New research shows that nearly half of Welsh adults who pay rent or a mortgage say they struggle to keep up with payments. The Bank of England has set out plans that could see interest rates held at their historic low of just 0.5 percent until 2016.
The Governor of the Bank of England has set out plans that could see interest rates held at their historic low of just 0.5 percent until 2016.
The move comes as new research shows that nearly half of Welsh adults who pay rent or mortgages sometimes struggle to keep up payments.
The UK goverment is hoping the change will give it greater opportunity to plan for the future - but there will be a sting in the tail for older people who rely on their savings and interest to make ends meet.
The older people's charity Age Cymru said older people "have been hit particularly hard" by historically low interest rates since 2009, which, combined with rising prices, "can represent a real challenge to many older people's standards of living."
The charity was reacting to to the announcement from Bank of England Governor Mark Carney that interest rates will remain at their historic low of 0.5 percent until unemployment falls below 7 percent.
It said "attention must be given" to the impact of low interest rates on people with low incomes.
Many older people rely on interest from often modest savings to supplement their pension income. These people’s incomes have been hit particularly hard by the historically low interest rates the UK has had since 2009. In addition, the UK Government’s policy of ‘quantitative easing’ has also been reducing the income many receive from occupational pensions.
The combination of rising prices on essentials such as food and fuel, and low interest rates on savings, can represent a real challenge to many older people’s standards of living.
Whilst low interest rates might be good for the economy as a whole, attention must be given to unforeseen consequences on particular groups of people on low incomes. Unfortunately, the experiences of this group of older people will be doing nothing to encourage increased levels of saving for older age.
– Graeme Francis, Head of Policy and Public Affairs for Age Cymru
The Director of Shelter Cymru cites benefit changes as the likely reason why tenants in council and social housing are particularly affected. 11% said they had taken out payday loans to help meet living expenses.
These figures paint a very worrying picture. It's clear that many people are only just holding things together financially - just one piece of bad luck such as losing their job or being unable to work could be enough to tip them over the edge into serious difficulties.
– John Puzey, Director of Shelter Cymru
The Citizens Advice service in Wales reports a 555% increase in issues linked to pay day loans in the first quarter of this year.
This gives a very clear impression of a lot of people who are running out of options to keep their heads above water.
New research by Shelter Cymru and Citizen's Advice Cymru reveals that 'alarming' numbers of Welsh people are struggling to cope financially. 48% say that they sometimes struggle to keep up with rent or mortgage payments. 12% say they struggle constantly.
For those who are currently in employment, one in six said they would not be able to keep up with payments if they lost their job because they don't have a financial safety net, such as insurance or savings.