Cash savers face more disappointment says wealth management firm Sanlam UK.
They highlight new research which predicts that interest rates are likely to stay at 0.5% until early 2015, following the Bank of England’s recent quarterly inflation report.
What’s more, those who opened a cash NISA, or an ISA this year, are being urged to check the rate of interest they are being paid. Some providers are already cutting the attractive rates offered on the launch of the new NISA.
Sanlam told IFA Magazine: “The list of problems does not stop there…the cost of the goods we buy is rising at a faster pace than the interest being paid on some cash based accounts. This means savings are slowly crumbling in value, without savers necessarily realising this is happening.
“It seems like the days when money could be placed into a savings account and savers could be assured they’d get a worthwhile return are long gone. In the current climate of low interest rates, cash savings need to be more carefully managed.
“There are alternative places to hold your money which take a cautious approach to stock market investing. For savers, it is all about putting good financial planning principles in place first, and then deciding the best place for their money, to suit their needs.”