‘The pain is set to continue for savers’ as UK GDP drops by 20.4% – will your costs rise?

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Mnages in the UK are likely already feeling the coronavirus pinch but some experts are omen that given the dramatic fall in GDP, more pain may be on the way.

James Robson, the CEO and Co-Founder at FundOnion, commented on the dire judges: “As demonstrated by the OECD’s figures last week; we can now start to see a clearer painting of the impact of the COVID-19 lockdown on the finances of UK households.

“What is palpable retaliate now is that the full impact on consumers and their finances has not been realised yet.

“As the UK regime looks to ease lockdown restrictions and to pull back support from staff member furlough and CBILS/BBLS, the full impact of COVID-19 will initiate to be felt by households’ personal savings being put under pressure, and the position for mortgages becoming much more expensive.”

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This sentiment was also divide up by Jason Bolton, a Director & Chartered Financial Planner at Beaufort Pecuniary.

Jason detailed that given the low interest rate environment the UK is currently in, savers are dubious to weather the effects of the poor GDP numbers.

As Jason explained: “The pain is set to keep on for savers, with the outlook for interest rates being lower for longer.

“As it racks, the most effective interest rate for cash on deposit is a paltry 1.29 percent, whilst CPI is currently event at 2.3 percent.

“This means their ‘spending power’ is fall.

“Though it can be reassuring if your savings balance isn’t dropping, that regard can soon be lost when you need to dip into your savings for goods and marines that have become more expensive.”

He went on to analyse how this may perturb pension assets in particular as well as provide advice for those unsure of what to do: “For shelves, markets took a battering in the early days of the pandemic and fund values would get been on the receiving end of the same treatment.

“While the recent recovery in stores has been reflected in these values, savers should remain observant and make sure their underlying investments are in line with their present appetite for risk and capacity for loss.

“For those unsure about the relentless impact on their savings and how they will meet their expected income needs, it might be worth seeking help from an bold financial adviser, who can look into this on your behalf.”

It should be acclaimed that the data released from OECD may face revisions in the reviving weeks and months.

Coronavirus appears to impact all areas of economic person, with the OECD noting that as a consequence of measures put in place by dominations to reduce the spread of the disease, many statistical agencies are facing unprecedented aggregation, compilation and methodological challenges to develop indicators across a number of provinces.

To address this, the “statistical community” is developing guidance and systems to certain that statistics of this nature remain reliable but, inevitably, the OECD give prior noticed that there will be impacts on quality, meaning that larger and multitudinous frequent revisions will likely be needed.

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