You are here: Home - Saving & Banking - News -

Cash is still king for the over 50s

0
Written by: Paloma Kubiak
23/01/2017
Despite the ultra-low interest rates on offer, the over 50s continue to believe that cash is king when it comes to using up their ISA allowance.

Five million over 50s are expected to open a new ISA in 2017 but more people plan to deposit their money in a cash ISA than take on the risks associated with investing.

A poll of 9,000 over 50s revealed that more than half will opt for a cash ISA, while just a third plan to open a stocks and shares ISA. One in five will look to open both a cash and a stocks and shares ISA, the research from Saga Investment Services found.

Women are more likely to opt for cash rather than stocks and shares (58% vs 27%) than men (41% vs 38%) and regionally, twice as many Londoners are willing to take out a stocks and shares ISA (39%) than those in the North East (24%).

Just 2% of the over 50s polled said they will look to open a stocks and shares ISA for the first time and for more than three quarters of these people, low interest rates are the reason behind their decision.

Sally Merritt, head of product for Saga Investment Services, said: “Savers have had it extremely tough over many years now and yet many still feel uncertain about making the switch to investing.  This is largely because people don’t know quite where to start and they are wary of the risk.

“However, people need to make their money work harder for them  – not just to give them a higher level of income, but also simply to stop their money losing value in real terms.  Ultimately, holding cash which earns less interest than the rate of inflation means that people are losing spending power. And the compounded effect of this over a number of months or years could be much bigger than they realise.”

Merritt said that if people have a good cushion of cash savings, enough to cover 6-12 months’ worth of living expenses, then it may make sense to try investing with some of their additional cash savings.

“Investing should be a long-term plan, we suggest 3-5 years as a minimum to help even out the rises and falls in the market,” she said.

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.

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

How your monthly bills could rise as the base rate reaches 1.25%

The Bank of England has raised the base rate to 1.25% as predicted – the fifth consecutive rise in just six ...

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.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week