Given the current state of the economy, it would be fair to say that there isn’t a lot of people who are able to put money into a savings account on a regular basis. With the cost of living rising at a strong rate and many people struggling to pay their bills, it is only natural that a lot of folks are not able to put money into a savings account with any consistency. Of course, recent findings indicate that the level of interest and return people receive from their savings activity is low, and possibly not worth it. This is something to consider because if the returns of saving are not worth the effort, many people will just not bother.

A study by Moneyfacts indicates that 90% of easy access savings accounts actually pay interest at a level of less than 1%. This has been classed as a “fundamental flaw” in the savings market and you can see why many people decide that there will be better uses of their money. One of the biggest issues with the market is the cited lack of competition amongst the major banks in the industry. These banks are said to account for 70% of the entire savings market, which means that they have a stranglehold on the sector, which isn’t going to be of benefit to the individual or family looking to save money.

The Bank of England has made a number of comments in June of 2017 pointing out potential dangers that are linked to the said economic conditions. The BofE has pointed towards increasing levels of car finance and credit card debt as a sign that consumer borrowing is growing to a worrying level. It is these same levels that have created the situation where savers have received a poor level of return. The Bank of England has clearly had an impact on this with the base rate set by the BofE being set at a record breaking low level for a number of years.

The study found that 33% of the easy access savings accounts on the market weren’t even providing a rate that was the equivalent of the base rate of 0.25%, the current base rate. With this in mind, savers face a practically impossible task of finding a value for money and a strong return for their money. There have been a number of initiatives in recent years to encourage lending and minimise the base rate but while these have been helpful for some people and parties, they have had a negative impact on savers. This is one of the biggest issues of economics, work that is undertaken to provide benefits to one party will often be detrimental to another party. There is unlikely to be a solution that ensures everyone benefits when it comes to the difference between savers and borrowers.

With the Governor of the Bank of England stating that there is no likely increase in interest rates for the future, this is a situation that is unlikely to change. Given that there isn’t a great deal of competition between the banks, there is no incentive for them to break ranks and entice customers in. You’ll find that most people are looking for a quick and easy solution when it comes to savings and this is why most people will initially look towards their local bank for saving options. When it comes to banking and finance, many people find that they are loyal to the bank that has always provided them with services and when you have this sort of situation in place, there is no real incentive for people to shop around or for other banks to try and entice people in.

Of course, while this is a depressing state of affairs for people looking to save money, it is a situation that leads to people borrowing money. It should be noted though that there are a number of different loans options to consider with some of these loan options being more attractive than others. As an example, a guarantor loan is likely to be more affordable than many loans, particularly a payday loan.

As things stand, you can see why savers are concerned about the prospect of getting a great return for their cash.

Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sitting behind a laptop or researching a story, he will be found watching a gig or a game of football.