Who’d be an economist in today’s financial climate? It’s almost impossible to tell which way the economic dial is pointing.
One thing’s for sure, it’s a great time to take out a mortgage or loan. That’s good news for many of us, but bad news for savers.
Why are times so tough for savers?
Savers today need to work harder than ever to find a great deal. A combination of uninspired global financial performance and Brexit led to the Bank of England lowering interest rates to a new record low of just 0.25% in early August 2016.
Interest rates influence how much banks will pay out for investing your cash, and as expected, UK banks have started to follow the newly slashed rate with their own interest rate reductions.
How does this affect me?
Perhaps the biggest headline grabber was Santander. Ten days after the rate cut the bank announced it was to halve the interest rate of its popular 123 current account from 3% to 1.5%.
The state of the current savings accounts market means the best returns are only found with products that do one of two things: lock your money away for long periods of time, or introduce an element of potential risk in the pursuit of higher rewards.
How can I maximise my savings?
Despite the options, getting a good return from your savings is tougher than it’s ever been. The UK interest base rate cut means savers need to find even more sophisticated ways to get the very best gains, and that means professional financial advice can be the way to go.
Any tips to get me on the path to savings success?
To give you a taster of how independent financial advice can help you save money, here’s Flying Colours’ five steps to lifetime wealth planning:
- Start early: as we’ve seen in the pensions example above, it’s better to begin saving as soon as possible. Start saving, but make sure you do so intelligently…
- …by setting goals: where do you want to be in 10 or 20 years from now? Are you setting your sights on a specific purchase – a car or loft conversion? Or do you simply need maximum returns over a shorter period.
- Think retirement: whatever your savings goals, always consider your needs during retirement. What will your outgoings be during retirement? How many holidays will you take? Are you intending to leave an inheritance for family members? Some morbid, but very real, questions to ask yourself.
- Work out how much you’re worth: yes, seriously, work out the balance of your assets and debts and calculate your net worth, Sunday Times Rich List-style. This will put everything in perspective, helping you set realistic goals.
- Speak to a financial adviser: Take the time to find a financial adviser that has a good reputation, with years of investment expertise and solid results.
To get detailed, independent financial advice, it helps to get an outside opinion. Flying Colours offers results-based plans that can help you prepare for the future and help make your money work harder than ever.