It was announced yesterday (5/2/15) that the Bank of England interest rate is to remain at 0.5%. Good news for mortgages but this represents a six year low for those with money in savings accounts.
As specialist financial advisors for the dental and medical professions, we are urging you to act now to avoid losing further interest income.
Failing to shop around will cost you
It is estimated that a savings account of £10,000 could have lost almost £1,300 in gross interest over a six year period and an account with £25,000 as much as £3,250. This is based on interest calculated at the base rate of 0.5% compared to a savings vehicle paying a better rate, say 2.5%.
Hundreds and thousands of pounds lost
Savers have been losing hundreds and often thousands of pounds in interest by keeping their savings in the same account rather than looking for a better deal. Does this ring true for you?
With a six year low and no immediate sign of interest rates rising, it is time to take action and secure a better option. This could include:
- Investing the money in a different savings account with higher interest rate
- Investing the money into an ISA, which is at least tax free
- Considering a buy-to-let property for a better return
- Considering investing in Stocks and Shares
ISA’s are tax free
ISA’s are a simple way, similar to a savings account, which offer tax free interest income. The allowances are generous at present (15/16: £15,240) too and are ideal for low risk investors where your money can be invested in cash if preferred.
Typically even a cash ISA gets a better return than a regular savings account at present.