E-WallStreet.com
  • Home
  • Stock Market News
  • Forex News
  • Economy News
  • Cryptocurrency News
  • Business News
  • Analysis
No Result
View All Result
  • Home
  • Stock Market News
  • Forex News
  • Economy News
  • Cryptocurrency News
  • Business News
  • Analysis
No Result
View All Result
E-WallStreet.com
No Result
View All Result

Banks don’t need our money anymore! What does this mean for savings accounts?

January 14, 2022
in Stock Market News
Reading Time: 7 mins read
A A
HSBC bank customer? Don’t get caught out by this app change!
ShareShareShareShareShare
Banks don’t need our money anymore! What does this mean for savings accounts?
Image source: Getty Images

Share this page:


New data from the Bank of England suggests that troubling times are ahead for both savers and buyers in the UK. This could have a knock-on effect on those who have savings accounts with the Bank of England, and it may be some time before the current credit conditions start to settle.

In a recent press release from Hargreaves Lansdown, senior personal finance analyst Sarah Coles shared her views on how the implications of Bank of England credit conditions survey could affect both savers and buyers in the UK. Here’s everything you need to know.

The UK’s current credit conditions

The Bank of England’s Q4 credit conditions survey has revealed troubling times ahead for our savings. The demand for mortgages has fallen and is expected to continue falling for the first few months of 2022. As a result, banks are lending less money to prospective buyers.

The fall in demand for mortgages is mainly due to rising inflation, which has made it difficult for people to afford a new home. There is also currently a shortage of spacious housing in the UK, which has put the brakes on purchases for larger families.

However, there has been a significant increase in credit card lending in the last three months of 2021. This comes in response to the financial squeeze, which is making it tough for Brits to make ends meet or top-up their savings accounts. Luckily, banks are prepared to lend and are expected to continue to accommodate increased lending until March 2022.

What does this mean for savings?

According to Sarah Coles, UK banks “don’t need our money” anymore! This is mainly due to falling mortgage rates, which aren’t expected to slow until UK house prices start to drop. A shortage in the demand for mortgages means that banks do not need the money to fund this type of lending. As well as this, banks have no need to attract savers with high-interest rates.

As a result, high street banks are in no hurry to increase the interest rates of their savings accounts. In fact, interest rates are at all-time lows and may not rise for a while. This means that savers who want better rates may need to switch accounts and shop around.

An increasing number of people are looking at online alternatives to the high street giants. These newer banks often come with higher interest savings accounts that could be hugely beneficial for your savings. If you’re looking for a new way to build your nest egg, take a look at our top-rated savings accounts. 

What does this mean for borrowers?

While mortgage lending may have fallen according to the Q4 report, credit lending is up in the UK. The rising demand for credit cards is set to continue in 2022. Inflation is currently at 5.1%, and prices of petrol and energy are increasing. This is putting a huge strain on UK households and increasing the need for credit card loans.

At the moment, banks are willing to lend and interest-free credit periods have been extended. However, credit card borrowers could face major problems in the future. If interest rates rise, customers could struggle to keep up with repayments.

Sarah Coles explains that the best way to deal with the financial squeeze is to set a tight budget and avoid borrowing large amounts on a credit card. This will prevent you from falling into large amounts of debt in the future. She also recommends making the most of 0% interest periods by paying off any existing debt before interest is due.

Was this article helpful?

YesNo

About the author

Avatar for Ruby Layram

Ruby Layram

Ruby is a freelance writer who enjoys writing about all things personal finance. After embarking on her own side hustle journey three years ago, Ruby is passionate about helping others to learn about the ins and outs of persona… Read More


Share this page:


Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.


necessaryCookies: [ 'wordpress*','CookieControl','PHPSESSID','wordpress_test_cookie','fivc','fivs','fip','Ookie','Fool_subinfo','_gads','_gid','_gat','_ga','_utma' ],

optionalCookies: [ { name: 'Sharing', label: 'I would like content tailored to my personal preferences.', description: 'We work with advertising partners to show you ads of products and services you may be interested in. You can choose whether or not to have ads delivered in a personalised way by setting this option. You can return to review this setting at any time by clicking the "C" logo in the bottom left corner of any page.', cookies: [ '_ga', '_gid', '_gat', '__utma', '_gads', 'A3' ], onAccept: function () { // Yahoo Pixel (function(w,d,t,r,u){w[u]=w[u]||[];w[u].push({'projectId':'10000','properties':{'pixelId':'10170369','userEmail': ''}});var s=d.createElement(t);s.src=r;s.async=true;s.onload=s.onreadystatechange=function(){var y,rs=this.readyState,c=w[u];if(rs&&rs!="complete"&&rs!="loaded"){return}try{y=YAHOO.ywa.I13N.fireBeacon;w[u]=[];w[u].push=function(p){y([p])};y(c)}catch(e){}};var scr=d.getElementsByTagName(t)[0],par=scr.parentNode;par.insertBefore(s,scr)})(window,document,"script","https://s.yimg.com/wi/ytc.js","dotq");

