24 Nov 2024

Credit crunch - Five years on

We are now five years into the credit crunch and the following table shows how it has affected our personal finances.

Average rates across product ranges
Product	Aug-07	Aug-12
All Savings	4.12%	1.09%
ISAs	5.45%	2.41%
No notice	4.08%	1.09%
Notice	4.23%	1.61%
Mortgage 5 Yr fixed	6.06%	4.73%
Mortgage 3 Yr fixed	6.56%	5.02%
Mortgage 2 Yr fixed	6.64%	4.65%
Loans 1K	16.80%	22.00%
Loans 5K	9.10%	12.00%
Loans 10K	7.70%	8.10%
Authorised o/draft	13.11%	15.41%
Unauthorised o/draft	25.92%	19.45%
Credit card	16.50%	18.80%
Source: Moneyfacts.co.uk

Sylvia Waycot, spokesperson for Moneyfacts.co.uk, comments:
“The credit crunch may have officially started five years ago, but its pain is still as raw today as it ever was.
“Savers continue to be hurt by the enormous drop in savings rates and they have little hope of beating inflation let alone supplementing incomes or growing nest eggs. Increased talk of the Bank of England further reducing its base rate will only add to the air of despair.

“Mortgage borrowers will have benefited where savers dipped out. They will have seen the amount they pay each month go into free-fall over the last five years. However, the fall in house prices, stricter borrowing rules and a general reluctance from providers to lend mean that many may have struggled to find a new mortgage once a fixed rate deal ended resulting in a much narrower choice and therefore cost too.

“Personal borrowing and credit cards have actually become more expensive despite the fall in base rate. This is an extension of a lack of appetite for risk that kicked in at the start of the banking crisis when it became harder for anyone to get a credit card and personal loans became driven by credit rating rather than a generally offered rate.”

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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