Analysis of Bank of England credit data shows that £1 trillion of the nation’s savings is sitting in accounts earning less than 2%; Rob Morgan discusss how savers can maximise their interest.

Rob Morgan, Chief Investment Analyst at Charles Stanley: “With average savings rates close to their highest level in 15 years, it’s more important than ever for savers to pay close attention to their cash. When interest rates were rock bottom there wasn’t much to be gained in shopping around, but today the best rates available are far higher than the worst.

“Unfortunately, UK savers are not making the most of the situation, causing them to miss out on a considerable savings boost. Ultimately, just as many do with their energy providers, savers need to vote with their feet and seek out competitive returns. Typically, traditional, high-street banks have failed to pass on recent interest rate rises to investors, so there’s now billions of pounds languishing in accounts paying paltry rates compared with what can be achieved elsewhere. Even when attractive options can be found, when a deal comes to an end it can often roll over into something far less rewarding if you do nothing, so it’s important to keep on top of things.

“Cash Savings platforms, such as the one available through Charles Stanley Direct, aim to help savers capitalise on the higher interest rate environment, both quickly and with the least hassle possible. Managing everything from one place, savers can access some of the most competitive interest rates on the market and move easily between offers and account types from different banks as rates change and needs evolve. This way savers are not left behind when a deal expires or rates change, helping them gain a consistently attractive rate.

What about investing as a longer-term alternative?

“While cash is an important part of financial plans it shouldn’t dominate them. That’s because in the longer term too much in cash doesn’t provide enough return to consistently beat inflation, especially after tax. If you have some money you don’t need to touch for at least five years, and are wondering how best to beat inflation during that time, think about investing it as it’s the far more effective way to grow wealth.

“You should only invest your money if you can afford to wait out any fall in its value, but in the longer term share markets have a much better record of outpacing inflation than cash. By housing your chosen investments in a Stocks and Shares ISA you can maximise your returns by sheltering them from tax. You don’t have to be a financial expert to invest as there are simple, packaged investments known as ‘funds’ that can match your objectives and how much risk you want to take with your money.”


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