There is little doubt that low interest rates have helped keep the UK economy ticking along since the 2008 financial crisis. But savers have paid a heavy price.
Savings rates have been decimated – even more so since the Bank of England cut the base rate in August to 0.25 per cent. Indeed, if deputy governor Dame Nemat Shafik is to be believed, a further base rate reduction could come as early as next month if evidence emerges of a significant downturn in economic activity triggered by the Brexit vote. If so, savings rates will take another pummelling, bringing negative rates a step further (perish the thought).
Yet it is not just cash savers that are being beaten up by low interest rates and the nervous financial times we now live in. Next on the list to be given a proverbial kicking could be the millions of savers who have their retirement fortunes tied up in work-based defined…