Consumers Missing Out On Savings Accounts

In the current economic climate, it is necessary for consumers to avoid placing unnecessary pressure finances.

This is the claim of the Post Office which recently released a report showing that consumers appear to be missing out on billions of pounds by placing money into savings schemes that under perform. And during this period of high food costs and inflation, in addition to reduced access to credit, it was claimed that it is more important than ever to choose attractive deals. Findings from the firm showed that by placing money into accounts that offer lower interest rates than the Bank of England's base rate, savers may well be missing out on about 8 billion pounds each year.

Overall, 30 per cent of consumers seem to be completely unaware as to the rate of interest their savings account attracts, with a further 39 per cent reporting to have no idea if their supplier has changed interest rates on such financial products over recent months. Meanwhile, consumers who live in the north-east were shown as having the least understanding about the rate of interest they receive on their account. Here, some 37 per cent claimed to not know what the amount of interest gained on their saving schemes was. On the other hand, a little more than a fifth (22 per cent) of people from the east Midlands were shown as being unaware of the interest provided on their savings account.

On top of saving money inefficiently, it is quite plausible that people discover that their financial situation in later life is not as strong as they once believed. This could well mean they struggle to meet spending demands such as loan repayments, the cost of house 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 also said that those consumers looking to open up a new account should take the time to check the amount of interest they will generate on their savings and if they will be able to access their cash without penalty.

For those consumers who appear to be bothered about their capacity to put money away for the future, taking out a debt consolidation loan may be recommended. By choosing this kind of loan it is possible that borrowers will be able to merge numerous constraints on their spending into a single low cost monthly repayment. In turn this could leave them with more disposable income, money which could then be invested into a savings scheme.

In May research by Birmingham Midshires shown that 77 per cent of Britons 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.

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