The Nationwide Building Society Has Raised Interest Rates – But Does It Compete With Inflation? | Personal finance | Finance
Currently, the country’s inflation rate is 10.1% and is expected to exceed 13% by the end of the year. Furthermore, analysis conducted by Citigroup estimates that it will continue to soar to 18.6% later next year. In response to this, Nationwide is one of many building societies that has raised interest rates to support people’s savings at this time.
Specifically, the construction company increased the rate of its one-year triple access online saver to 1.75% AER/gross per annum (variable) for 12 months.
On top of that, Nationwide has raised the interest rate on its one-year triple access online ISA on sale to 1.50% gross/tax-free per annum (variable) for 12 months.
While neither rate exceeds inflation, both save three withdrawals over a 12-month period and are available from September 1, 2022.
It should be noted that any subsequent cash withdrawals will see the interest rate revert to 0.25% for the remainder of the account term.
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Other Nationwide savings accounts that have seen their rates increase include:
- Loyalty Saver, Loyalty ISA and Loyalty Single Access ISA accounts increase from 0.35% to 1.60% gross/AER.
- The Flex Instant Saver goes from 0.50% to 1% AER
- Instant Access Accounts including Instant Access Saver, Instant ISA Saver and Cashbuilder will increase by up to 0.15% to 0.25, 0.30 or 0.35%.
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Tom Riley, director of banking and savings at the Nationwide Building Society, explained why the incision chose to boost people’s savings at a time of high inflation.
Mr Riley said: ‘We understand that it’s not easy for people to save at the moment with the rising cost of living, but having money set aside that you can use for expenses unforeseen events can bring real peace of mind.
“As a mutual, we are always keen to support savers and pay the best rates we can afford on a sustainable basis, which is why we are raising rates on all variable rate accounts, especially credit and debit accounts. regular, loyalty and children’s savers as well as our popular Triple Access accounts.
“These changes are the latest increases the company has made to its savings accounts in recent months.”
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Steven Cameron, director of pensions at Aegon, warned that the surge in the rate of inflation was causing interest rates on various savings products to “decline”.
Mr Cameron said: “Our research shows that many are already taking steps to cut costs by cutting day-to-day expenses and canceling unnecessary commitments.
“But worryingly, the research also points to declining savings rates. While this may be unavoidable, it could have long-term implications for financial resilience.
“And when it comes to your pension, reducing or stopping contributions could mean missing out on employer contributions and having thousands less funds to live on in retirement.”
The financial expert shared tips on how people can boost their savings and finances as inflation continues to rise.
He added: “There are a number of ways to get help with financial issues and it is important that individuals use them in order to boost their financial well-being.
“The government offers free advice through a number of online services such as MoneyHelper and financial service providers can also offer support and tools to help you with your financial worries. A financial adviser can provide more personalized advice.
“While support services cannot always solve a lack of ‘money’, they can improve people’s mindsets by giving them confidence that they are taking the best possible action in often very difficult circumstances. difficult.”