Pensioners are facing a fresh financial body blow – with hard-earned nest eggs hammered and savings rates heading south.
Thousands of retirees, many of whom spent a lifetime building up their pensions, now stand to lose out yet again as panic on the financial markets slashes the value of retirement pots and drags down interest on vital savings accounts.
People have reported eye-watering losses for their pension pots in recent days as result of stock market falls triggered by the introduction of sweeping new tariffs. But it’s not just investments in stocks and shares under threat.
Cash Isas – the bedrock of many older savers’ financial security – are now in the firing line, with experts warning that interest rates could plummet in the coming months as the Bank of England scrambles to respond to the market meltdown.
One dismayed pensioner told the Telegraph: “It’s like watching your life savings dissolve overnight, I just wanted peace of mind. Instead I’ve got sleepless nights.”
The panic began when global markets reacted to US President Donald Trump’s latest volley in his trade war, prompting fears of a recession and a series of emergency Bank Rate cuts here in the UK.
Before the tariffs, analysts predicted two Bank of England rate cuts by the end of 2025. Now, there could be as many as four, dragging savings rates lower still.
James Blower, founder of the Savings Guru, warned: “We’re now heading for a sub-4 per cent Bank Rate by year-end. That means easy-access accounts and one-year fixes will likely fall well below 4pc – not good news for retirees who rely on cash interest to keep pace with inflation.”
He added the recent rash of competitive Isa offers was likely the “last hurrah”, as banks rush to lock in savers before trimming rates.
Many over-65s have traditionally steered clear of riskier investments, preferring the safety of cash – but even that is now under threat.
Dennis Reed, of older people’s group Silver Voices, said: “Our generation doesn’t trust the stock market – and with good reason. One crash and everything you’ve worked for is gone. With cash, at least you know where you stand – or used to.”
On top of the Trump-triggered changes, Chancellor Rachel Reeves has signalled she’s preparing a shake-up of the Isa regime – and that could mean curbs on how much you’re allowed to put into a cash Isa tax-free.
It comes despite a flood of money into these accounts. New figures from the Bank of England show savers poured a staggering £3.6 billion into cash Isas in February alone – the highest in five months.
But Sarah Coles, of Hargreaves Lansdown, warned that the days of generous savings returns are fading fast: “Five per cent rates are already vanishing, and the few that remain often come with hidden catches. As banks raise what they need, the rest of the offers will quietly drop off a cliff.”
