Consumers Missing Out On Savings Accounts
In the continued period of financial strain, it is necessary for consumers to avoid placing unnecessary pressure on their pockets and purses.
Such is the claim of the Post Office when they recently released a survey showing that Britons seem to be missing out on billions of pounds by placing cash into savings schemes that under perform. And during this period of high food prices and inflation, in addition to reduced access to credit, it was claimed that it is more vital than ever to choose attractive deals. Findings from the firm showed that by placing money into accounts which offer interest rates lower than the Bank of England’s base rate, savers are missing out on about 8 billion pounds every year.
Overall, thirty per cent of people are clearly unaware as to the interest rate their savings account attracts, with a further 39 per cent reporting to be unaware if their supplier has changed interest rates on such financial products over current months. However, people living in the north-east were shown as having the least comprehension about the rate of interest they receive on their account. Here, some 37 per cent claimed were clueless as to what the amount of interest gained on their saving schemes was. On the other hand, just over a fifth (22 per cent) of people from the east Midlands were indicated as being unsure of the interest provided by their savings account provider.
On top of saving money inefficiently, it is quite plausible that consumers discover that their financial circumstances in later life isn’t as strong as they once thought it would be. This may mean they struggle to meet financial demands such as loan repayments, the cost of property repairs or bills more pricey than previously thought they would be when they’re older.
Richard Norman, director of savings at the Post Office, said: “It’s time savers started to take care of their savings by choosing a home for them wisely - especially in the current economic downturn. There are hundreds of poor-paying accounts, so people need to avoid them. If you don’t know what interest you are currently earning, contact your provider. If it is paying a low rate and you want it to earn more then move it. Even though it might be tough to put money away at the moment, it is more important than ever to make sure your existing savings work as hard as they have the ability to for you.”
He said that those people looking to open up a new account spend a tiny time checking the amount of interest they will generate on their savings and if they will be able to access their cash without being penalised.
For those people who seem to be worried about their capability to put money away for the future, taking out a debt consolidation loan could be suggested. By opting for this kind of loan it is possible that borrowers will be able to merge numerous constraints on their spending into one low cost monthly repayment. In turn this could leave them with an increase in disposable income, cash which could then be invested into a savings scheme.
In Might research by Birmingham Midshires revealed that 77 per cent of People saved some money over the last three months. The amount invested on average was shown to stand at 938 pounds, an increase from the 910 pounds recorded for the same period last year.