Six years of record low interest rates

Six years of record low interest rates

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Julia Grimes
Published: 04 Mar 2015 Updated: 03 May 2016

Tilney Bestinvest’s Managing Director Jason Hollands comments on the winners and losers after six years of record low interest rates and stresses the long term merits of ISAs focused on investment rather than cash.

“This week marks the sixth anniversary of the Bank of England cutting the UK base rate to an all-time low. The winners during this period have been borrowers, both at the personal and corporate level, as well as owners of assets such as shares and property which have benefited from a prolonged period of 'cheap money'. The losers however have been the nation's army of frugal savers who have endured the misery of derisory interest rates and negative real returns after the impact of inflation for a prolonged period on their cash deposits.

“Despite this however, HMRC data shows that the number of cash based ISAs has continued to vastly outnumber those invested in the markets; the former accounting for 78% of accounts subscribed in the 2013/2014 tax year – only one per cent lower than in the 2009/2010 tax year when record low interest rates were introduced.*

“While we all need some cash for a ‘rainy day’ or medium term savings, cash is a frankly dreadful place to park the majority of your hard earned money over the long term as its value will slowly be eroded by the acid of inflation. Changes introduced to ISAs last July now mean that ISA savers have complete flexibility to transfer between cash, stocks and shares and funds. While for some, investing in the markets carries too much risk to suit their circumstances, for those using ISAs with an eye to accumulating a long-term pot of wealth and who are able accept a greater degree of risk for potential reward, it might make sense to carefully consider whether they should gradually drip feed at least a small portion of their ISAs into investments over a period of time."


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The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested. Past performance is not a guide to future performance. This press release does not constitute personal advice. If you are in doubt as to the suitability of an investment please contact one of our advisers. Prevailing tax rates and reliefs are dependent on your individual circumstances and are subject to change.

About Tilney Bestinvest

Tilney Bestinvest is a leading investment and financial planning firm that builds on a heritage of more than 150 years. We look after more than £9 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.

We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.

We have won numerous awards including UK Wealth Manager of the Year, Low-cost SIPP Provider of the Year and Self-select ISA Provider of the Year 2013, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.

Headquartered in Mayfair, London, Tilney Bestinvest employs almost 400 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.

The Tilney Bestinvest Group of Companies comprises the firms Bestinvest (Brokers) Ltd (Reg. No. 2830297), Tilney Investment Management (Reg. No. 02010520), Bestinvest (Consultants) Ltd (Reg. No. 1550116) and HW Financial Services Ltd (Reg. No. 02030706) all of which are authorised and regulated by the Financial Conduct Authority. Registered office: 6 Chesterfield Gardens, Mayfair, W1J 5BQ.

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This release was previously published on Tilney Smith & Williamson prior to the launch of Evelyn Partners.