Interest Rate Cuts: What They Mean for Savers, Investors, and Business Owners
The recent cut to the Bank of England’s base rate has been welcomed by property purchasers, with lower mortgage costs offering a degree of relief in a challenging market. However, for clients with significant savings or investment holdings and business owners the wider impact of lower rates is far more complex.
At Matheson Lawson Solicitors, we work closely with clients to provide legal advice on wealth structuring, succession planning, and asset protection. While we do not offer financial advice, we regularly collaborate with trusted financial planners to ensure our clients’ legal affairs support their broader financial goals.
Below, we set out the key implications of the interest rate cut and general trend and the steps you may wish to consider in response.
Lower Returns on Cash Savings
Savers continue to feel the squeeze. With rates falling, banks and building societies are offering increasingly modest returns on deposit accounts, often well below the rate of inflation. For individuals or business owners with large sums held in cash, this means savings may be losing real value over time.
Maintaining liquidity is of course important, particularly for business flexibility or personal security, but it’s worth reviewing whether those reserves are working as hard as they could be.
Why Now May Be the Time to Rebalance
Business owners and individuals with accumulated savings or investments may want to revisit their current portfolio and asset structure. A few important considerations include:
- Asset allocation: Is your current mix of cash, property, shares and/or other investments still appropriate in the current environment?
- Tax efficiency: Are you making use of available reliefs, allowances and legal structures to reduce unnecessary tax exposure?
- Succession and security: Do your existing arrangements meet your goals for future financial security or passing on wealth to the next generation?
We don’t provide investment advice, but we can introduce you to a trusted independent financial planner and work alongside them to ensure your legal structures and documents align with your strategy.
Legal Planning Opportunities
There may be estate planning advantages in a low-interest environment, particularly for business owners or those looking to transfer assets in a tax-efficient manner. These might include:
- Establishing or updating trusts
- Lifetime gifting strategies
- Business and property relief planning
- Reviewing Wills and Powers of Attorney to reflect new priorities
A coordinated legal and financial review is especially worthwhile following a rate change, particularly if your circumstances have recently evolved. Be that through retirement, business growth or a family event.
Long-Term Planning Matters
Interest rate changes are often treated as short-term news, but their effects can shape financial outcomes for years to come. A proactive approach combining professional financial advice with well-structured legal arrangements offers the best protection in a shifting economic climate.
How We Can Help
At Matheson Lawson, we advise clients on the legal aspects of wealth protection, business succession and estate planning. If you're concerned about the impact of the recent rate cut on your savings, investments, or business planning, we are happy to assist and make appropriate introductions where required.
While we don’t provide financial advice, we are able to refer you to an experienced independent financial planner and work alongside them to help ensure your legal affairs support your long-term goals.
Contact our Private Client Team
To arrange a confidential conversation, please call us on 0141 473 2280 or visit www.mathesonlawson.co.uk.