18th September 2018
Jonathan Watts-Lay, Director, WEALTH at work – a specialist provider of financial education and guidance in the workplace supported by regulated advice for individuals comments;
“In this current low interest rate environment it’s important to shop around for a saving account as the rates can vary. Before doing this it’s important to think about what you are actually saving for, as there are a variety of saving vehicles available to meet different objectives.
It’s useful to think about this in terms of short, medium and long-term savings goals. In the short term, someone might be interested in saving for a car or a wedding, for example. In the medium term, their focus might be on a home deposit. Longer term savings are typically about retirement savings. Matching those goals up to what’s on offer is the next step. For example, putting money into an ISA means savings are tax free even if interest rates are low. Alternatively, joining a Save As You Earn scheme through an employer can offer the opportunity of more upside through staff share ownership – these can help fulfil short-term goals. The Lifetime ISA can help with saving for a first house and provides a guaranteed 25% uplift as part of the government bonus, so whilst the interest rate may be low the bonus is very attractive. And then the pension offers the most tax advantageous way of saving for retirement.
In summary it’s all about making your money work harder against the saving objectives you have!
Individuals should speak to their employer as they may be able to negotiate better rates on their behalf, or they may offer financial education to help them understand what’s available.”