Bank of England latest interest rates rise by a quarter point is an attempt to halt inflation on the long term. Finance and pensions experts see the financial wellbeing of Britons increasingly worrying and feel that employers are not doing enough to help their staff.
Lily Megson, Policy Director at My Pension Expert, said: โAnother day, another blow to Britainโs savers. Even as interest rates continue to rise, any potential benefit savers might have experienced but a few years ago will likely be bulldozed by inflation โ which has remained in double digits for almost a year.โ
โUnsurprisingly, millions of Britons are worried. According to My Pension Expertโs own research from earlier this year, 44% of over-55s currently in work feel the cost-of-living crisis has rendered retirement impossible โ a devastating figure, following their decades of hard work and diligent saving.
Support and tools needed
โIn these challenging times, it is critical that Britons are empowered to secure their long-term financial aspirations. And this can only be achieved if they have access to the necessary support. The Government, regulators and the wider financial services sector must take steps to ensure education resources and independent financial advice are readily available. Access to such tools will ensure people can make well-informed financial choices and help them to achieve the retirement they want โ and indeed deserve.โ
Chieu Cao, CEO of Mintago, said: โEven if todayโs interest rate decision does contribute to reducing inflation in the long-term, itโs unlikely that the financial stress that many Britons are grappling with will be going away any time soon. So, itโs more important than ever that people are equipped with the tools they need to navigate what continues to be an incredibly challenging economic climate.
Employers not doing enough to support staff with financial wellbeing
โThese tools must be provided by employers, many of whom are not doing enough to support their staff where financial wellbeing is concerned. Indeed, while the rising cost-of-living was the greatest source of stress for 62% of Britons, a staggering 64% of employers do not have initiatives in place that are designed to improve their staffโs financial wellbeing, according to Mintagoโs research.
โEmployers must take action and engage with their employees about the financial difficulties that they are facing. By providing more targeted financial wellbeing support โ such as educational resources, access to financial advisers or an interactive pension contribution dashboard โ that suits the unique needs of each employee, businesses can alleviate a great deal of the financial stress that people are facing, ensuring staff can stay on track for a secure financial future.โ
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Andy Mielczarek, Founder and CEO of SmartSave, a Chetwood Financial company, said: โTodayโs quarter-point rise from the Bank of England is another reminder that inflation isn’t coming down fast enough, and households across the UK are feeling the effects. According to ONS data, the prices of food and non-alcoholic drinks are rising at the quickest rate in over 45 years โ a factor which could lead to further hikes to the base rate this year.
Seek advice to ensure your savings interest is the best possible
โOne upside for rapid interest rate rises is that consumers and investors should get more interest on their savings. But interest rates for easy-access accounts have often not kept pace with hikes to the base rate, which means that people could be losing out on potential gains on the money held in traditional accounts. For those in a position to put aside a lump sum and allow that pot to grow, it’s vital that savers explore how different savings instruments can support their financial goals. In many cases, fixed-term, fixed-rate bonds can offer much higher interest, while many savers will benefit from looking beyond traditional high street banks.โ
You are not alone with lack of confidence in your personal finances.
