You are here: Home - Investing -

Savers face diminished returns by ignoring inflation

0
Written by:
30/11/2012
Savers are ignoring the risks of inflation as they continue to put their money into banks and shunning investment opportunities.
Savers face diminished returns by ignoring inflation

According to the final Institute of Financial Planning (IFP) poll, despite returns from deposit accounts at near record lows when tax and inflation are taken into account, savers are still choosing to sit on their cash rather than take investment risks.

Women are the least confident when it comes to investing their money, with just 7% saying they are likely or very likely to do so compared to 14% of men.

Overall only 10% are likely to consider the stockmarket next year hoping to get better returns than bank or building society deposit accounts.

Nick Cann, CEO of IFP said: “Just leaving money in a bank account is going to see it erode over time with the effects of inflation and that is very dangerous.

“A plan of action is required to determine what short, medium and long term goals exist so that effective savings and investment strategies can be used which will be mindful of the individual’s attitude to risk and loss, and give the chance of them maintaining the value of their capital over the longer term.

“Understanding the options at least has to be a positive step forward.”

Interestingly, 71% of people aged 18-34 are unlikely to invest, which highlights that even among those who can afford to take risks in the long term are extremely risk-averse.

Two thirds of those aged 55 and over also say that they are very unlikely to consider investing, with only 8% being likely or very likely to do so.

John Ions, chief executive of Liontrust, said: “Equity investing and the income that can be generated can be a very powerful way of maintaining and improving income over the longer term.

“It only goes to highlight the need to seek proper advice and gain a better understanding and confidence of other options. Apathy could be the biggest destroyer of future financial goals.”

Tag Box

Debt

Pension

Spending

Financial fitness

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Are you a first-time buyer looking for a mortgage?

Look no further, get the help you need by searching for your perfect mortgage

Which ISA is right for you? A round up of the six products available in 2017

From cash to innovative finance to lifetime, here's our guide to the ISA products available to savers this yea...

Guide to buy-to-let tax changes

In late 2015, former Chancellor George Osborne announced a range of  tax measures aimed at landlords, which t...

A guide to switching energy provider

All you need to know about switching from one energy supplier to another.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Five fund tips for a 0.25% interest rate environment

With interest rates stuck at a record low 0.25% and expectations rates could fall to close to zero, here are ...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Investing your money

Alliance Trust Plc gives you smart insight into how to invest your money

Money Tips of the Week

Read previous post:
2228531-marriage-proposal
More than 2m couples hold-off awkward financial conversations

A fear of awkward financial conversations is driving British couples to put off talking about the state of their personal...

Close