Friday, 1 October 2010

Savings

Where are your savings? I have been surprised to learn just how many British and Irish citizens, living in Spain continue to keep their savings in the UK in sterling. Apart from interest rates lower than inflation, there is always an exchange rate risk.

·        Inflation back on the agenda

·        What interest rate are you getting?

·        Do you have a financial plan?


I make no apology for being controversial. Part of my make-up is to ‘tell it as I see it’. Something that is happening concerns me, whether you are in Britain, Ireland or Spain. However, I think a good financial plan can sort it out.

Many UK and Irish residents in Spain still have significant Savings in UK Banks and Building Societies. There are a variety of reasons for this but the one which concerns me most can be called ‘inertia’.

 “I should do something about it but I never seem to get round to it!”

Maybe you should ‘do something’ and email to be introduced to a qualified regulated and authorised adviser.

Tuesday 14th September 2010 was the day that the latest set of inflation figures were announced in the UK. The Retail Prices Index (RPI) was the long standing measure of inflation and currently stands at 4.7%. Governments have tweaked the indices and more recently the Consumer Prices Index (CPI) has become more widely used. The CPI now stands at 3.1%, unchanged from the previous month.

CPI in future will be used to up-rate pensions. It must be a co-incidence that it’s lower than RPI.

I looked at the best savings rates. Easy access, no notice, Nat West at 2.89% was the best I could find, but even that includes a ‘bonus’ which lasts for 12 months. You can lock yourself in for longer but then you pay a penalty for withdrawing your own money!

So you get the best savings rates at lower than the rate of inflation and your cash is reducing in value as time goes by. That in summary is why you need a financial plan! To be introduced to an authorised adviser with knowledge of the UK and Spain, please contact me.

I will never introducer you to an adviser that charges an up front fee. Is it
time to stop the inertia and avoid your ‘Savings’ becoming ‘Losings’?


PS  I was nearly ready to publish when I received an email from a famous Supermarket advertising its Easy Saver Account 'Enjoy 2.6% AER Variable on your savings' Enjoy Savings at a lower rate than inflation? No thank you Mr.Sainsbury!