Savers should be protected from falling interest rates, according to a new action group campaigning for fairer treatment and political recognition of the “silent majority”.
Save Our Savers, which claims to be the first affinity group working on behalf of savers, is calling for politicians to reverse Britain’s borrowing culture and introduce policy changes and incentives that encourage a long-term savings and investment culture in the UK.
The group believes savers have been “sucker-punched” by governments over the past 20 years; most recently this includes savers being hit by the dramatic fall in interest rates, but Save Our Savers also argues that pensions have been “persistently pole-axed by poor policymaking”.
“An election is round the corner, yet none of the main political parties are being vocal on their plans are to repair the damaged pension system,” says Rev. John Strain, spokesman for the grass-roots action group, which is privately funded by an unnamed individual.
He says it has three core aims: to ensure the fair treatment of savers, including protection from falling interest rates; to urge policymakers to “make good the terrible damage to occupational pensions schemes”; and put pressure on the government to acknowledge the true impact of inflation on people.
Referring to the last point, Strain says: “While it’s impossible to have a wholly objective measure of inflation, we want to draw attention to the penalties that pensioners and other people that depend on their savings are experiencing.”
However, he says the group will work for all savers in the UK, not just pensioners.
Research carried out by Save Our Savers shows that 72% of British adults believe those who save for their future are not supported or given a fair deal. Most agree that the government and policymakers are mainly to blame.
Since the Bank of England cut the base rate to just 0.5% early last year, savers have seen interest rates on savings accounts reduce to pitiful levels. Now that inflation is starting to rise, there are concerns the next year will be hard for anyone trying to save for the future.
Recently, Skipton Building Society said it would raise interest rates on some mortgages, so it could readdress the growing gap between returns on savings and the cost of borrowing. Despite Skipton and other financial institutions acknowledging the plight of savers – the “true victims of the credit crunch” – the outlook remains bleak.
Strain says the government must reassure savers that it will provide a meaningful level of shelter from future shocks.
While he recognises the importance of market forces, he adds: “There is no such thing as a completely free market, and there is always the possibility for policymakers to intervene. We’ve seen measures put in place to help struggling homeowners – so why not savers?”
Kevin Mountford, head of banking at moneysupermarket.com, welcomes the new savings action group.
"Prior to the economic downturn we were regularly reminded of the need to save for our future,” he adds. “Since then, however, the political focus has shifted with the government keen to find ways to get the tills ringing, and yet as credit tightens the only way this can truly happen is by consumers parting with their hard earned savings.
"Recovery from the economic crash will be driven by cash and not credit, and going forward we are going to need a cultural shift whereby we start to save for both the desirable things in life and for the long term future."