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Savers urged to look long term

Savers urged to look long term

Category: Savings

Updated: 26/05/2011
First Published: 18/04/2011

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Savers have been urged to drop their 'live for the moment' attitude and plan for the long term.

With short term savings accounts and cash ISAs proving so popular in the UK, it is little surprise that almost half of us (45%) plan our finances just one year ahead.

More alarmingly, one in six (17%) do no financial planning whatsoever, research from Standard Life has found.

Despite uncertain economic times – or perhaps, because of them – just over a fifth (22%) of people in the UK plan up to five years in the future, with just one in six (16%) planning their money matters more than six years ahead.

Of the UK regions, it was found that those from London were the top financial planners, with one in six (17%) planning six years or more ahead.

By contrast, those from Scotland came out as the least likely to make long term financial plans, with only one in ten (11%) planning more than six years ahead.

While short term fixed rate bonds and cash ISAs provide a short term home for funds, the benefits of a long term savings account should not be overlooked.

A long term account allows us to lock in money over a longer period of time, which in turn is rewarded with a higher rate of interest.

If you would like to get your long term finances in some order, then a five year account could be the place to start.

The best rate currently available in the market is 5.05% from Birmingham Midshires. The rate is paid on a minimum investment of only £1 and the account is operated online.

If five years seems slightly too long then a four year account could be more suitable.

The 4 Year Internet Fixed from Birmingham Midshires pays a rate of 4.20%, also on a minimum investment of only £1.

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Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.