With the credit crunch continuimng to bite, it is vital for consumers to avoid placing unnecessary pressure on the money in their pockets. This is the claim of the Post Office which recently released a survey showing that Britons are missing out on billions of pounds by placing cash into savings schemes that fail to perform. And during a period of high food costs and inflation, on top of reduced access to credit, it was claimed that it is more vital than ever to choose attractive deals. Findings from the company identified that by placing money into accounts which offer lower interest rates than the Bank of England's base rate, savers may well be losing out on about 8 billion pounds each year.
Overall, thirty per cent of people appear to be unaware as to the interest rate their savings account attracts, with a further 39 per cent reporting to be unaware if their supplier has changed interest rates on such financial products over recent months. However, people living in the north-east were shown as having the least comprehension about the rate of interest they receive on their account. Here, some 37 per cent claimed were clueless as to what the amount of interest gained on their saving schemes was. On the other hand, just over a fifth (22 per cent) of people from the East Midlands were indicated as being unaware of the interest provided on their savings account.
On top of saving money inefficiently, it is quite plausible that consumers discover that their financial situation in later life is not as strong as was once thought. This may mean they struggle to meet financial demands such as loan repayments, the cost of property repairs or bills more expensive than previously thought they would be when they are older.
Richard Norman, director of savings at the Post Office, said: "It's time savers started to take care of their savings by choosing a home for them wisely - especially in the current economic downturn. There are hundreds of poor-paying accounts, so people need to avoid them. If you don't know what interest you are currently earning, contact your provider. If it is paying a low rate and you want it to earn more then move it. Although it might be tough to put money away at the moment, it is more important than ever to make sure your existing savings work as hard as they can for you."
He added that those people who are looking to open up a new account spend a little time checking how much interest they will generate on their savings and if they will be able to access their cash with ease.
For those people who appear to be concerned about their capacity to put money away for the future, making use of a debt consolidation loan may be recommended. By selecting this kind of loan it is possible that borrowers will be able to merge numerous constraints on their spending into one low cost monthly repayment. In turn this could leave them with an increase in disposable income, cash which could then be invested into a savings scheme.
In May, research by Birmingham Midshires showed that 77 per cent of People saved some money over the preceding three months. The typical amount invested was shown to stand at 938 pounds, a rise from the 910 pounds noted it was in may 2007.
