The British public are stuck in a savings trap, according to the friendly society Royal Liver Assurance. After questioning a 2,000-strong sample, the society found that nearly half think they receive poor interest, but are too worried to risk investing in shares
The findings suggest that, despite the stock market rally over the past 12 months, savers are still cautious about investing in shares. Nearly three-quarters (72 per cent) of savers said they would be worried about losing all or part of their investment if they put money into the stock market with the aim of achieving growth over the next five years. Just one in eight said they would be willing to take the risk and only one in 12 was confident their money would grow.
Andrew Wood, Royal Liver spokesman, said: "Low interest rates are good for borrowers but bad for savers. That's why so many people with money to invest have chosen to buy into property, because it has provided fantastic growth over the past five years or more. Others have continued to stretch their plastic and rack up debts on the basis that they'll buy now and pay later. But for the more cautious investor who wants a good rate of return with minimal risk, the options have been limited to traditional bank and building society deposit accounts."
Royal Liver's conclusions support this week's findings by the House of Commons Treasury Select Committee, that confidence in savings products such as with-profits endowment policies has plummeted in recent years. The committee calculates that holders of the 8.5 million extant endowment policies face a shortfall of nearly £40bn on their mortgages, despite being told by sellers that the policies would cover the debt.
John McFall, the committee's chairman, said the financial services industry had "insufficient appreciation of its long-term duty of care to its customers".Reuse content