Interest rates were put on hold at half a percent by the Treasury Committee of the Bank of England last week. Concerns about the Brexit, Britain exiting the EU, impacting financial stability have apparently made inaction a safer move for the Government, rather than risking impacting the UK economy at a fragile time.

There are many arguments for and against the UK staying in the EU, but all opinions aside, one thing for certain is that the low interest rate environment is not good news for savers, and it isn’t set to get any better any time soon. Financial markets are now not expecting an interest rate rise until 2019.

Millions of savers were dealt a blow after National Savings & Investments announced that it would be shortly cutting the interest rates on many of its accounts. The rate on the investment account will fall from 0.75% to 0.45% with effect from July, while holders of the Direct Isa will see their rate drop from 1.25% to 1% in June. This is alongside other banks slashing rates on their accounts, which means that savers managing to secure rates of over 1% interest are the lucky ones!

NS&I has also slashed the number of premium bond prizes, thereby reducing people’s chances of winning. The premium bond prize fund rate - the proportion of the total amount invested paid out in prizes - is being cut from 1.35% to 1.25%. However, whilst the number of higher-value prizes has been reduced, the number of smaller ones increased.

For savers looking for a safe place to stash their savings over the long-term, the beacon of security, NS&I, has disappointed. Whilst it is still arguably one of the safest institutions, with traditional inflation as measured by the Retail Prices Index standing at 1.6% for the twelve months to the end of March, keeping your money ‘safe’ could mean that it is in fact losing real value on a daily basis.

The eventuality of interest rate rises is still a long way off and if you want your money to work for you, you will have to look beyond traditional deposit accounts. This will inevitably involve the acceptance of different risks. Our role as Independent Financial Advisers is to have those risks suitably rewarded over the medium term. We don’t target double digit returns every year but instead aim to treat your investment capital in exactly the same way as we treat our own, whilst adhering to your personal risk tolerances.