// Add Facebook Pixel !function(f,b,e,v,n,t,s) {if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)}; if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)}(window,document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('init', '901682110316659'); fbq('track', 'PageView'); fbq('consent', 'grant'); // End Facebook Pixel

}, onRevoke: function () { fbq('consent', 'revoke'); }, recommendedState: 'on', lawfulBasis: 'consent', }, ],

statement: { description: '', name: '', url: 'https://www.fool.co.uk/help/privacy-and-cookie-statement/', updated: '' },

}; CookieControl.load(config);
Credit: Source link

ShareTweetSendPinShare
Previous Post

Cosmos Price Prediction – Will ATOM Price Hit $80 Soon?

Next Post

Downing Street apologises to Queen for lockdown parties

Recommended For You

4 reasons why I would – and wouldn’t – buy Tesco shares for June

May 23, 2022
4 reasons why I would – and wouldn’t – buy Tesco shares for June

Image source: Getty Images The Tesco (LSE: TSCO) share price has shaken amid broader market volatility in recent days. Britain’s biggest retailer slipped to its cheapest since early...

Read more

3 Warren Buffett techniques to build my wealth

May 23, 2022
How I’d invest £5k using Warren Buffett’s rules

Image source: The Motley Fool Investor Warren Buffett is widely recognised for his successful approach to picking shares. I think that by applying some Buffett moves I can...

Read more

This cheap share fell 30% last week. I’d buy now

May 22, 2022
As the FTSE 100 drops 6.8% in a week, now is not the time to sell out

Image source: Getty Images 2022 has been a rough year for global stock markets so far. Pretty much every major market index is down steeply, with the notable...

Read more

These 7 shares produce passive income of 7% to 11% a year!

May 22, 2022
How I’d build passive income with just £150 a month

Image source: Getty Images. I’d like to have a larger income, but I’d rather not work hard to earn it. Hence, my favourite way of earning extra money...

Read more

6.6%+ dividend yields! 2 FTSE 100 dividend stocks to buy

May 22, 2022
This FTSE 100 stock has an unbelievable 50%+ dividend yield. Would I buy it?

Image source: Getty Images. Trying to get a positive real return from dividend stocks is extremely difficult right now. Inflation is rising at breakneck pace, and on the...

Read more
Next Post
Downing Street apologises to Queen for lockdown parties

Downing Street apologises to Queen for lockdown parties

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Related News

Does the ARB share price make it a top tech buy in 2022?

How I’d invest £10,000 in my Stocks & Shares ISA right now

May 17, 2022
Outlooks for EU growth and inflation worsen as energy crisis hits

Outlooks for EU growth and inflation worsen as energy crisis hits

May 16, 2022
What I’m buying for my Stocks & Shares ISA in 2022

As stock markets crash, I’d buy these 4 FTSE 100 fallers!

May 19, 2022
SA40 Index Price Forecast Ahead of the SARB Rate Decision

SA40 Index Price Forecast Ahead of the SARB Rate Decision

May 18, 2022
Sketches of my life in Kyiv: the roar of missiles and a painful farewell

Sketches of my life in Kyiv: the roar of missiles and a painful farewell

May 20, 2022
E-WallStreet.com

e-wallstreet.com is an online news portal that aims to provide the Stock Market News, Forex News, Economy News, Cryptocurrency News, Business News, Analysis and much more stuff like that around the world.

What’s New Here!

  • 4 reasons why I would – and wouldn’t – buy Tesco shares for June
  • Joe Biden pledges to defend Taiwan militarily if China were to invade
  • NZ Authorities Investigate Crypto Ponzi Scheme
  • 3 Warren Buffett techniques to build my wealth

Subscribe Now

Loading
  • Contact Us
  • Privacy Policy
  • Terms of Use
  • DMCA

© 2021 - e-wallstreet.com - All rights reserved!

No Result
View All Result
  • Home
  • Stock Market News
  • Forex News
  • Economy News
  • Cryptocurrency News
  • Business News
  • Analysis

© 2021 - e-wallstreet.com - All rights reserved!