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New Year holds even tougher choices for expat investors
| Published: | 7 Jan at 6 PM |
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With base rates showing no chance of rising in the predictable future and the choice of offshore fixed rate deals dwindling further, it’s going to be a tough year for expat investors.
The question, as always after the turn of the old years since 2008, is whether to opt for an unsatisfactory fixed rate deal or leave money in a variable rate account easily accessed should the base rate amaze everyone by rising. In 2014, the choice is even tougher, as there’s no indication of any movement in the base rate and up until now banks haven’t needed to attract depositors due the government’s Funding for Lending Scheme.
Now that bank borrowing for mortgage lending isn’t as easy, your friendly high-street bank manager will have been told to encourage savers, implying that increases in interest rates are the only way to go. However, at present there’s a lack of any real competition for savers’ cash, implying that rates are very unlikely to increase.
Last year, the trend for onshore banks to close their international offshore subsidiaries became an undignified rush, leaving expat savers few options and hardly any time to close their accounts and transfer elsewhere. Experts predict at least one more closure during 2014.
Director of SavingsChampion UK, Anna Bowes, admits that 2014 is going to be the worst year on record for savers, with little choice and none of the options exactly desirable. She is hoping that the Funding for Lending Scheme changes will at least drag an element of competition into the market, but doesn’t expect a swathe of rate increases.
Bowes feels a faint expectation that the BOE may increase its base rate, but also admits that it’s pure speculation as no-one really knows. She adds that much of that expectation might have already been taken into consideration by the remaining offshore banks.
The question, as always after the turn of the old years since 2008, is whether to opt for an unsatisfactory fixed rate deal or leave money in a variable rate account easily accessed should the base rate amaze everyone by rising. In 2014, the choice is even tougher, as there’s no indication of any movement in the base rate and up until now banks haven’t needed to attract depositors due the government’s Funding for Lending Scheme.
Now that bank borrowing for mortgage lending isn’t as easy, your friendly high-street bank manager will have been told to encourage savers, implying that increases in interest rates are the only way to go. However, at present there’s a lack of any real competition for savers’ cash, implying that rates are very unlikely to increase.
Last year, the trend for onshore banks to close their international offshore subsidiaries became an undignified rush, leaving expat savers few options and hardly any time to close their accounts and transfer elsewhere. Experts predict at least one more closure during 2014.
Director of SavingsChampion UK, Anna Bowes, admits that 2014 is going to be the worst year on record for savers, with little choice and none of the options exactly desirable. She is hoping that the Funding for Lending Scheme changes will at least drag an element of competition into the market, but doesn’t expect a swathe of rate increases.
Bowes feels a faint expectation that the BOE may increase its base rate, but also admits that it’s pure speculation as no-one really knows. She adds that much of that expectation might have already been taken into consideration by the remaining offshore banks.
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