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ll you need to know as personal finance expert has shared a simple rule of thumb to help people with money in the bank
Martin lewis issues urgent advice on savings and mortgages – need to know
- Personal finance expert Martin Lewis has issued urgent advice to customers of major banks including Lloyds, Nationwide, NatWest, Santander, Barclays, and HSBC UK as interest rates are set to rise.
- Bank of England Governor Andrew Bailey has warned that elevated energy prices will make it “harder” to keep interest rates at current levels. The Middle East conflict is adding pressure to energy costs, with households now hit with a 4% jump in the energy price cap.
- Inflation is expected to climb to 3.7% in the fourth quarter of this year and 4.2% by early 2027. Against this backdrop, Lewis outlined his simple rule for savers and mortgage holders.
- “If your mortgage rate is higher than the after-tax rate you can earn on savings, you’re generally better off overpaying the mortgage,” Lewis explained. “If your savings rate is higher than you’re paying on your mortgage, you’re generally better to save.”
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- First of all, always make sure there aren’t any penalties for overpaying your mortgage. Most people can overpay 10% a year without a problem.”
- • “Always keep an emergency fund – 3 to 6 months’ worth of bills aside before you overpay the mortgage,” he advised.
- Financial experts broadly forecast the central bank will raise rates this year to bring inflation back to the 2% target.
- Clare Lombardelli, a deputy governor at the Bank, said during a speech in Warsaw that energy price pressure could drive rate-setters to tighten fiscal policy unless there is particular weakness in the economy.
- READ THE FULL STORY: Martin Lewis issues ‘rule’ update for people with Lloyds, Nationwide, Santander savings
