First, the good news. Savings rates are on the rise – hitting levels not seen since more than a decade ago. Yet, let’s not get too carried away. Once rampaging inflation is taken into account, savers have seldom had it so bad.
Last week, in response to inflation hitting a 41-year high at 11.1 per cent, I asked Rachel Springall, finance expert at data scrutineer Moneyfacts, to do some number crunching. Going back to the last time that the Bank of England base rate stood at three per cent (November 2008), I asked her to track four key rates and put them in a graph.
The rates were base rate, the average standard variable rate mortgage (SVR), inflation (as measured by the Consumer Prices Index) and the average rate on an easy access savings account.
The results are presented in the graph opposite and tell their own story. Not only are savers’ deposits being ravaged by inflation, undermining their real value – but savings rates are also being deliberately suppressed by banks keen to maximise their profits. The less the banks pass on in interest rates to savers as base rate rises, the more profit they make.
So, back in December 2008, Springall says the average easy access savings rate was 2.58 per cent and the average SVR mortgage rate was 5.68 per cent. Inflation was running at 4.5 per cent.
Today, the respective figures are 1.25 per cent (scandalous), 6.49 per cent (outrageous, although most home loans are now fixed) and 11.1 per cent. To use blunt financial language, savers are currently being screwed by the banks while seeing the real value of their savings savaged by inflation.
If you need any more evidence of this, may I urge you to read our review of investment fund JOHCM UK Equity Income. The managers of this fund have built big positions in the banks – especially Barclays and NatWest.
This is because they believe the businesses will generate higher profits as interest rates remain high, enabling them (the banks) to make money from the difference in interest they charge borrowers and give to savers.
For the record, NatWest is currently paying 0.5 per cent on Internet Saver while Barclays is paying 0.25 per cent on balances of up to £49,999 in Everyday Saver. An everyday savings scandal.
You could argue that rather than be a bank saver, you would be better off buying their shares as JOHCM UK Equity Income has done and reap a mix of capital and income return.
Risky, yes. But as they say: fortune favours the brave.
Dig deep for running hero Kevin
I’ve done some mad things in my past to raise money for worthy causes: most notably ten marathons in ten days (262 miles) for charity Brathay in 2012.
But this Herculean task, which involved running for a total of 46 hours around Windermere in the Lake District, pales into insignificance against what rugby league legend Kevin Sinfield has just done.
Yesterday, he rocked up at Old Trafford in Manchester – during the half-time interval of the men’s Rugby League World Cup final – after running more than 300 miles in seven days. He did it to raise money for a number of charities involved in supporting those living with motor neurone disease (only last week, former Top Gear presenter Sue Baker died from it).
If you fancy donating please visit website: https://donate. giveasyoulive.com/fundraising/ kevin-sinfield-ultra-7-in-7- challenge. Don’t forget to add gift aid. I sponsored Sinfield last week and have entered the Rob Burrow Leeds Marathon in May next year (Rob being a former team mate of Sinfield’s who is currently in the grip of the savage MND).
I’m a wuss compared to the mighty Sinfield, but I’m determined to do my little bit to help those involved in helping beat MND and caring for individuals living with the illness.
Amazon, wrong trousers and a VERY rude toy
Surprise: A wizard kit instead of an iPad
A massive thank you to those readers who contacted me in recent days to tell me their stories of Amazon woes.
This followed my article a week ago on Hampshire-based Mike Oliver who ordered two iPad Pros from the US tech giant and received instead a roll of chicken wire and some Felix cat food. Only after The Mail on Sunday got involved did Mike get the refunds he had long been battling for.
Paul Eden-Smith, from Nottingham, had a similar experience to Mike.
He ordered an iPad Pro and a keyboard from Amazon. While the keyboard arrived in a separate parcel, the other box contained two random children’s toys – a wizard in training outfit and a frisbee. He has spent the past couple of weeks communicating with Amazon infobots and by email – a process, he says, ‘worse than crawling over drawing pins and razor blades.’
Only in the last few days has Amazon finally accepted responsibility for the mis-shipment and agreed to refund him for the iPad Pro he never received.
‘Dealing with Amazon has been tortuous,’ says the 63-year-old. ‘You can’t speak to a human being while online conversations often end without rhyme or reason.’
Earlier this month, another reader ordered some Mammut walking trousers (UK size 8) from Amazon, only to be sent a 12 (US size 8). She returned them and reordered, only to receive yet another size 12.
Back to the post office she went, reordered for a third time – and yes, you guessed it, another size 12 arrived. She was given a refund for £145 and told to keep (dispose of) the trousers.
Another reader ordered an Apple iPhone and received a six-pack of Nivea deodorants – she is still battling for a refund because they want her to return the phone she never received.
But nothing quite beats the unexpected birthday gift that a 76-year-old wife received from her husband. Let’s put it this way, it wasn’t the Dyson hairdryer he had ordered, but the kind of raunchy sex toy that Gwyneth Paltrow likes to promote.
On Friday, the husband said he had got a full refund. As for the toy, it currently resides ‘in the back of a wardrobe as we don’t know what to do with it.’
There are more Amazon mishaps that I could report, but you get the gist.
I just trust that the five-figure job cuts the company is planning on making don’t impact on its already creaking customer service.
Quite a week on the trains
It has been quite a week on the trains. No strikes, but plenty of delays – what with fog to deal with (Monday) and rain to negotiate (most of the week).
Drowned rats came to mind on Tuesday as I waited patiently for the 6.27am train to arrive into Wokingham – drenched by a Berkshire monsoon.
At least I didn’t have rain leaking through the train roof as one commuter, much to her horror, experienced on her way up from Chichester to London.