Consumers Missing Out On Savings Accounts

By: Mark Dawson..

With the credit crunch continuing to bite, it is vital for consumers to avoid placing unnecessary pressure on the money in their pockets.

Such is the claim of the Post Office when they recently released a survey showing that Britons seem to be missing out on billions of pounds by placing cash into savings schemes that under perform. And during this period of high food prices and inflation, in addition to reduced access to credit, it was claimed that it is more vital than ever to select attractive deals. Findings from the firm showed that by placing money into accounts which offer interest rates lower than the Bank of England's base rate, savers are missing out on about 8 billion pounds every year.

Overall, 30 per cent of people are shown to be oblivious as to the rate of interest their savings account attracts, with another 39 per cent reporting to have no idea if their provider has changed interest rates on such financial products over the last few months. Meantime, people who live in the north-east were indicated as having the least idea about the rate of interest they receive on their account. Here, some 37 per cent claimed they had no idea what the amount of interest gained on their saving schemes was. On the other hand, a little more than a fifth (22 per cent) of consumers from the east Midlands were shown as being unaware of the interest provided on their savings account.

On top of saving money inefficiently, it is quite plausible that consumers discover that their financial circumstances in later life is not as strong as they once thought it would be. This may mean they struggle to meet financial demands such as loan repayments, the cost of property repairs or bills more expensive than previously thought they would be when they are older.

Richard Norman, director of savings at the Post Office, commented: "It's time savers started to take care of their savings by choosing a home for them wisely - especially in the current economic downturn. There are hundreds of poor-paying accounts, so people need to avoid them. If you don't know what interest you are currently earning, contact your provider. If it is paying a low rate and you want it to earn more then move it. Although it might be tough to put money away at the moment, it is more important than ever to make sure your existing savings work as hard as they can for you."

He added that those people who are looking to open up a new account spend a little time checking how much interest they will generate on their savings and if they will be able to access their cash with ease.

For those people who may be worried about their capacity to put money away for the future, making use of debt consolidation loan may be useful. By selecting this kind of loan it is possible that borrowers will be able to merge numerous constraints on their spending into one low cost monthly repayment. In turn this could leave them with an increase in disposable income, money which could then be invested into a savings scheme.

In May research by Birmingham Midshires revealed that 77 per cent of People saved some money over the last three months. The amount invested on average was shown to stand at 938 pounds, an increase from the 910 pounds recorded for the same period last year.

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Mark Dawson writes for Loan-Arrangers where visitors can compare loans online. Then apply for one of our consolidation loans or loans with bad credit.

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