Resolved Question

Due to the prolonged period of low interest rates for depositors what happens to the country when savers money?

Runs out as they eat into their capital to live.It,s the wealthy older people with money invested that has kept this country going for years but many are now approaching financial hardship.Where are the banks going to get their money from in the future as most working class people can barely keep their heads above water let alone invest £1000's

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The money is still there, but as assets and income have dropped in value so has the disposable element. Less interest means less money is moving around in the market, but you could also argue that lower interest rates mean that banks don't have to pay out so much, and so are able to release more for loans, mortgages, etc. which puts money back into circulation and in turn stimulates the economy.

Also, as we are talking about interest rates earned on capital, rather than investments, the core cash will remain in place, and even though it may not be "earning" now, if is still secure.

Interest rates will rise in due course, and savers will find that they then begin to reap the rewards, whilst those who have taken out additional credit now will fund this through increased interest payments.

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