Only time will tell however a small and steady rise won’t hurt funds but a steep increase may. Depending on your attitude to risk if looking at long term investments of 10 years or more, much will stay the same.
Long term we can see a benefit for the saver. Savers should enjoy some relief if the Bank of England’s Monetary Policy Committee does increase base rates by 0.25 per cent to 0.50 per cent tomorrow, in what will be the first hike in a decade.
This is likely to trigger a savings war, as banks and building societies respond by increasing their own rates in return.
However, Anna Bowes, director of independent savings advice website Savings Champion, said “with the consumer price index now at 3 per cent savers still cannot secure an inflation-beating return.”
Those with mortgages have had it good for 10 years or so. Can they really complain now?
Start thinking about preparing for any big events as soon as you can
None of us know exactly what life’s got in store for us, but we know that there are a handful of major events that we’re quite likely to encounter at some stage. These include some of the great milestones of life, such as buying a property, getting married, starting a family, buying a holiday home or planning for retirement.
It’s essential to start thinking about preparing for any big events as soon as you can. Often this means saving for major expenses that may not yet be in sight but which we know are awaiting us just over the horizon.
7 simple steps to guide you and keep your nerve when the markets start to give you the jitters
1. Remember what you invested for initially.
The biggest reason to invest is to get a better return than you would get from leaving your money in the building society or worse still spend it!
You most likely also invested for the long term. Over the last 20 years the FTSE All-Share index rose by 361% or 7.94% a year. But here’s the really interesting part. If you lost your nerve and pulled out and only missed the best 20 days, your gain would only be 60.8% or 2.4% a year.
Although this is past performance and cannot be relied on to predict the future, it is an indication of what the stock markets can do.