Three in ten (30 per cent) North West adults think they would be better off if interest rates rose by one percentage point or more within the next 18 months, compared to 28 per cent who think they would be worse off, according to research by the UK insolvency trade body R3.
The survey found that 32 per cent of adults in the North West think that their overall financial situation would remain unchanged by a rate rise. The number of people who think they would gain from an interest rate rise is unchanged from the same time last year (30 per cent) but the number who think they would lose out has risen slightly from 24 per cent.
Richard Wolff, North West Chair of R3 and Head of Corporate Recovery and Insolvency at law firm JMW in MediaCity, said: “An interest rate rise would create ‘winners’ and ‘losers’ in roughly equal measure. However, it would have much more of an effect on the losers than it would on the winners.
“The cost of added interest on a mortgage of hundreds of thousands of pounds is much greater than the benefit of increased interest on savings of tens of thousands of pounds.
“The slight increase in the proportion of people concerned about the impact of a rate rise could reflect the fact that debts have begun to rise again over the last year, following a lull caused by the recession. Access to credit has become easier recently but an interest rate rise would be a big test for British household finances.”
These findings are in line with the overall British public (31 per cent think they would be better off, 28 per cent think they would be worse off). Nationally, the over-65s are unsurprisingly the most likely to welcome a rate rise, likely from a perspective of being net savers: 50 per cent said it would make them better off and only 13 per cent expect to be made worse off. On the other hand, 39 per cent of those aged 45-54 said a rate rise would make them worse off (the highest proportion of any age group).
Richard Wolff added: “There is a very clear generational divide when it comes to the impact of interest rates. The prolonged period of record low interest rates has had a particularly big impact on older people, many of whom are reliant on savings for income. The likelihood of someone over 65 entering insolvency has increased since 2009, whereas it has fallen for all other age groups.”
