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Retirement not a priority for savers

Published on 24 September 2013 03:00 PM

A survey by lending service Zopa shows that 36% of workers are budgeting for a trip away, compared with just 26% making provisions for their later years.

 

A rainy day emergency fund is even placed ahead of retirement when it comes to the nation's saving goals.

Children, buying a property, new car, future repairs, grandchildren, down payment for a house and starting a family also feature in the top 10 things to save for.

While two-thirds of the population consider themselves to be good with money, the poll reveals that most people are not making any long-term financial plans.

As many as one in five individuals have no savings whatsoever. And of those who do, 59% keep them in accounts where the interest rate is below inflation - some as low as 0.66%.

With the rate of inflation currently at 2.8%, these savings are effectively losing value instead of growing into a nice nest egg.

'One in five individuals have no savings whatsoever'

Many people are also losing out when banks' introductory bonus rates expire and leave them on worse rates, although the Financial Conduct Authority has pledged to investigate this practice in the near future.

The research also found that eight in 10 people have little or no trust in their savings provider, while just 43% review their savings once a year.

Some 51%, meanwhile, don't even know the current rate of interest on their savings accounts.

As many as 81% of 18 to 54-year-olds admit they need to save in order to have a comfortable retirement and avoid a crisis in their old age, yet just 21% of this group are actively putting money aside for their later years.

In light of the findings, independent financial analyst Louise Cooper claims Britons need to bulk up their savings in order to get a good return.

'To ensure your savings are fighting fit, it's important to know where to cut the fat when looking at savings options,' she said.

'Peer-to-peer lending offers a real alternative to banks with higher rates for savers to help your money grow. If you don't like bankers, why give them your savings?'

 

Although, whilst you can get a higher rate of return with peer-to-peer lending, your money is not covered by the Financial Services Compensation Scheme.

 

You should always seek advice if you are unsure about what a particular product or service involves, and whether it is right for your particular circumstances.

Copyright Press Association 2013


 

Last updated: Oct 06 2017

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