Any respite for savers?

With low interest rates on the cards for some time to come, returns on cash deposit are likely to remain deeply unattractive, particularly given that the spending power of cash is being eroded at a faster rate than for some time. In reality savers are actually losing money by depositing funds in most if not all bank and building society accounts, as the net rate of interest paid is below CPI inflation. If you are going to keep substantial funds as cash, make sure you hunt around for the best rates offered by internet and telephone banks, or new accounts, which often offer incentives for a fixed period of time. Also make full use of any existing or new Cash ISA allowances (see more below). It is also worth bearing in mind that the FSCS compensation limits increased on 31^st December 2010 to £85,000 per person, per authorised Firm. (up from £50,000 per person, per authorised firm previously). For joint account holders, the limit is £170,000. The key point to remember is that this limit is per authorised firm not per account. Also watch for banks which are subsidiaries of others, or trade as a different entity – they may still come under the same authorised firm. If in doubt, check with the deposit taker.