Savers Seek Alternative Options as Interest Rates Hit Unacceptable Lows

Savers Seek Alternative Options as Interest Rates Hit Unacceptable Lows

Everyday savers in the UK find themselves staring down the barrel of increasingly low interest rates, all of which has come to a head as typical savings account interest rates now hover around the 0.1% mark.

Consequently, savers are understandably questioning the alternative options available; one of which according to a stock market expert could be a foray into investments.

alternative investment options for savers

Speaking on behalf of InvestEngine, Managing Director and Co-Founder Andrey Dobrynin believes that the stock market could be a viable option for anyone looking to make the most of their money.

“The benefit of stock market investing over keeping cash on deposit can be stark – especially given the pitiful bank rates available today,” he said.

“For example, if you put £100 every month into an account paying 0.1 percent for the next 25 years, you’d end up with £30,390,

“Contrast that with investing the same amount in the stock market where potential returns might average five percent a year and you’d end up with £58, 811,”

“Potentially near-double what you’d have from cash!”

No Safe Haven for Savers

The primary appeal of a savings account is the near-certain guarantee of interest growth and irrespective of what happens, you are all but guaranteed to get your initial capital back.

But when it comes to making money with your savings, it is becoming practically impossible to generate a meaningful amount of interest with a conventional savings account. This may therefore make it impossible for those with specific financial goals to achieve them without considering the alternative options available.

“Looking back over the last 10 years, leaving £10,000 in your bank account would have returned you just £10,442,” Dobrynin commented, highlighting just how slow interest gross can be on the average savings account.

“Whereas the same amount invested in a globally diversified portfolio would have seen your money grow to £29,173,” he continued.

“That is nearly three times your return from cash, clearly demonstrating how unhelpful leaving your money in the bank can be when saving for later life.”

However, Mr Dobrynin also acknowledged the fact that the prospect of investing can be daunting and confusing for most everyday savers. There are no specific investment options available that can guarantee healthy returns.

All investments carry certain risks, which depending on the performance of the stocks in question could result in loss of capital.

Take Advantage of All Available Incentives

Mr Dobrynin went on to advise savers to ensure they “take advantage of tax breaks like ISAs,”

“Using lower-cost investment providers can help boost longer-term returns on the money that you are able to invest.”

Anyone looking to invest in the stock market for the first time should consider the input of an experienced broker mandatory; an independent broker can provide the objective and impartial advice needed to make sensible and informed decisions, in accordance with available capital and long-term financial goals.