The Governor of the Bank of England has lowered base rates in the UK to the lowest ever amongst a range of measures designed to keep the economy in the UK on a stable footing whilst we negotiate our Brexit.  Whilst this is generally good news for those with mortgages it’s not great for savers that use cash deposits.

Consensus now is that interest rates will be lower for longer, they could potentially go even lower.  Those with cash deposits have already endured a protracted period of low interest rate returns on their savings.  Whether you are building your assets for retirement or using the interest to supplement your income in retirement these low returns could be impacting on your lifestyle.

 In this situation you need to consider your options.  It might help to divide your cash assets into three categories:

·        Emergency funds/short term money (less than 5 years)

·        Medium term money (5 to 10 years)

·        Long term money (10 plus years)

 The emergency funds/short term money should remain in cash deposits or similarly easily accessible products, perhaps N S & I?

 The rest of your assets – for the medium and long terms can be invested to suit your risk profile, objectives and tax position.

 Independent financial advice would be useful at this point.

 Steve Speed 15/08/2016