Not impressed with interest from savings account - 87% of Brits Want More
Following the Bank of England’s latest Inflation Report this February, the public look to banks to up their interest rates. New research from Learn to Trade calls for more awareness of investment strategies available to them.
New research from Learn to Trade has shown that almost nine-in-ten of Brits (87%) are unimpressed with the returns on their main savings accounts. While signals from the Bank of England this month hint at doubling interest rates, Brit’s are yet to see how these rates will be reflected by retail banks.
The research, conducted by YouGov, shines a depressing light on the UK’s attitude towards savings accounts, with 81% of the UK public not expecting savings to grow much from the outset. A general lack of understanding about savings accounts and investment options is clear, with the following key issues preventing Brits from significant returns on their money highlighted in the findings:
· Brits lack of knowledge around alternative investment methods: While over half of Brits (57%) would put money into other investments if they knew they would get better returns, a staggering half (48%) of the UK population simply lump money into savings accounts as they don’t know where else to invest their money. Positively, 38% of Brits with savings have already started looking into other investment options, such as foreign exchange (Forex), stocks and shares.
· Males more likely than women to explore different investment methods: 6 in 10 females surveyed do not have an understanding of alternative investments available to them versus 40% of men.
· 18-24 year olds more open to investing differently: Two thirds of those aged 18-24 year olds are happier to put savings into these methods if they know they can get better returns on their money, versus just over half (54%) of those aged 25+.
· Three quarters of Brits unsure on what banks do with their money: The research questioned whether the public were aware of the “Fractional Reserve System”, a commonplace banking system that permits banks to keep only a fraction of total deposits on hand in actual cash and available for withdrawal. This frees up the capital to then be further invested – by the banks – into other parties and traded on the Forex market. 76% of Brits had never heard of this practice and 80% believe that banks should be more transparent about how they are trading their money.
“The research clearly shows the public don’t see savings accounts in the same light as other investment strategies, rather as a place to simply put their money,” said Greg Secker, CEO of Learn to Trade.
“For banks, savings are deposited assets to be traded between one another. In return they give Brits back absolutely miniscule interest – per year – for the capital we’ve unknowingly invested into them. It’s clear that the UK public is fed up with these small returns. The banks face the same risks as you and I in trading – they are just armed with effective risk mitigation plans and proven, tried-and-tested trading and investment strategies. The Forex market in particular sees trillions exchanged on a daily basis, and the interbank market is by far the greatest contributor to this. They make the public’s money work for them, it’s time the public did too.”