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Extra Cash used for Saving not Spending
17 December 2008
A recent poll conducted by moneysupermarket.com has shown that nearly a third of people in Britain are planning on saving the extra cash they have as a result of falling mortgage costs.*
With the Bank of England expected to cut interest rates further, those yet to invest up to £3,600 in a cash ISA this year would be best advised to look at a fixed-rate ISA.
Kevin Mountford, head of banking at moneysupermarket.com, said: "Despite the Government's attempts to get people spending big on the high street again, thankfully, people are seeing saving as very important now.
"If the credit crunch has taught everyone and every bank one important lesson, it is that savings are important.
"Regular saver accounts are useful if you suddenly find yourself with some spare cash – you can be penalised for any early withdrawals meaning they encourage a little bit of discipline. But in this environment of falling rates, the argument to open a fixed savings product is a strong one. Back in October, I urged anyone who had spare cash that they were sure they wouldn’t need for a while to open any of the six or so fixed-rate bonds offering seven per cent or more.
"As long as you can afford to lock your spare cash away for the next 12 months, fixing is the best option – particularly tax-free."
*The online survey was of 1,600 moneysupermarket.com visitors between Saturday 10th May and Friday 16th May.
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