Umbrella company contractors need to move quickly if they want to get the best savings deals, according to moneysupermarket.com.
In the last two months, one-year fixed rate bonds have seen their average return increase from 2.92% to 3.03%. However, some products offering generous returns have seen their rates reduced soon after introduction as savers rush to snap them up. One such product, a one-year fixed bond, was launched at 3.30% and then had its rate cut twice within a fortnight, leaving the rate at 3.05%.
Kevin Mountford, head of banking at moneysupermarket.com, says this is “silly season” for the banks as they try and entice new customers with a rush of new products. He advises consumers to keep an eye on the savings market to make sure they are getting the best deal for their money.
Andrew Hagger from moneynet.co.uk recently said that savers should be prepared to change accounts as frequently as once a year to get the best available returns.
Hagger also claims the future is not looking very rosy for savers. The CPI has risen to 3.25% meaning that savers need to secure a 4% annual growth in order to keep the value of their deposits. But getting a return like this would probably mean locking money away in fixed-rate bonds for at least three years. In the current economic climate, tying money up for this long is beyond the means of many savers.
Another problem savers are encountering is they simply don’t understand the financial jargon attached to many products. A YouGov poll found that 87% of British adults think they would be more likely to save if investments were more flexible and easier to understand.
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