The pitiful state of savings has been voted the biggest financial worry – ahead even of falling house prices and soaring unemployment.
Repeated cuts to the base rate have decimated returns on
savings, while carnage on the stock market has left many Brits desperately searching short of options for their cash.
This is reflected in a recent survey, which found that almost one in four (24%) people rank the low interest rate environment and a lack of savings and investment opportunities as their biggest concern.
Unfortunately for savers, there's unlikely to be any assistance for them in today's Budget speech. With the government desperately to increase revenues, there's little chance it will remove tax on savings interest.
Savers feel left down
According to the moneysupermarket survey, Job security (23.3%) and falling house prices (19.4%) are the next biggest fears.
One in nine (11%) say the government's rampant spending concerns them most, while the prospects of inflation (3.9%) or deflation (3.8%) came out as the least worrying for respondents.
“
Savers feel let down by the Government and Bank of England,” says Clare Francis at moneysupermarket.
“The recent strategy of slashing interest rates in a bid to stimulate lending has been great news for many borrowers who have seen their mortgage payments fall, but it's hammered savers.”
So where should you put your savings?
For those who need access to their money, you need to be prepared to earn a far lower rate of interest.
Research shows the average access account pays a rate of just 0.65%, although you can earn up to 2.5% with the best accounts (see our
best buy tables).
The news is certainly a lot better for those able to lock their money away for a year or two. The average return on
fixed rate bonds is around 2.9%, but there are a number of
accounts paying over 4%.
As always, make sure you keep your savings below the £50,000 threshold with each banking group to ensure your money is covered by the government's savings guarantee.
