More investors are reviewing their savings products to seek better returns, survey shows

News - Savings

Written by Ray Clancy

Monday, 07 June 2010 08:24

Investors are reviewing their savings plans because they are looking for growth but with interest rates so low few expect to make an income, research shows.

Some 86% will review their savings while base rate remains at 0.5% as such low rates make it important for them to make sure their money is doing the most it can, according to the latest survey from Fair Investment Company. The figure is up 20% on the previous six months.

Some 78% are looking for higher returns compared with 53% six months ago. Fewer are looking to make any income with 22% now compared with 47% before. Just 5% say they are nervous of the current economic climate.

‘The Bank of England base rate has been 0.5% for 15 consecutive months now, while the average instant access savings account rate is just 0.73%, so it is no wonder that people are ready to review products that aren’t performing,’ said Fair Investment Company’s head of pensions and investments, George Ladds.

‘It is interesting that there has been a bit of a shift from income to growth. It could be to do with the fact that people are less nervous now and are therefore more prepared to move out of safer cash products to look at longer term investment growth plans than they were six months ago,’ he explained.

‘That is certainly backed up by our survey which found that six months ago, 12% of respondents said they were nervous of the current climate, now, the figure is just 5%,’ he added.

Ladds says that it is important to review all savings, whether in cash or in other investment products to make sure you are getting the most from your money. ‘Financial needs change over time, as do the performance of different types of savings, which is why it is important to review them regularly to make sure you are still getting the most out of your money,’ he added.