Hundreds of Basset & Gold Investors have benefitted from our Interest Shield
Independent research ⁽¹⁾ commissioned by Basset & Gold at the start of this year revealed that, following the base rate increase in November 2017, just 21% of savings accounts passed on the full rate rise, and just over half increased rates at all in response to the announcement.
Commentators, including Nicky Morgan, chairwoman of theTreasury Select Committee of MPs, have reinforced this conclusion, criticising in August this year the sector and suggesting that many large banks and building societies are failing to pass on the increase to savers, whilst quickly applying the increase to borrowers.
The Basset & Gold Interest Shield feature ensures that our selected bonds track interest rate increases from the Bank of England. The Interest Shield also means that decreases in the Bank of England rates are not carried through to our investments, with returns being pegged to the ‘High Water Mark’.
In August 2018, the Bank of England implemented an interest rate increase of 0.25%. This meant that investors who invested in a qualifying Basset & Gold Interest Shield bond before the end of July 2018 benefited from the corresponding 0.25% increase in their fixed returns as well.
Since the Interest Shield was introduced in March 2018, approximately 650 new investors have benefitted from the feature, with their rates of return rising in line with the Bank of England's base rate. These investments include our 3- and5-Year Fixed Monthly Income Bonds, our 5-Year Compounding High-Yield Bond, our Pensioner Bonds and our IFISA Bonds.
This means that a typical customer, upon investing an average amount of £12,000 in a qualified Basset & Gold bond or IFISA Bond before the end of July 2018, would experience an additional yield over 12 months of £30.
At the time of publishing (Oct 2018), since the base rate increase, in excess of 300 investors have sought to obtain an Interest Shield product in anticipation of any further rate increase in the coming months.
Whilst it may be difficult to anticipate the timelines of the next change in the Bank of England's interest rate, the as yet unresolved Brexit negotiations and increase in wage growth appears not to be lifting any near-term uncertainty. Investors are seeking to ensure good rates of return and ‘High Water Mark’ features where possible.
(1.) Basset & Gold commissioned Andrew Hagger of MoneyComms to conduct research into the cash savings market. The research was conducted on 2nd and 3rd January, 2018.