Advisers call for more saving incentives in 2015

Advisers call for more saving incentives in 2015

Providers must help people understand even basic savings products if the investment habit is to be encouraged, adviser Anna Bowes has warned.

The co-founder of advisory website SavingsChampion, said: “Some people might not feel excited because of low interest rates, but even putting £50 extra away a month into a regular high interest accounts can help build up a pot and get people into the savings habit.

“Yet these savings accounts do come with many terms and conditions, such as no access during the term or that the rate will drop if you miss a payment, and people do not always understand the conditions.”

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Ms Bowes said Marks & Spencer and First Direct are offering a 6 per cent premium on the first 12 months, although both require people to hold accounts with the providers.

However, Chris Williams, chief executive of Bristol-based Wealth Horizon, said that people remaining in cash in 2015 will go through a “difficult time, as they now face the prospect of earning virtually nothing on their savings for even longer.”

Their comments followed research from the Tisa’s Savings and Investment Policy project group, which found that almost one-fifth (19 per cent) of Britons do not save.

The research also found that 11 per cent simply hide money under the mattress or in a money box.

Key points

TISP asked what people would do with an additional £50 a month to invest:

24 per cent would invest in a Isa

21 per cent would put it in a bank account

16 per cent would pay down their mortgage or other debts

15 per cent would save towards a holiday.

Source: TISP