Nearly half of Brits were not aware of potential interest rate hikes and may be unprepared for the impact it will have on their finances.
That’s according to CYBG’s digital banking service B, which found 47% of Britons were unaware of a possible increase in the Bank of England base rate and 57% did not understand how the rise would affect their financial situation.
Meanwhile, the research also found, two fifths of homeowners were concerned about their ability to meet higher mortgage repayments.
And a fifth said a hike by the Bank of England would make it harder, or nearly impossible, to afford higher repayments for borrowers.
Indeed, of those already on the property ladder 27% said an interest rate rise would make it impossible or very hard to upsize. When it came to first-time buyers, 18% said it would make it very difficult to buy their first home.
Helen Page, innovation director at B, said: “This research highlights the lack of awareness consumers have about what a possible interest rate rise means for them across all aspects of borrowing.”
She added: “We’ve seen a 50% year-on-year rise in customers wanting a five-year fixed-rate mortgage.
“Clearly people are finding longer-term fixed-rate mortgages increasingly appealing as there is security in knowing a rate rise won’t affect you.
“That said, nearly three quarters of the consumers we surveyed aren’t preparing for a potential interest rate rise across all debt next month so some parts of the population are switched off to what a rate rise could do to their monthly budget.”
The advice to consumers from B was to prioritise getting financially fit by getting a full picture of how to manage finances whatever the outcome of the next announcement from the Bank of England.
