UK Finance News

Research conducted by Newcastle Building Society, the biggest building society in the Nort East, has found that savers are risking getting lower returns on their investments by not utilising the financial information and support that is freely available to them on the market.

With the base rate at an all time low many savers have already had their fingers burnt with investments and savings and with the lack of trust in financial institutions it seems many people are stashing their cash outside of savings account, where the interest is minimal if at all.

Only twenty percent of those surveyed said that they would look for help when reviewing their investment options, with an equal number saying that they would now less likely to do so.

The same figure of 20% said they are more likely to save increased amounts of cash, outside of a savings account, over the next twelve months.

One in three said that the current economic climate makes it less likely that they would trust their savings providers’ opinions than before the credit crunch begun and a similar figure say they would steer clear of stocks and shares-based saving products.

But, with 30% of survey respondents also saying they are more likely to choose ISAs ahead of other products now that the ISA savings limits are increased, the Newcastle is highlighting the importance of savers using every available resource when making savings decisions to make sure they get the products which suit their individual needs.

Five key points for consideration by people unsure of how to make the most of their savings:

• Identify the term you wish to save over, and whether or not you require access to your money.
  • Decide on the level of risk – there are many capital guaranteed products which will protect an initial investment regardless of market movements.
  • Ensure you use your ISA allowance to benefit from saving tax free.
  • Decide on whether you require monthly or annual interest – often the interest rate can differ significantly.
  • Seek expert advice from your provider before taking out a savings/investment product

Steve Urwin, Senior Sales and Marketing Executive at Newcastle Building Society says:

“The financial marketplace is almost unrecognisable compared to little more than a year ago, so it’s no wonder that trust is a big issue for the consumer, and it’s something that all institutions are working hard to address.

With the base rate so low, savers may be tempted to think that they are better off holding onto their cash, rather than investing it in a building society or bank, but with the recent increase in tax free ISA allowance and a range of good products still available across the market despite the tough financial climate, doing so will see them miss out on getting the returns that they could otherwise secure.

It’s not all about the best rate, and savers should seek help from their provider to ensure they fully understand the terms and conditions of the account – in the current economic climate, for example, it may not be the best time to lock your money away for years with no access to it, and if you rely on the income from your savings, the level of risk on your return is going to be important.”