New research reveals that income from bank accounts of savers in the United Kingdom dropped by 16 percent in a year because of low interest rates from the banks and building societies.
According to an investment platform that was launched by Stelios Haji-Ioannou, the easyJet founder, called easyMoney, the decline in savings income is worse in real terms because of the rising inflation.
The drop in income is based on the numbers from the 2015/2016 financial year (the most recent available data from the HMRC) when savers made approximately £5.7bn as compared to the £6.8bn in 2014/2015.
During the end of the 2014/2015 fiscal year, inflation was at -0.1 percent; by January of 2018, it had increased to 3 percent.
With savers experiencing less benefit from keeping their money in their bank accounts and cash ISAs, easyMoney stated that people are increasingly opting for alternatives, with many tending to “take on a sensible increase in risk.”
The CEO of easyMoney, Andrew de Candole, stated: “Savers are increasingly fed up with seeing their money just sitting doing nothing in bank accounts.
“It’s easy to see why: these figures show that savings accounts’ and cash ISAs’ performance has been getting worse. With inflation eating away at values, the reality is there’s very little incentive to save through these traditional routes.
“For many people, the time has come to take action. Investors need products that offer real returns, and many are prepared to accept a sensible, calculated increase in risk in order to achieve this.”