Consumers shifting their savings
Consumers are increasingly concerned about the value of their savings and, as a result, shifting to short-term easy access accounts, according to new research produced by research house Datamonitor.
The Datamonitor survey found there was an emerging trend of consumers relying more on instant savers and current accounts to save.
The survey showed that 62 per cent of consumers are concerned about the value of their savings.
“Today’s average saver can neither afford nor risk to lock away large quantities of their funds, for should the worst happen, those savings could quickly need to become a lifeline,” Datamonitor analyst Will Mayne said.
However, lower rates fail to punish consumers for keeping their funds in cash at a time when retail banks are desperate for reserves, Mayne said.
The research also shows a lack of financial knowledge among consumers in the UK, whose average interest rate estimates are way off the mark at 2 per cent, despite Bank of England rates being 0.5 per cent for the last six months.
Mayne warned that if the majority of consumers are unaware of the level of central bank rates, they would struggle to recognise whether a savings product is a good deal or not.
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