Discuss the factors that the two households, described in Table3, should consider when reviewing their savings and investments, in light of the changes to the economic context described in the news extract provided.

	Demographic characteristics	Financial characteristics
Household1	Retired single person aged 75	For income, relies on state pension and interest from 10,000 in savings accounts. Owns house outright.
Household2	Working couple in their 40s, one child	Both adults work full time in jobs that pay the minimum wage. Neither is saving for retirement, and they have 200 in joint savings. Renting a two bedroom flat.

Extract: What does the Bank of England interest rate rise mean for you?

The Bank of England has raised interest rates, for a 10th consecutive time by 0.5 percentage points to 4%. What does this mean for your finances?

How will it affect mortgage payments?

Thursday's move is yet more bad news for the approximately 2.2 million people on a variable rate mortgage, who are also grappling with higher fuel and energy bills. Many now face paying hundreds of pounds extra a year.

About half of those 2.2 million are either on a base rate tracker or discounted-rate deal. The other half are paying their lender's standard variable rate (SVR).

A tracker directly follows the base rate, so your payments will almost certainly soon reflect the full rise. On a tracker now at 4.5%, the interest rate would rise to 5%, adding 41 a month to a 150,000 repayment mortgage with 20 years remaining. The monthly payment on such a mortgage would rise from 949 to 990.

...

SVRs change at the lender's discretion and most will go up, though not necessarily by the full 0.5 points. Some lenders may take some time to announce their plans. The average SVR rate is 6.84%, according to Moneyfacts.

However, about 6.3m UK mortgages (three-quarters of the total) are fixed-rate loans. These borrowers are insulated until their deals expire - but for many that will be soon, with 52,000 due to expire in February and March.

...

What about credit cards and loans?

Other types of borrowing, be it a credit card, personal loan or dipping into your overdraft at the end of the month, have also become more expensive just as soaring living costs are forcing growing numbers of Britons to rely on credit.

Credit card rates are variable but not typically explicitly linked to the base rate. The average interest rate on credit cards dropped slightly to 19.24% in November however that is off what is thought to have been a record high of 19.31% in October, according to official figures. The effective rate on interest-charging overdrafts in November increased by 0.2 percentage points, to 20.93%.

Personal loan rates for new applicants have also been going up. The average rate on new personal loans to individuals increased to 7.87% in November, the highest level since the end of 2017, according to Bank of England data. However, most unsecured personal loans have fixed rates, so if you already have one, your monthly payment will not change.

It's more good news for savers, though, isn't it?

After a long period when interest rates on savings accounts were terrible the picture for savers has started to improve. For example, a year ago the average rate on an easy access account was 0.21%, today that is 1.73%, according to Moneyfacts. The rates on cash Isas have also improved considerably.

"Challenger banks and building societies continue to take the most prominent positions in the top rate tables, so savers who fail to review their existing account to the latest top rates may miss out," said the Moneyfacts finance expert, Rachel Springall. "Loyalty does not always pay and the majority of the biggest high street banks have failed to pass every Bank of England base rate rise to easy access accounts."