No help for nation’s savers from any quarter

Business banking news review: week ending 25 Apr 2013

If you’re trying to grow your savings pot at the moment, expect no help from any quarter – both the Bank of England and High Street banks are not listening.

It’s more or less common knowledge that when the Bank of England launched its Funding for Lending scheme back in August of 2012, the result was that the interest rates on savings products in the UK fell through the floor. The initiative, which was supposed to bring low-cost home loans and business loans to those in need, provided cut-rate wholesale funding to banks – leaving high street lenders no longer needing to drive savings deposits by promising high rates of return.

Well, bad news for savers: the scheme is set to be extended to at least February of 2015. This means of course that the ‘successful’ initiative will further ravage the interest rates offered on savings accounts for nearly two more years all in the name of ‘stimulating economic growth,’ and damn the consequences – who cares if you’re trying to save up for a deposit on a new home or to provide yourself retirement income?

Well, it’s not just the Bank of England that’s abandoning savers, as there was more news made this week when high street giant Barclays announced it will no longer be providing safe deposit boxes to its customers. Safeguarding highly valuable goods such as jewellery – an excellent investment and perhaps the only real recourse left to anyone trying to provide some savings for their future – i no longer cost-effective, Barclays says, and has plans to completely phase out the service by Christmas of this year.

Barclays isn’t the only high street establishment to abandon safety deposit box customers. Lloyds TSB, NatWest, and HSBC have also decided to withdraw their deposit box offerings, though most have decided to not completely eradicate the service but instead simply stop offering it to new customers.

This is a shame, if you ask me – safe deposit boxes are a piece of banking tradition, and I for one will be saddened to see them go. I don’t know what all these banks expect us to do with our valuables now that we won’t be able to use their services – are we expected to begin stuffing our mattresses with spare cash and precious gems, or should we just go down to the local pawnbroker and relieve ourselves of our pocket watches, brooches, and other family heirlooms?

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