conduct their shopping online and 36 per cent of Brits in a relationship do not plan to give any presents.

Meanwhile, research from APACS, the UK’s payment association, revealed that credit card spending over the festive period totalled £32.2 billion.

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Parents should open bank accounts for children ‘as early as possible’

Providing children with bank accounts as early in life as possible will enable them to have a better understanding of money say independent financial advisors.

MDM Associates said that opening a bank account as early as possible parents can then talk children through statements and show them where interest has been added.

Older children could receive an account with a debit card said the company.

Lisanne Mealing, managing director of MDM Associates, said: “That then starts to give them the idea of some financial responsibility – you’re trusting them because they’ll have access to that account themselves.”

Providing monthly pocket money to children can also be a good way to teach children about budgeting, she added.

According to an article on the Times Online, a recent survey by NatWest suggests that 51 per cent of young people want more advice from parents about how to manage money.

Many respondents said they were frustrated by well-trodden cliches such as ‘money doesn’t grow on trees’.

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Youngsters have big ambitions

A generation of financially ambitious youngsters are heading into the world and they have grand plans for where they want to be in the coming years.

Research by Alliance & Leicester shows that around 24 per cent of today’s 16-21 year olds who currently work expect to be earning £40,000 within the next ten years.

That would mean they would be earning almost double the national average wage which currently sits at £23,244.

The ambition to earn more means that the majority of people in this age group (81 per cent) expect to have a mortgage and own a property by the time they reach 30.

A recent survey by National Savings & Investments labelled many British savers as fantasists but today’s 16-21-year-old working population has reason to feel confident.

Figures show that 26 per cent of people who chose to go straight into fulltime employment are now debt free and can begin thinking about saving up some money for their future plans.

“These days, young people have high financial and lifestyle aspirations and getting on the career ladder early can be the quickest way to achieve their goals for many,” said Helen Palmer from Alliance & Leicester.

“As a group they recognise the growing trends of graduate debt and, in contrast, the potential advantages of going straight into employment – especially climbing the first rung of the property ladder and earning substantial amounts of money.

“It is important for this group to maximize the potential of their hard earned cash and this isn’t about clever investment choices or making timely and strategic financial decisions – it’s about basic management of money in a current account,” she added.

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