A costly lack of interest
Low interest rates are great news for borrowers but for savers, they can have a devastating effect. With inflation currently running far in excess of base rates, even though the value of your capital may be safe, you need to keep a close eye on the interest rates you are earning just to stop the buying power of that money being eroded.
Nowhere is this more apparent than with Cash ISAs. It is estimated that over 80% of Cash ISA holders are earning less than 0.5% a year on their savings.
Considering the possibilities
It is good practice to retain some cash in an easy-access, readily available deposit account to make sure you can cover unforeseen emergencies and short-term needs. However, there is no reason to tie up all your cash holdings in this type of account as interest rates can be significantly higher for those willing to sacrifice some flexibility.
For example:
- How much money are your own cash deposits earning?
- Is there an opportunity to move them and earn more interest elsewhere?
- Can you tie up any of your money for a period to perhaps earn even a little bit more?
- Could you start to take some risks and move some of those savings to multi asset or even equity investment vehicles instead?
Act now
Whatever your needs and whatever your objectives, we can help you put together a tax-efficient savings and investment portfolio which will help you achieve them.
For more help and information please do not hesitate to contact Paul Hoskin at Hoskin Financial Planning or listen to Paul’s latest Hoskin Podcast on why you should have the value of your pension checked every year.