With UK banks offering some of the lowest interest rates in decades, those who have managed their money responsibly are being punished as their savings decline in value. The average AER of an instant access savings account is currently just 0.49%, while Bank of England governor Mervyn King has predicted that inflation will rise to around 5% in the coming months. Rates on individual savings accounts – also known as ISAs – are slightly better, yielding an average of 1.30% on a balance of £3000. Retirees and others who are dependent upon their savings for income must navigate the situation carefully or risk having their standard of living decline dramatically.
Unfortunately, it can be difficult to find the best ISA rates amongst the jungle of available options. Banks, which have an interest in promoting their own products, can’t be relied upon to give impartial advice. To add to the confusion, a whole host of non-traditional providers of financial services have emerged in recent years. With supermarkets and online-only banks offering seemingly endless places to stash your cash, the choices can seem overwhelming for busy individuals. In these difficult economic times, it is best to consult with an experienced finance company. While this may cost you money upfront, people with substantial balances could literally be saving themselves a fortune – not to mention a lot of worry and frustration.
Firstly, think about what your time is worth. Yes, it is possible to research ISA rates online; but considering the number of options out there, this involves a considerable time commitment. Worse still, securing some of the best rates requires adhering to numerous complicated conditions, most of which are hidden amongst the small print. Are you really going to read through potentially thousands of pages of text from multiple institutions? If so, bear in mind that even a shrewd investor can easily miss details which could dramatically impact the rate at which their savings grow. For example, does the interest compound annually or quarterly? Is the bank offering what’s known in the business as a teaser rate, which will automatically be reduced to a less attractive return after a set period of time?
Whether you’re a working person or a retired person, you have undoubtedly worked very hard for many hours to accumulate your nest egg. Your money should now be working hard for you – not the other way around. Solid ISA rates are out there, but finding them shouldn’t become a full-time job. When it comes to making complicated decisions which will have a major impact on your financial security, seeking expert advice is an investment which will pay dividends for years to come.
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