Fixed income investment strategies can tackle changing interest rates

Mortgages & Money

With the Bank of England finally changing interest rates and with over half of the UK getting the current base rate wrong, could a fixed income investment strategy go a long way to better educating savers on how to grow their funds and ease public anxiety about their future finances?

After interest rates were recently raised from record lows of 0.25% to 0.5%, an expert within the Bank of England claims that rates are set to be rise again sooner rather than later.

Cue panic and anxiety from people who have never seen a rate rise in their adult lives. For many who have personal loans and were able to get a mortgage during the period when interest rates were at their lowest, the rise in rates will likely hit them hard in the pocket. Can a fixed income investment opportunity help?

Navigate a rise in interest with fixed income investment strategies

A recent survey conducted by Moneysupermarket has discovered exactly how ill-informed people are when it comes to the rise in interest rates and what it means for their personal finances.

The survey, which highlights differences in generational attitudes between adults and teens on their knowledge of interest, as well as breaking their findings into gendered and regional information, makes for interesting reading. Amongst the most worrying findings though is that 50% of adults didn’t know how their monthly mortgage payments would be affected if interest hit 1%.

Perhaps unsurprisingly; many adults who have recently acquired a mortgage may likely have still been in school the last time there was a proper rise in interest rates. At the same time, 51% of men and 59% of women incorrectly identified the meaning of ‘interest rate’, while 74% of respondents in London got the current base rate wrong.

Clearly, there’s still a lot more education needed to help people understand what the impact of rising interest rates will have on their personal finances. For those that are worried about the effects a rise might have, partnering with an experienced consultancy and putting some of their savings into fixed income investment strategies could help ease the financial burden.

The beauty of making a fixed income investment is that you are going into the investment, knowing how long the investment is for and exactly what your fixed income rate of return is going to be. There is a lot to be said for someone seeking certainty with such investment technique.

Improving personal finances with a fixed income investment

The rise in interest rates has also come at a time when wages in the UK aren’t rising in accordance with the rate of inflation, according to the Office for National Statistics, and older savers worry that they won’t have enough in their pension plans to retire in comfort.

A fixed income investment could potentially go a long way to improving savings and introducing investors to new financial opportunities that are better suited for their lifestyle and supplement their other forms of income.

Working on a bespoke fixed investment strategy with an experienced partner can not only help people grow their finances in potentially unique, secure, diverse ways for their needs. The right advisor will also work alongside them in the long-term to improve their knowledge of the investment market, expand their interests and build meaningful relationships that will work to improve investors’ finances.

FJP Investments is an experienced consultancy, working to help improve investor knowledge on the benefits of a fixed income investment and how they can potentially improve their finances with the right bespoke strategy.